Truist Financial Corporation (TFC) Earnings Call Transcript & Summary

Okay. Good morning, everyone. Next up, we have Truist Financial Corporation. As most know, Truist was formed in December of 2019 as a result of the merger between SunTrust and BB&T. Company headquartered in Charlotte, North Carolina. Assets today, $520 billion, deposits $385 billion. And I should mention Truist has a top 5 market share in 23 out of its 25 largest MSAs. From a starting point of 12% to 13%, the company now has a mid-teens, medium-term ROTCE target. Representing the company today, to my left, is Donta Wilson, Head of Consumer and Small Business Banking. He leads 20,000 teammates who serve retail, premier and small business clients through digital banking, virtual service centers and more than 1,900 community banking branches. Additionally, he oversees core deposit and loan products, including mortgage, auto and Truist national consumer lending businesses. He's also a member of the operating council and was named to the executive leadership team in 2016. Donta will start with the presentation, and then we'll move on to Q&A.

Good morning, and thank you, Terry, for that wonderful introduction. Thank you, Gerard and BAAB for hosting us this year at the conference. Before I get started, I'd like to note that our presentation today will include forward-looking statements and certain non-GAAP financial measures. Please review the disclosures on Slides 2 and 3 of the presentation regarding these statements and measures as well as the appendix for the appropriate reconciliations to GAAP. So let's start today by talking about our purpose. Our purpose is to inspire and build better lives and communities. Our purpose allows us to be able to successfully create opportunities for our clients, our teammates as well as our stakeholders. There's 2 values that I want to highlight today. The first value is caring. When we formed Truist, we did our research and in our research, we uncovered that there was white space in financial services industry, that clients and prospects wanted a financial institution that showed up with care. So when we developed our go-to-market strategy, we created a go-to-market strategy that was founded on delivering unwavering care and expertise. Another value I want to focus on is success. We define success by when our clients win, we win. But not only do our clients win and we win, but our shareholders win. So today is about sharing with you how we're caring for clients, but also how we're winning with our clients and also winning for our shareholders. Let's start by talking about why Truist. Truist is an attractive franchise. We're the seventh largest U.S. bank, we have $523 billion in assets. We have this wonderful granular core asset -- I mean, deposit base that is stable. We have 1,900 branches that we deliver caring solutions through as well as our digital solution set. We have a comprehensive set of solutions in which we deliver to our clients. You recall last year, we simplified our organization. We realigned our organization to have a wholesale business as well as a consumer and small business, business, that allows us to drive revenue more effectively and more efficiently. You see on the wholesale side, it delivers 46% of the revenue. In the consumer and small business banking side, we deliver 54% of the revenue. I'm going to double click on how we're driving that revenue in a few minutes. We're in attractive markets. We're in 17 of the fastest-growing markets in the country. And over the last several years, we've had this great migration as clients and prospects continue to move to our marketplaces. And we also are forecasting these markets to continue to have great population growth. So in really, really good marketplaces. But in addition to being in a great marketplaces, we have sound scale. I know this conference is about the scale matters, scale and density both matters. So we have this wonderful scale. We're in -- we're top 5 in the 23 of our largest 25 MSAs. That matters. When you aggregate the weighted average deposits, we have 20% of the weighted average deposit share in the markets that we operate in. So we're dominant in those marketplaces. So clients are already focused, already voting on us, continuing to focus on voting on us and continue to give us their business. These assets and these wonderful strengths is what positions us to really accelerate growth, improve profitability and also activate capital. So let's talk about consumer small business, $211 billion in deposits, so again, rich deposit base. We have a leading efficiency ratio of 51%. We're delivering care to 14 million clients, and those clients have a great tenure with us, over 18 years or an average of 10 years. So we have a great tenure with our clients. Why do our clients choose us? Because they're empowered, they're supported and they're rewarded. So we empower our clients to be able to activate the solutions and services that we have through a personalized experience through our connected channel experience. It's digital first, but not digital only. We also leverage our care centers in our branches to deliver those services. They're supported by our teammates. We have talented teammates that deliver care and expertise on a daily basis, and then we will award our clients. So we award our clients, for example, like our Truist One account. So it's a leading deposit account in the marketplace that rewards our clients for doing more business with us. The more deposits they do with us, they don't have to change their checking account. That account unlocks additional perks and benefits to include up to 50% of additional bonuses on their card spend when they have a card, use their card with us and create more deposit activity with us. So they're empowered, supported and rewarded. We deliver these services and these advantages through our core franchise. So you see our core franchise, we are segment-based and not product-based, that allows us to be really efficient in driving the overall business versus being product-based and trying to maximize for products. That consolidation I talked about earlier, enhanced that opportunity. Then we also have these national consumer lending businesses. And these businesses give us a strategic advantage, especially in this time where we have the opportunity to activate capital. I'm going to talk a little bit more about those in just a few minutes. How are we doing? We're delivering great results. If you look at the post conversion opportunity, we started driving performance and focusing on growing revenue. So we're growing revenue at a CAGR of 6%. We're also managing down expenses at a decreasing CAGR of 6%. That's created a strong PPNR growth over that same period of time of 12%. So really focused on performance. We're focused on growing the franchise in profitable ways. We're delivering a diversified portfolio. You see we have a robust deposit portfolio. 46% of our portfolio are in checking accounts, so giving us low cost of funds. We also have a really robust and dynamic loan portfolio. Our loan portfolio has 8% business and the rest is between mortgage and consumer. 40% of that consumer business are in these very tailored, unique, again, competitive advantage portfolios. I'd love to talk about that at this time. So let's talk about this portfolio. So we have this wonderful model here, the scale national business, this platform to diversify our portfolio with high returns. On the far left, you see 2 point-of-sale leading platform providers. The first is Sheffield. So when you think about Sheffield, Sheffield is a provider of lending products that we provide services fast, simple and easy to consumers that are buying powersports, to businesses that are buying outdoor power equipment. So think mowers, think tractors, and then we also finance trailers. So we have the leading share in that business. How we make money off that business? We get paid by the end client, so the borrower that ultimately has a loan. We also make money from subsidies from the original equipment manufacturer. That's how we make money in that particular business. Another great business we have is Service Finance. Service Finance is #2 in home improvement. We do a wonderful job of enabling contractors, think about contractors at the kitchen table when they have clients that are expanding something within their home, they're either getting a new HVAC, they're getting new doors, they're getting new windows, maybe a new pool. We enable that contractor to be able to provide a lending solution for those clients. We bought that business in 2021. Over that time, we've doubled the assets. We've done that profitably. We also have done that without reducing our risk appetite and making sure we keep our risk disciplined. So good risk discipline, also great pricing discipline. We look at LightStream. LightStream as a digital end-to-end 100% focused on great client experience, delivering that to our super prime client base. We bought that company in 2012. That company provides purpose-driven products. When we say purpose-driven products, these are products that are tailored and priced based on the clients' use for the service. So if they're doing debt consolidation, they may do an auto, they may be doing some type of home improvement. We have this unsecured leading product, and we can price that based on our sophisticated pricing models and based on their high FICOs to give them a great yield but also give us a great yield. That business has done so well. And what's really good about finding these companies and acquiring these companies that when you end up making them successful, you're able to bring them to the core franchise. So in 2025, we're going to offer these core solutions directly into our Truist experience and through our branches. We have a full spectrum of auto solutions. So we have our dealer financial services organization that serves over 6,000 dealers. We've been in that market a long time. We have great increase in origination. We're top 10 in that particular business, #7. And we also are serving our subprime client in which we're #7 in that particular market share as well. That subprime client is our regional business. We call it RAC. In that business, we've been successful over many years. Yes, we have a lower FICO acceptance in our underwriting, but we do a wonderful job with our credit discipline, making sure we appropriately price to return and we take the appropriate risk. And so we've won in that business for several years. We have never taken a loss in that business, not even through the Great Recession. We've been able to return great profit in that business over that short period of time. You see these platforms offer really, really good FICOs. So over 700 FICO scores and all those platforms except RAC. And these platforms give us, again, the ability to really focus on activating capital. So we have lots of levers, lots of options. In times when the market is slow and we don't feel as good about the macro economy, we're able to pull it back a little bit. You saw us do that in the auto space and coming out of '21, '22 because where those vintages were and inflate of FICOs, you saw us derisk the portfolio over that period of time. And now we're in the mode of activating capital and now we're able to lever up these portfolios to get higher yields. You see we have some rich yields, yields here from a risk-adjusted perspective as high as 8%. So that really enhances our portfolio. And what's really good about putting on the capital today and are activating this capital today is that now when we're putting on higher quality loan product because we derisk the portfolio, but the yields that we're putting on today are higher than the portfolio yields. Because these are short-term fixed assets over a 3-year, call it, weighted average life. And so the runoff that you're having with the lower yields were replaced with the higher yield. So we're enhancing the overall return on our profile there. Let's talk about how we're driving performance and we're driving our priorities. Any time you're leading a large team at scale, it is super important to bring clarity to complexity. So what we try to do is provide a framework that is very simple for our teammates to understand how they fit into the priorities and what the priorities are and what success in delivering our priorities. So we came up with a framework within consumer and small business bank that's founded on the 3Ds. And it's basically how well we're doing in deposits, how well we're doing it deepening and how well we're driving our digital performance. So every day, our teammates walk in and they know they're successful. If they did all 3, they had an excellent day. They did 2 out of 3, they had a good day. If they only do one, do deposits. And so everybody appreciates that, understands that and drives to that on a daily basis. So let's talk about deposits. Deposits, again, we have this granular core stable deposit business in consumer and small business. It's the most valuable solution that we have, most profitable and most valuable solution that we have, and we continue to focus on growing it because it fuels the rest of our company. So as we grow in deposits, so grows the rest of the franchise and gives us that optionality to do that. The way we measure our success in deposits, we look at balances, of course, but we also look at how you're growing net news and how are you growing your primacy within that net new account that you may be bringing on to the company. So we've been in this very competitive environment. We've had QT over the last couple of years. Sometimes you look at balances, it could be misleading because people are renting balance sheets. And so you look at how you're doing there over the long term. And then in every day, you look at what are you doing from a net new perspective because over the mid and long term, that's ultimately going to help you understand the health of a consumer banking franchise. As rates start to settle a little bit, clients put their monies back into the banking system, and they're going to put it with their primary account. That's why we look at primacy. So our primacy ratio was 82%. So that's growing year-over-year. So we're really excited to see that we're growing our households but also growing in primacy. And what's great about primacy, when you have primacy, you generate 20% more revenue per household when you have a primary account. What's also good about primacy is that it gives you the opportunity to deepen. So when you have the primary account, you become the trusted banking partner that allows you to have the opportunity to deepen with them. As you heard Bill speak on many occasions, our most important opportunity that we have today is to improve profitability by deepening with our existing clients. That's our most important and our biggest opportunity. We already have the relationships. All we have to do is deepen those relationships. And that's what we're really focused on as it relates to consumer and small business banking. So our bankers, be it our small business bankers, our branch bankers, our premier bankers every day are coming in. We're having caring conversations. We're bringing in our experts, be it payment experts, be it investment experts or be it experts on strategic credit, and we're providing those solutions to our clients, and that's generating the success you see on the slide. So we're up 50% as compared to 2022 and client solutions delivered, and that's bringing in a very, very sound and solid CAGR of 14% over that period of time. So we know where to win, and we absolutely know how to win profitably. The last D is around digital. Digital migration is a big focus of ours. Our clients are preferring more and more digital interaction every single day. Today, we have 2.5 million clients that sign in digitally every day. It's our highest use channel, but it's also our lowest cost-to-serve channel, and that's why it's additionally important. So you want to deliver the best service you can in all your channels, which you want to make sure you're migrating to your lowest cost channel and delighting that channel, especially when clients prefer to use that channel. So our migration to digital transactions has been successful over time. We continue to progress. You see that 65% of our transactions are now digital. We want to continue to increase that number over time. And what's really great about that is that when you have that opportunity to put clients in their empowered position to use your digital solutions, that creates capacity for your teammates to do the first 2 Ds. That could be our prospecting for deposits or bringing more deposits in from clients, or they could be deepening, bringing in other solutions. So part of this is making sure we increase capacity. One of the capabilities that we introduced in 2022 is our Truist Assist. That is our virtual digital bot. And that virtual digital bot is where clients were able to go in, ask banking questions, and we solve those questions 86% of the time within that session when they're asking that question to the virtual bot. Again, this creates capacity because those 2.4 million interactions would have been done by a branch banker or a premier banker or a small business banker now is being done by our virtual bot. So we're focusing on these 3 Ds, again, to drive growth as well as drive profitability in addition to driving our efficiency. So what about our greatest opportunity going forward? So we have a wonderful opportunity for growth and profitability as it relates to segment growth, specifically our Premier segment. So we have this Premier segment. And in this Premier segment, we define Premier as having $100,000 or more in investable assets or deposits. We have what we call Premier potential, and we have premier clients that already bank with us from a relationship perspective with that $100,000 in the bank or more with us. The premium potential clients have the $100,000 and they have a deposit account with us, but they don't have it with us today. And so again, creating an opportunity to win more of that share of wallet exists for us, and that's what we're really excited about. When you aggregate it up, we basically have 20% of our clients that represent 80% of the deposit base. So 20% of your clients are premier, represent 80% of that $211 billion deposit base. Yet the greatest opportunity is what they have off us. So off us deposit opportunity is 4x what they have with us. And we look at the investments that they have off us, they have $2.4 trillion of investments off us. So that's a wonderful opportunity we have to bring into the franchise and grow our franchise. So what are we doing? What actions are we taking? What are we focused on? So the first thing that we're doing is making sure that we skill up our bankers to cover this particular book. So that includes our branch bankers. They cover assets which are deposits between $100,000 and $250,000. Our premier bankers cover $250,000 to $1 million. We're upskilling that talent so we got better interactions as well as improved productivity. We're also investing in expanding our premier banker coverage. So in those dynamic markets that are growing and that we have an opportunity to win, we're putting more premier bankers in the marketplace. We're investing in our financial planning solution set. What we have found is that when we have a client that has the financial plan with us, the revenue per financial plan on that particular account is 39% higher than a client that's Premier, does not have a financial plan. So financial plan is really to unlock to revenue deepening with our existing client base. So we're investing in that. And then we're also investing in making sure we have the right product set, making sure we have the right brand and make sure we're having marketing specific to this segment going forward because it's an important growth segment. So again, when we look at our opportunity to grow profitably, this is a great opportunity. And these are clients that already bank with us. And so our cost to get this additional opportunity of deepening is less than if you had to go out and talk to a branded prospect. So huge opportunity, and we're focused on it. When you look at scaling and you're looking at our best opportunity to become more efficient and really optimize channel performance, it's related to a connected channel strategy for us. And our connected channel strategy means, again, we want to be digital first, but not digital only. We have to find ways to make sure the interactions can be start-stop anywhere, be it branch or call center. And this is what this slide is really forecasting is how we are really sharing with you or displaying is how we're doing and executing against that particular connected channel experience. So on the left-hand side, you see that we have brought down transactions from our branches 8%. And so that successful transaction decrease is ending up migrating your clients to digital transactions. That's up 14%. So again, going to a lower cost to serve channel, but it's also unlocking that capacity that I talked about earlier. So you see that your branch production is up 59% on new deposit account acquisition. So again, being able to have those bankers focused on getting new services provided to prospects and clients. And we're also doing that through scaling how we serve, for example, our small business. So in 2022, we started to develop a virtual solution team to partner with our branches to service our Small Business segment. That segment is anywhere from $0 to $10 million in annual revenue, and we have bankers virtually serving that segment. You see their productivity is up 8% because they're able to have more contact frequency with those clients and serve a bigger population of clients. All these things are really coming together well and having a great impact on the business. You see from a business perspective, our client experience service scores in our branch are up 90%. You look at our mobile scores, it's 4.8. So we've got solid mobile scores. We're creating tons of capacity in new account openings through our digital experience. And then we're ultimately improving our PPNR per FTE. You see here, it's up 18% PPNR per FTE. So to wrap up or in conclusion, we are focused on accelerating growth in these priority markets that we are already in and have sound position. We are focused on improving profitability by deepening with our clients, super important to make sure we're delivering great care. We're having these wonderful conversations and bringing in partners to be able to do that. And then we're focused on activating capital. And activating capital, but also maintaining our risk discipline. I am more excited than I've ever been. So I've been with the company 29 years ever since I was an intern. And every day when I walk in and watch our teammates show up with care, focus on taking care of clients, focus on doing the things we need to be efficient so we can drive stakeholder value. We're doing that with intense focus, and I'm super excited about that opportunity. I want to thank our teammates for doing that because they're the ones that are delivering the results that I share with you today. Also I want to thank our shareholders for trusting and investing and believing in Truist. And at this time, I want to thank you for listening, and I'll turn it over to Terry, so we can begin the Q&A.

Thanks for that, Donta. You've had a broad range of experience at Truist, including digital, wholesale, operations and now obviously, consumer. So can you just discuss how these experiences are influenced how you are currently running consumer and small business and your thoughts on how they'll operate in the future?

Yes. Thank you for the question, Terry. As I mentioned earlier, I started with the company as an intern in sophomore year in college, and I shared with some yesterday, it was not the intern experience that our teammates have today. They are doing modeling and strategy. I was taking cars to get washed and going to go pick up food. But that's how I started with the company. But the opportunities I've had to serve in those different capacities, you mentioned some key ones, both digital enterprise, leading enterprise operations and also being a wholesale definitely impacting how my team and I, because we do it together, lead the business. And so when you think about digital, we are taking strong position. So we want to be digital first and not digital only. So we've changed that. We made that a mandate. You see how we've been able to drive transactions to the digital channel. Also, if you look at our increase in account acquisition, the reason why we're growing that news because we're doing it more in the digital channel. So that is the focus to make sure everybody is fully focused in on creating that experience. That's what clients demand and that helps us scale up. When you think about enterprise operations, that experience gave me the wonderful opportunity to see end-to-end and appreciate how policy and process and automation can really help scale your business and reduce cost and efficiency. So it gives us a chance as a team to look at not only how we solve on the front end, but how can we solve on the back end to make things more simple, easy and fast for teammates to be able to help clients and for clients to be able to transact with us and then drive shareholder value by doing it at low cost. And then wholesale, I spent most of my career in wholesale, which is a wonderful opportunity serving our clients in that particular segment. What that allows me to do with the team is to think from a continuum perspective. So we just try to think every day, how do we grow these consumer retail clients to become wealth clients. How do we grow these small business clients going from start-up to ultimately become a wholesale client and maybe IPO one day. So Kristin Lesher, who leads our wholesale team, and I are partnered on the continuum. We think that growth engine and how we have delightful graduations for these clients because we're doing a good job helping them build better lives, we should be growing those clients to those higher-end segments.

And I should have mentioned, I'll ask a few more questions and open it up to the audience. Could you provide an overview of your strategy to utilize the branch network and your digital platforms to drive that growth? And can you discuss investments that you expect making in both of those businesses and verticals?

Yes. All the channels are important. Clients want to be delighted in every channel they use. I know 5 years prior, there was a lot of discussion of where branches are going to continue to decrease and ultimately maybe evaporate, that's not happening. When you look at your clients, they still use multiple channels. As a matter of fact, the Gen Z is using the branch channel as much as the Gen X. And so it's actually going back the other way. They're using, again, multiple channels to solve their banking needs. So all channels are important to us. That's why we talk about delivering a T3 experience, which is touch plus technology to build a higher level of trust. Super important to have a connected channel experience so they can start and stop anywhere. A great example of that is if they're calling us about a -- or using our Truist Assist and they're trying to solve a problem, but they can't get their question answered, they can push a button. They can go to one of our call centers. We pick up immediately from that particular interaction. They don't have to start all over. Our caring teammate can start to talk to them about whatever they were solving for. So that's important to have that connected channel experience. The things that we're investing in are aligned to the 3 Ds that I talked about. So if you think about deposits, we're investing digitally to drive acquisition. So we're investing in making sure we have a dynamic user experience. So making sure that navigation through application flow is meaningful and it meets clients where they're at. You've seen us really do a good job of streamlining that. We ended up improving our conversion rate 500 bps last quarter when we mentioned that on our earnings call. That drives immediate impact to the bottom line, if we can get clients quicker through the process to open and fund their deposit account. We're investing in other areas as it relates to being able to enable teammates, for example, to also do more deposit acquisitions. So we invested recently in what's called ID verification. So our teammates are calling their clients and they're having these caring conversations, having these financial check-ups. If a client is not at one location and they get excited and they want to open up a new deposit account; before we have to say, why don't you come in and drive in and we can open it for you. Now with this ID verification, we have the solution where clients can take a picture of their driver's license. We get that picture. We have the APIs connected to the DMV to confirm that this is a real client. So we're able to authenticate and now open an account without that client having to make that travel distance to come in and open it. It's also improving our fraud pull-through. So that's the way we're investing again for deposits. For deepening, we're starting with investing and making our rich data wealthy data. So we have all this data. And when we consolidate these businesses, for example, we had all these consumer businesses and they all had their own data. We were focused more on maximization versus optimization. We weren't doing a great job of having an integrated conversation with clients. It was more campaign oriented. And so we're taking all that data. We're investing in a single view of the client so that we can, near real time, have the best conversation with them. It may be a mortgage, it may be a deposit, it may be merchant services that would always change based on their activity and what they're doing and what we're seeing them do and that's why we're investing in that particular data platform. We're also investing in authenticated marketing so that we can unlock that opportunity. So when clients at $2.5 million that sign into mobile every day or in that mobile experience, they may be making a payment in Zelle, and then we can have a conversation with them about a new credit solution or a new deposit solution. So we're investing heavily in authenticated marketing. And then the third D that we're investing in is digital and that's around transactions. So we're making sure we enhance our Zelle platform. When we look at primacy, for example, I mentioned that we have 82% primacy with our client base. When they have Zelle, they are using Zelle, they have 95% primacy. Clients that don't use Zelle are at 75% primacy. So we're trying to make sure we're investing to enhance that experience as well as bill pay and bring in different capabilities like we've brought the wire capability to our wealth clients this year. And in the future, we're going to be bringing that same capability to our premier client in 2025. So that's how we look at our investments.

Maybe one more, just a question on credit. Losses in consumer have stabilized and even come down in certain portfolios. So how is the health of your consumer portfolio? And any specific areas of concern?

Yes. We're pretty optimistic about the consumer health. One of the reasons that really drives that is that consumers are employed. So we look at several different things that determine our outlook on consumer health. We start with that. When consumers have jobs, they're able to continue to make purchases. They're able to repay debt. So that's an important factor. Then we go on and look at other things such as where is their liquidity position. And if you look at consumer's liquidity position, this is retail consumer, they're indexing 120 to pre-Covid. So they have good liquidity. Then we look at our refresh FICOs and refresh DTI, debt-to-income, ratios to say, well, how their debt payment stress? The refresh FICOs are just as high as they were last year. DTI is just as high. If you look at some of the things that's happening with their savings, they're saving 100 bps more than they were saving last year. And so that's putting the consumer in a really, really good place, probably because you have this inflation that started to decrease. They continue to have higher wages, that's increasing their capacity to spend and pay debt back and then you have their variable debt coming down. So that's creating capacity. But even if you aggregate all that up, most of your consumers, particularly on your upper income band, 90% of their debt is fixed. And they got that fixed debt at a home or auto several years ago, only 10% is variable, and that's coming down. Now on the lower income band, we are seeing some stress there in some pockets. And so that lower income band is having some stress. They have more credit card debt as a percentage of their overall debt. So we're watching that and paying attention to that, making sure that we manage our credit discipline to be able to react to that. So we're seeing that in that pocket. As it relates to small business, it's also to tell those 2 stories. I'm a little bit more neutral on our small business. And the reason why is as we're underwriting small business credits, what we're seeing is that their margin is contracting a little bit and their profitability is decreasing. So we're just paying attention to that. We're also watching small business optimism. And from a historical average, they're less optimistic than they've been. This is all data, obviously, preelection. We'll see if that optimism picks up, but they're currently uncertain. And then when you think about their debt load or their debt mix, their debt mix is highly variable. So in the small end, especially, they have to carry higher variable debt in addition to their business debt, they also are financing many of their business opportunities with personal credit cards. So they have the worst case of both because they're carrying variable debt on both sides of it. They continue to have high labor costs and they also continue to have high medical costs. And so some of that's putting a little bit of strain. Now I'm a little bit optimistic when you have a conversation with them, they do see the opportunities. They also see that remember, consumer is still productive and out there spending. Most consumers go to small businesses. And so again, I think there will be some unlock from an uncertainty perspective that gives them confidence to go out and get the equipment, we'll ultimately provide that credit for equipment and you start to see that loan production demand pick up, but it's soft at the moment.

Questions from the audience? Let me start with Mike.

Mike Mayo, Wells Fargo. I guess my question is the paradox of Truist. Great franchise, but not so great revenue growth. So if I heard you correctly, you have scale, you're the second largest bank, you have density, 25% [indiscernible] deposit share, you've a footprint in fastest growing markets, good distribution, 1,900 branches, digital, national consumer businesses, you have a customer of 18-year average tenure, you have a go to market with the 3D deposit, deepening and digital, you have excitement, as you said. So we hear a great story, but then we're looking at -- I'm not talking [indiscernible] 12%, but it's average revenue growth for what's an exceptional franchise. So where is the disconnect? And also, when we talk to many of your competitors, they say they gain share from you. So if you can just respond.

Yes. Thank you for your question. We have the same passion, conviction, and prioritization, as you, Mike, as it relates to growing our business and making sure it shows up in the financial results. And that's why we're focused on the things that we can really control over time. And if we do those things exceptionally well, they ultimately produce the financial outcomes, and you'll see that showing up to date to show up in more meaningful ways. We just shared how that positive CAGR over those last couple of years. We shared how we're growing net news. We're sharing our deepening opportunity as you'll see in front of us going forward. And we're focused on that very intensely. And as it relates to the market share, remember, we're in this high rate environment. And so market share could be a little bit misleading if you just look at balances. And so you have to look at other things like net news or you're growing your core franchise, and are you growing primacy over time. And in both of those net news are growing, and we're very, very proud of the continued growth there. And then our primacy of that net household is also growing. So when rates come down, things stabilize, we're best positioned to be able to bring the results in and create even more profitability and return to shareholders. So I'm excited about the momentum. We still have work to do. And every day, we wake up going in and say, how can we do those 3 Ds so we can ultimately drive the performance of our company so that we can reward shareholders and we continue to stay focused on that.

[indiscernible].

Yes. Thank you for the question. So we're very focused on making sure that we take care of clients and that we remain competitive so that we can not only protect share but grow share. At the same time, we're very focused on managing our rate pay. And so in the current environment, that's been a priority of ours. And we started managing rate paid and testing our rate paid down playbook all the way back in February. So we started to look at the rate sensitivities for certain portfolios. How we can surgically bring down beta in certain pockets, particularly if they're nonprimary accounts and are single service, we pass a more aggressive beta down to them. We started looking at our CDs and saying that we had the CD wall where CDs were maturing, the majority of them, every 12 months. We shortened that wall to CD waves. So changed it to 7 terms -- 7-month terms, 5-month terms, so we can lower the duration and reduce the risk and be able to react a lot quicker. We ended up enhancing our money market from a competitive perspective on price so that we can move more CDs to money markets. So again, when betas drop, we can more aggressively bring down that beta while also trying to make sure we again protect clients and drive the things that are helping us grow the book of business. So it's a balance that we have every day. We have a wonderful weekly meeting with our CFO, Mike, and we talk every single week, Kristin, Mike and I about, what's the opportunity? What's the competitive environment? And sometimes I'm in that meeting, I'm pushing for us to be a little bit more assertive so we can win share. Mike is pushing for us to reduce that rate paid a little bit more assertively so we can lower our costs. This week, we had our meeting, and I was pushing for us to lower cost and Mike was making sure we were balanced on growing share. So we have that balanced conversation on a weekly basis to make sure we're doing the right thing for our client as well as doing the right thing for the company so we can improve profitability for the shareholder. So I felt that we're really well positioned. Again, we've tested the playbook. We know how to execute the playbook. In the third quarter, you saw us reduce our rate paid by 1 bp at the company level. We reduced it by 2 bps within consumer and small business banking, and that was at the end of the quarter. So already showing the type of activity that we can take when we need to, to be able to reduce rate paid.

[indiscernible].

Yes. That's a commitment that Bill made as it relates to where our ROTCE needs to be. And what we're doing is, in partnership with all of my peers doing activities that drive that. And so we're focused on accelerating as quick as we can. So every day, again, going back to the things that we can control and specifically the consumer and small business, the more deposits we can get at low cost and by growing net news, that's going to give us an enhancer from a profitability perspective, the more that we can deepen with our existing clients. And what's great about that, it doesn't take like superhero type things to do that because your most expensive cost is when you first got the client, it's less costly to deepen with the client. So we're focused on bringing on the additional solutions that we have and they want that they're using. And then we're focused on driving our efficiency down by making sure we move clients to the digital platforms, our virtual platforms, so we can serve them in the most efficient way. If we do that every single day, that's what I want our teammates to know, look, just do the 3Ds, it's what you can control. Over time, that produces better productivity, better performance on profitability, and then you'll see us continue to take advantage of moving share in a way that allows us to achieve that ROTCE of the mid-teens.

And I think with that, we'll wrap it up. Thank you, Truist. Thank you, Donta.

All right. Thank you.