Truist Financial Corp (NYSE:TFC) Q2 2020 Earnings Conference Call - Final Transcript

a new product, and we'll see how it all plays out. But if you look at the fees, obviously, we set them up on the loan system. And they get amortized to go over a two-year time period. But as they get the forgiveness and then get paid back, all that left accretion to that loan would actually come into earnings in that time period.

So our assumptions are that, we believe 75% of our production in PPP will get forgiveness. We believe that, this is the timing that we put in our models. In the fourth quarter, 30% of the 75% will get forgiven, 65% of the 70% will get forgiven in the first quarter of 2021, and then the remaining 5% of the 75% in quarter two of 2021. The other 25%, we think will go all the way to term and from that perspective.

That's our estimate. It's our best guess, they did modify it. So we pushed out a little bit. PPP is very fluid. It tends to change a lot. So we'll see how things would react. But this is our best estimate right now.

Got it. And that will impact the margin when it happens. But I imagine you break that out. So would this be a onetime event in each of those quarters?

Yes, we'll mention it. I mean, it's in our run rate now a little bit, because you're still amortizing, basically, the fee over that two-year time period. So like for this quarter, it was worth about $49 million of our net interest income for the second quarter.

Okay, great. Well, that's helpful. Thank you very much, guys.

Thank you. You have a great day.

And at this time, it looks like we have no further time for questions. So I'd like to turn it back over to Ryan for any additional or closing remarks.

Thank you, Alan, and thank you, everyone, for joining us today. I apologize to those with questions we didn't have time to get to. We will certainly reach out to you later today. And we wish you all the best. Goodbye.

[Operator Closing Remarks]