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If more capital flexibility is necessary - a possibility that large and regional banks are considering, given new capital requirements - Truist could sell more of its insurance business, executives have said.Įxactly what Rogers and Maguire say, or don't say, on Monday is of keen interest to Wall Street. The sale helped lift Truist's common equity Tier 1 capital ratio by 50 basis points to 9.5% as of June 30, the company said. In February, Truist sold 20% of its massive insurance brokerage subsidiary to a private equity firm, a move that executives said would fund future growth and boost earnings over time. Truist has also decided that it will no longer sell or trade mortgage-backed securities and certain bonds, and executives have warned that there could be more cuts both in the mortgage business and in the amount of real estate the company occupies. The remix includes selling a $5 billion student loan portfolio and folding its online consumer lending platform, LightStream, into its broader consumer business in order to cut the costs associated with operating a second brand.

To counteract some of the headwinds, the company is remixing its balance sheet, one part of an enterprisewide effort to cut costs, improve efficiency, build capital and simplify its operations. The most recent adjusted revenue guide reflects lower net interest income as a result of higher deposit betas, slower loan growth and lower investment banking fees, Maguire said on the July earnings call. In January, management forecast revenue growth of 9% for 2023. And that wasn't the first, or second, change in Truist's revenue outlook. In July, management called for 1% to 2% growth versus the 3% growth that it had projected in May. Projected revenue growth for 2023 keeps shrinking. The company, now based in Charlotte, North Carolina, said the uptick from 2022 was partly the result of higher personnel expenses, including an increase in Truist's minimum wage that took effect last year, and higher regulatory costs.Įxpenses aren't the only issue that's agitating Truist investors. But instead of declining, expenses have been going up.ĭuring the second quarter, noninterest expenses totaled $3.75 billion, up 1.5% from the first quarter and 4.7% year over year. The deal - which combined the $225 billion-asset BB&T in Winston-Salem, North Carolina, and the $216 billion-asset SunTrust in Atlanta - was supposed to produce annual cost savings of $1.6 billion by the end of 2022. It remains the largest 'merger of equals' in recent banking history. and SunTrust Banks created the $565.8 billion-asset juggernaut known as Truist.

'They need to start getting expenses under control, and if they don't have the right people in place, they need to get the right people,' he said.

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That's the highest projected annual uptick in spending among the large banks, and it's happening at a time when Truist was supposed to start realizing the full cost-savings benefits of the merger, Mayo said. The frustration is largely due to the projected increase in Truist's expenses, which are now forecast to rise 7% year over year. Investors are at 'a boiling point' after the company's most recent earnings call, said Mike Mayo, an analyst at Wells Fargo Securities.