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

Jul 16, 2020 • 08:00 am ET

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

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Q & A
Executive
Daryl N. Bible

we don't carve them out. We believe that those COVID expenses will moderate over the next quarter or so. So you'll be able to really see the cost saves as they moderated. But we're probably in the 15% to 20% range right now. And with the cost savings that Kelly said that we are actively working on, by fourth quarter, we'll have 40% of it we believe in fold.

Executive
Kelly S. King

Yes. And also, I didn't mention too, Betsy, so we, in addition to those items Daryl mentioned, we had COVID-related reductions in income including money back on credit card purchases, the other types of incomes, NSF reductions, waivers, so were just so pretty big number. We haven't been trying to call that out, because I think most people are trying to kind of do the same thing. But it is material.

Analyst
Betsy Graseck

Right. So maybe you could just, as a follow up to the question, just talk a little bit about how you're anticipating the forbearance programs that you have in place. Stating from here, I just -- I'm not sure, are you going to be retaining people in forbearance until further notice? Do they roll off at a specific point in time? And maybe speak to both, the loan side as well as the fee waivers that you just mentioned?

Executive
Clarke R. Starnes

Yes, Betsy, this is Clarke. I'll take the credit accommodations. I know Daryl and Kelly gave you the statistics there. I would tell you this we are seeing a substantially lower new incidence of client accommodation requests. I think much like others, the big wave was early on. And so, our focus now is actually on the expiration of the initial forbearance that we granted and whether they're going to need additional relief or not.

So what we have been doing on both the wholesale and the consumer side, we've marshaled substantial resources. But we're actually reaching out to these borrowers, whether they're individuals or whether they're businesses and trying to anticipate what they think their needs are, or what their current financial situation and outlook is, so that we can get a sense of what lies ahead.

And I can just tell you, it depends on the individual situations we're seeing anywhere from 0% ask -- think they'll need another accommodation to some asset classes. It might be 50%. So we're trying to take all that into consideration, be compliant with the CARES Act. But we're going to be much more thoughtful about the second wave to make sure that we're not kicking the can down the road. And so, as we're doing these reviews, we're also effectively, where it's appropriate, deferring the interest accrual. And Daryl talked about that. We're actually -- got reserve there, if we think there's higher probability of re-default. And then, we're also, through this re-grading, that's definitely included in our modeling in our loan loss reserves.

Analyst
Betsy Graseck

Okay, thanks. And on the fee waiver side, is that something that will sunset at some point?

Executive
Kelly S. King

Yes.