Truist
Annual Report 2020

Plain-text annual report

To inspire and build better lives and communities 2020 Annual Report Truist at a glance Standing for better Truist Financial Corporation is a purpose-driven financial services company committed to inspiring and building better lives and communities. 6th largest commercial bank $509B in assets ~15.8MM clients Regional businesses • Commercial banking • Premier banking • Retail banking • Small business • Treasury solutions • Wealth National businesses • Commercial real estate • Corporate and investment banking • Dealer finance • Mortgage • National consumer finance and payments • Retail and wholesale insurance 1 Regional businesses National businesses Purpose To inspire and build better lives and communities Mission For clients Provide distinctive, secure, and successful client experiences through touch and technology. For teammates Create an inclusive and energizing environment that empowers teammates to learn, grow, and have meaningful careers. For stakeholders Optimize long-term value for stakeholders through safe, sound, and ethical practices. Values Trustworthy Caring One Team We serve with integrity. Everyone and every moment matters. Together, we can accomplish anything. Success When our clients win, we all win. Happiness Positive energy changes lives. 2 Facing challenges together: From our chairman and CEO In a year filled with challenges for our clients, communities, and teammates, Truist demonstrated strong leadership and decisive action in 2020, guided by our purpose to inspire and build better lives and communities. Within months of our historic combination of BB&T and SunTrust, we quickly changed course to meet the urgent needs confronting so many of us as a result of the COVID-19 pandemic and associated economic hardship. And in the spring, as the tragic deaths of Black Americans drove a long-overdue national conversation focused on racial inequity, we renewed and strengthened our commitment to social justice and equal opportunity for all. While meeting these challenges became our top priority in 2020, we also made substantial progress toward key merger milestones that position us to outperform our peers and reward our shareholders. To address the pandemic, Truist moved swiftly to safely serve our clients and support our teammates and communities. For our clients, we kept branches open, waived fees, and made other accommodations for more than Kelly S. King Chairman and CEO 3 750,000 consumers and businesses. Our digital teams produced several new products to meet client needs that allowed them to continue their banking remotely, such as e-signature and chat bots. We were one of the first financial institutions to begin accepting digital applications for the Small Business Administration’s Paycheck Protection Program (PPP), and were able to help more than 80,000 companies quickly receive nearly $13 billion in PPP loans. For our teammates, we provided more than $100 million in pandemic-related support, including additional time off, enhanced benefits for child- and elder-care, and a $1,200 coronavirus relief bonus for most nonexecutive teammates. For our communities, we launched Truist Cares, investing more than $50 million targeting the short- and long-term needs of those suddenly without jobs, vulnerable small businesses and communities, seniors needing food and medical supplies, and students without access to technology, among others—awarding 355 grants to nonprofit organizations. When the tragic deaths of Ahmaud Arbery, Breonna Taylor, George Floyd, and too many others caused our nation to again come face- to-face with its appalling history of racism, we began by looking inward. In more than 260 “days of understanding” town-hall-style meetings with teammates, we took a hard look at ourselves in authentic, raw, and often uncomfortable dialogues. As a result, we expanded and strengthened our unconscious bias training, accelerated diversity recruiting, and invested $40 million to support minority-owned businesses, among other initiatives. It’s long past time to reject hate and discrimination in all their ugly forms and take a stand for sustainable change. The challenging environment helped bond teammates from both heritage companies even A $500,000 Truist Cares grant helped Georgia’s nonprofit Phoebe Putney Health System replenish its supplies of personal protective equipment for front-line health care workers and also prompted a wave of other donations. 4 From our chairman and CEO faster than we had anticipated. It united us through a 2020 adjusted ROTCE* clearly defined culture—our biggest driver of long-term 16.0% success—and aligned us around shared values such as trustworthiness, caring, and one team. In our first year as a combined company, Truist’s response to 2020’s challenges proved that the values and culture of our legacy companies were already closely aligned and are positioning us to succeed. Reported ROTCE was 13.4%. And, as odd as it sounds given the turmoil of 2020, we spent a lot of time talking with teammates about happiness—our ultimate value. Especially during times of engineers, financial technology firms, and many others to develop better ways to serve our clients. We also created Truist Ventures to accelerate our technology fear and anxiety, we believe it’s crucial to be positive and development by partnering with and investing in even happy. I’ll talk more about why that’s so important visionary companies. later in this letter. Our 2020 accomplishments First, let me outline how we are leveraging the many advantages of our merger of equals. Among our accomplishments in 2020: We introduced our new brand and values, launching the Truist visual identity, establishing the Truist Center in Charlotte as our corporate headquarters, and releasing our first Corporate Social Responsibility Report. With Truist operating in seven of the nation’s 10 fastest- growing markets, we are confident in our potential to We deepened our client relationships, offering a wider array of financial services and products by leveraging synergies between our heritage banks. For example, we’re now offering BB&T’s extensive insurance options to heritage SunTrust clients, and SunTrust’s robust investment banking and capital markets capabilities and LightStream consumer lending digital platform to heritage BB&T clients. Through our collaborative Integrated Relationship Management, or IRM, process, we’re earning business from existing clients by fulfilling more of their financial needs. grow our revenue, serving new and existing clients in our We outperformed our peers, with top rankings in fantastic Southeast, Mid-Atlantic, and Texas footprint. We started integrating our operations, converting eight business units, including Truist Securities, our investment banking business that combines SunTrust Robinson Humphrey and BB&T Capital Markets to serve growth- oriented companies and institutional investors. We also divested 30 branches and combined 104 locations into blended branches serving clients from both heritage banks. We expect to finish converting all branches to the Truist brand in 2022. efficiency, return on average assets, return on average tangible common equity, and net interest margin—key profitability measures. We maintained strong capital and liquidity, combined with disciplined, conservative risk and financial management and diversification across clients, business lines, and geographies. We also earned top recognition from J.D. Power as No. 1 in mobile app satisfaction and from Greenwich for small business and middle market lending. We increased our investment in digital transformation, starting construction on our new Innovation and 55.9% Technology Center in Charlotte, where teammates from business units throughout Truist will partner directly with clients, innovators, digital product managers, designers, * Refer to Pages 33-34 for reconciliations, explanation of use of non-GAAP information, and list of peers. 6 From our chairman and CEO We attracted and retained talented teammates and rallied during this difficult year to meet those high broadened our leadership, reflecting Truist’s strong expectations. In 2021 and beyond, we understand that culture and commitment to inclusion. Our reputation all of our stakeholders’ expectations of us, and our social as a great place for a long-term career attracted new responsibility as a corporate citizen, will continue to rise. teammates in technology, experience design, marketing, corporate banking, insurance, wealth, and other areas. We diversified our executive leadership and committed to do more over the next three years. The Greater Women’s Business Council, U.S. Black Chambers, and the Human Rights Campaign Foundation recognized our commitment to diversity, equity, and inclusion. And we’re proud to be honored by Forbes on its lists of the best places to work for women and veterans. Touch + technology = trust COVID-19 disrupted virtually every aspect of our work, our lives, and our families. We’ve also been disrupting our own business model to stay ahead of a massive paradigm shift in client expectations. Consumers now demand more digital convenience, saying, “We want what we want right here, right now, right in the palms of our hands.” To thrive in this new world, we’ve adopted a new value proposition—touch plus technology equals A key part of our leadership is a clear succession plan. trust (T3). It seamlessly integrates the personal touch that We’re fortunate to have Bill Rogers ready to succeed we’ve long been known for with innovative technology, me as CEO in September 2021, when I assume the role yielding our most valuable asset—the trust of our clients. of executive chairman. Bill is exceedingly qualified to lead, having served successfully as CEO of SunTrust for nearly a decade. We share the same deep beliefs in the importance of culture and change in our rapidly evolving industry. Maintaining purpose during crisis In my 48 years in banking, nothing comes close to the A key driver of our merger is the capacity to accelerate our investment in technology, in part by realizing our commitment of $1.6 billion in net cost savings. The Truist Innovation and Technology Center, a $31 million flexible workspace nearly the size of two football fields, will strengthen research, design, development, and testing to help us develop and launch new products and create challenges we faced in 2020. In March, when COVID-19 better, simpler, and more secure financial interactions prompted business shut-down orders that devastated for clients. the economy, we knew we had to focus on a forward- thinking, vigorous response for our clients, teammates, and communities, while also moving ahead on our integration effort. Clients have embraced our digital advances. Nearly 40% of our accounts are opened digitally. The digital platforms developed by our heritage banks both were ranked as industry leaders in Javelin’s 2020 mobile and online Our executive leadership team met for several hours banking scorecard. every day, rewriting responsibilities and reallocating resources. In just a few days, we quickly shifted more than 60% of our teammates to work from home and began funding clients’ PPP loans (we were among the nation’s top five lenders and one of the first to create a digital application portal). However clients interact with us, they’re seeking a trusted advisor who can seamlessly deliver the right mix of products and services to meet their financial needs. Our IRM process is how we implement touch plus technology equals trust. We offer the unique combination of our community bankers meeting clients’ needs by As the nation’s sixth-largest commercial bank, we connecting them to specialists such as our investment recognize our clients and communities have heightened bankers—and vice versa—while at the same time expectations of us, and financial hardships due to delivering those distinctive services personally or digitally. COVID-19 increased that urgency. I’m proud of the way our teammates, themselves facing loss and upheaval, 7 Why leadership matters Everything we do—for our clients, communities, teammates, and stakeholders—requires strong leadership to realize our value proposition. We start with three characteristics of outstanding leaders: First, be honest about where we are. Then be clear about where we’re going. Finally, have the courage to go there. Closely related is our leadership model: We believe that if we want to change results, we have to change behaviors. And to change behaviors, we must change beliefs. The Truist Leadership Institute is our crown jewel for leader development, unique in banking. For decades, it has helped our own teammates become more dynamic, self-aware, effective leaders who can boost morale and the bottom line. It also has provided benefits to our clients and educators in our communities. During 2020, due to our larger size and COVID-19, we committed to more than double the institute’s size while shifting temporarily to remote learning. We created podcasts focused on self-care for healthcare professionals and Truist teammates and provided training on leadership during times of change. Many of the toughest challenges we face as a nation hinge on effective leadership. One of my biggest worries is the sad fact that two out of three of America’s third graders cannot read at a “proficient” level, a key deficiency because reading is crucial to learning. Truist is helping address the problem through a digital reading game called WORD Force with our partner EverFi, now being used in 347 schools, as well as offering free Leadership Institute programs to principals at K-12 public schools. But we need our nation’s leaders to help. A generation of nonreaders, many of whom also can’t do simple math, face a dismal future and threaten America’s vitality in a changing global economy. 8 William H. Rogers Jr. President and Chief Operating Officer From our chairman and CEO Ellen Fitzsimmons Chief Legal Off icer and Head of Enterprise Diversity Kimberly Moore-Wright Chief Human Resources Off icer 9 Diversity and opportunity More broadly, leadership is essential to realizing the promise of the Declaration of Independence—a nation founded on the inalienable right to life, liberty, and the pursuit of happiness. We’ve not yet delivered on that promise. Nowhere is that more glaring than in the critical and immediate need for social justice and racial equity. As a company, we’re moving past words to meaningful and measurable actions. We started by listening and acknowledging the inequities our Black teammates have known all their lives during those uncomfortable “days of understanding,” which helped me understand the injustice in a more profound way. We committed to increasing diversity in leadership roles and ensuring ongoing pay equity reviews. Kimberly Moore-Wright, chief human resources off icer who we added to our executive leadership team, and Ellen Fitzsimmons, chief legal off icer and head of enterprise diversity, now report directly to me. It’s that first step of outstanding leadership—being honest about where we are. Now it’s time for clarity about our direction and the courage to reach our destination. As Larry Fink, founder of global investment firm BlackRock Inc., wrote in his annual letter to CEOs, “I cannot recall a time when it has been more important for companies to respond to the needs of their stakeholders.” Companies that stay connected to stakeholders by establishing trust and acting with purpose are better able to understand and respond to changes in the world—including the “historic crossroads on the path to racial justice”—and deliver long- term, durable profits for shareholders. As a nation, we must reaff irm the promise of the Declaration of Independence, and lead toward that vision. After a divisive national election—even a heartbreaking assault on our nation’s Capitol—seldom has there been a more crucial time for calm, reassuring leadership. Our nation must now focus on what unites us—not what divides us. Many of 2020’s challenges persist in 2021, including our discordant politics as well as the continuing risks posed by the pandemic and a weakened economy, particularly for the small and micro-businesses hit hardest by government shut-down orders. But I’m confident our nation will get through this. The economy is structurally strong, unlike previous downturns caused by economic events, such as the residential real estate collapse in 2008. I am also optimistic that COVID-19 vaccines will restore confidence in the economy, releasing pent-up demand from consumers and enabling businesses to expand their operations with conviction, freed from fear of additional pandemic-induced shutdowns. Our priorities in 2021 During 2021, we will continue to deliver on the promise of our merger of equals, including: • Combining the systems for more lines of business, such as our top-performing wealth and mortgage operations. • Realizing more cost savings and ways to win more business through our merger, with a target of achieving 65% of projected merger net-cost savings by year-end. • Enhancing our franchise, with continued growth in fee income, including from our robust insurance business (building on five acquisitions in just the fourth quarter of 2020). • Investing in the future, with initiatives such as client-centric agile product development, digital transformation, digital marketing, and expanding LightStream’s capabilities. Personally, I intend to spend most of my time in 2021 solidifying our culture throughout Truist. The challenging environment of 2020 prompted us to change our strategies and tactics, but our culture keeps our course true. Our purpose, mission, and values—the core of our culture—is our north star. As companies get larger and times get difficult, values become a vital foundation. Trustworthiness is one of our bedrock values. We care deeply and genuinely for each other, our clients, and our communities. Initiatives such 2020 diluted EPS* $1.18 $0.90 $0.97 $0.79 $0.83 $0.82 $0.73 $0.67 1Q20 2Q20 3Q20 4Q20 Adjusted Reported *Refer to Pages 33-34 for reconciliations, explanation of use of non-GAAP information, and list of peers. 10 From our chairman and CEO as our Lighthouse community service projects and the Truist Momentum program to increase confidence in managing money exemplify that care. Pulling together as one team was particularly important in 2020, our first full year as a combined company. Together, we can accomplish anything. Happiness and hope Our final two values—success and happiness—are often confused. Success is important: We help our clients be financially successful, but being successful doesn’t guarantee happiness. We believe happiness is the positive energy that comes from helping others and changing lives. Some would say 2020 was not a time to be happy, with the pandemic, economic challenges, and racial inequity. But it’s a mistake to wait for better times to be happy. In my conversations with teammates, I share four steps to be happy, even in the midst of a crisis. First, simply choose to be happy. We get to decide every day how to live with the circumstances around us; we can’t make them disappear, but we can choose to approach them positively. Second, know our purpose in life, because if we know why we’re here, we can overcome any obstacle. Third, have a growth mindset; we can grow and change, rather than falsely believing we’re victims of circumstances, limited in what we can do. Finally, the most important step to be happy is to help others. Many studies have shown that if we help others be happy, we’ll be happier ourselves. I end my talks with teammates and other stakeholders with a challenge: Every day, imagine we’re given a bag of seeds—seeds of hope—with the opportunity to plant the seeds throughout the day with acts of kindness—a pat on the back, a smile, wishing a passerby a great day. With so many people hurting, our country desperately needs hope. I’ve never been prouder of our company than in 2020, when we planted many seeds of hope—large and small—to help our clients, teammates, and communities get through a very difficult year. Those seeds are really investments in our future—investments that also will deliver exceptional long-term returns to our shareholders. In 2021, Truist will be a beacon of light for all of our stakeholders as we live our purpose to inspire and build better lives and communities. We’re just getting started! May God continue to bless you and these great United States of America. Kelly S. King Chairman and Chief Executive Officer Feb. 23, 2021 11 12 Better performance Taxable equivalent revenue was $22.8 billion during 2020. Net income available to common shareholders was $4.2 billion, an increase of 38.2%. On a per share basis, net income available to common shareholders was $3.08. Key performance ratios compared favorably with our peers. Our fourth quarter results produced annualized returns of 1.05% on average assets and 14.99% on average tangible common shareholders’ equity. When excluding merger-related charges, the fourth quarter adjusted return on average assets was 1.35% and the adjusted return on average tangible shareholders’ equity was 19.03%. Robust fee income Record investment banking and commercial real estate income, plus a strong performance from our insurance business, propelled fee income in the fourth quarter. New business growth in insurance was 19.5% in the fourth quarter compared with the year-ago quarter, reflecting acquisitions and strong wholesale demand. Our Integrated Relationship Management (IRM) strategy, which focuses on meeting all of a client’s financial needs, also contributed to fee income, notably in investment banking with strong referrals from community bankers and our wealth business, among others. Increase in digital sales Our enhanced digital platforms drove a 26% increase in digital sales for the year compared to the prior year. Deposit growth was broad-based, supported in part by the federal government’s COVID-19 stimulus. We continued to lower deposit costs. Average noninterest-bearing deposits grew 10% on an annualized basis in the fourth quarter compared to the third quarter. Our financial performance In our first full year as Truist, we reported strong results driven by robust fee income growth, stable net interest income, disciplined expense management, and solid asset quality. Importantly, our diverse and complementary businesses carried momentum into 2021. 13 Stable asset quality Our asset quality ratios remained relatively stable, reflecting the diversification benefits of the merger, effective problem asset resolution, and reduced exposure to pandemic-sensitive industries such as energy and hospitality. At year-end, nonperforming assets (NPAs) increased one basis point from the previous quarter to 0.27% of total assets, while net charge-offs were 0.27% of average loans and leases, a decrease of 15 basis points. Truist’s allowance for loan and lease losses decreased to 4.39 times nonperforming loans in the fourth quarter, versus 5.22 times in the third quarter. Improved efficiency Noninterest expenses increased in the fourth quarter due largely to merger-related charges, although the adjusted efficiency ratio improved to 55.9% compared with 57.3% in the prior quarter. We will continue pursuing merger-related cost savings in 2021. We expect to close approximately 800 branches by 2022 and reduce our nonbranch footprint by 4.8 million square feet by mid-2021. Strong capital and liquidity Our capital and liquidity remain very strong. Truist’s board of directors authorized actions to optimize our capital position, including the repurchase of up to $2 billion of common stock, beginning in the first quarter of 2021. Our dividend and total payout ratios were 49.4%, comparing favorably with our peers. With our diverse businesses and markets, leading efficiency and returns, investments in innovation, and strong capital and risk profiles, Truist is committed to achieving a more stable earnings stream with less long-term volatility than our peers. * $1,603 $1,127 $1,111 $986 $902 $1,322 $1,068 $1,228 1Q20 2Q20 3Q20 4Q20 Adjusted Reported Capital ratios 12.7% 10.5% 9.3% 14.0% 11.6% 9.7% 14.6% $0.97 12.2% 10.0% 14.5% 12.1% 10.0% 1Q20 2Q20 3Q20 4Q20 Common equity tier 1 Tier 1 Total Nonperforming assets/assets 0.27% 1.10% 2020 adjusted return on assets* * Refer to Pages 33-34 for reconciliations, explanation of use of non-GAAP information, and list of peers. Reported ROA was 0.90%. 14 Protecting lives and communities Supporting our clients, communities, and teammates in response to the pandemic was a priority in 2020. Seemingly overnight, the COVID-19 pandemic turned our world upside down in March. As the sixth-largest commercial bank in the country, we knew we had a responsibility to serve where help was needed most. Through our Truist Cares initiative, we committed $50 million in grants to nonprofits for immediate needs related to the pandemic. We also found ways to help our clients—reducing fees, easing payment terms, expanding digital banking capabilities, and distributing nearly $13 billion in Paycheck Protection Program loans. And, we took immediate action to protect and support our teammates and their families. 15 Helping communities and clients Recognizing the extraordinary circumstances many faced in 2020, we provided greater payment flexibility while reducing costs for a broad swath of clients. 750,000+ retail and wholesale clients aided through payment relief programs, including forbearance, deferrals, extensions, and re-aging of loans $11MM in waived ATM fees and refunded surcharges to retail and small business debit clients $49.1B in commercial and consumer loans with accommodations 100,000+ families helped with monthly mortgage relief $13.4MM in statement credits given to credit card holders for grocery and pharmacy purchases Lending to preserve businesses and jobs Truist was the fourth-largest PPP lender— and we made additional loans to help businesses through the pandemic. The CARES Act was signed into law on March 27, 2020, and Truist—just eight days later—began accepting applications for Paycheck Protection Program (PPP) loans through an online portal our digital team created in the days leading up to the program’s start. Truist became the nation’s fourth-largest PPP lender, closing nearly $13 billion of PPP loans by the time the program ended in the summer. Those loans helped over 80,000 companies protect more than 3 million jobs. In many of our communities, Truist was the No. 1 provider of PPP loans. In addition to PPP loans, we provided $100 million in COVID-19 emergency relief loans to 2,300 clients. Many of our clients also drew down preexisting lines of credit to bolster their liquidity—especially during the highly uncertain second and third quarters of the year. These loans represent more than just a financial effort. They also represent an unprecedented mobilization of our teammates to build a new online loan process and rapidly respond to tens of thousands of applications. 16 Iyeshia Lattimore found help and hope for herself and her children at Brighton Center. Removing barriers, building better lives Truist partners with a Kentucky nonprofit to offer job training, child care, and other assistance to those in need. Even before the pandemic, Northern Kentucky resident Iyeshia Lattimore was barely getting by—stuck in a low-wage job and traveling hours each day between home, child care, and work. She missed quality time with her two children. Truist Cares provided a $25,000 grant to Brighton Center in response to the pandemic. The funding has helped the nonprofit handle the nearly 400% increase in the number of families accessing emergency assistance services. “I wasn’t eating well. I couldn’t sleep,” she says through tears. “I lost myself. I was just trying to push through.” Facing eviction, Lattimore found Brighton Center, a nonprofit that uses a holistic approach to help clients achieve self- sufficiency. Through a grant from Truist Cares, Lattimore received help—emergency rental assistance, affordable housing, five-star child care, and intensive training for high- demand jobs—all within walking distance. Lattimore was a standout trainee, becoming an official ambassador for Brighton Center—and a leader among her peers. After nailing an interview with the area’s largest healthcare employer, she secured an externship that led to a full-time job as a medical assistant. “I’m not stopping here,” says Lattimore. “I’m going back to nursing school to become a registered nurse. I’m going to get a house for my kids. They need a backyard—space to run.” 17 Helping a hospital with a critical supply shortage Early in the pandemic, a Truist Cares grant came to the aid of a rural health system. Will Runyon remembers what it was like when they realized they had their first COVID-19 patient in Albany, Georgia, in March 2020. “It was pretty scary being told, ‘Hey, you’ve probably been exposed to this new disease that could possibly kill you,’” says Runyon, a hospital chaplain for Phoebe Putney Health System. Phoebe, a not-for-profit health system, serves patients across southwest Georgia, an area where early U.S. exposure “ Gowns, face masks, shoe coverings, eye protection, face shields—we were short on everything.” —Carolyn Higgins, Phoebe Putney Health System spiked. But like most health systems, they weren’t stocked for a pandemic. Carolyn Higgins, Phoebe’s chief fundraising officer, says they went through about six months’ worth of personal protective equipment (PPE) in just five days. “Gowns, face masks, shoe coverings, eye protection, face shields—we were short on everything,” she says. Around this time, a $500,000 Truist Cares grant was provided to Phoebe. Higgins says this not only immediately helped the front-line workforce secure PPE—it also prompted a wave of other donations. “It really helped bolster the morale of our team,” Higgins says. Runyon says Phoebe hasn’t run out of masks during the pandemic—and its workforce has never lost hope, thanks in part to support like that of Truist Cares. “The fact is, we wouldn’t be able to do what we do to this extent without that kind of help and support.” Supporting front-line pandemic relief Our Truist Cares initiative put $50 million into the hands of trusted nonprofit partners who are best positioned to address critical community needs. We awarded grants to 355 nonprofits, including United Way agencies, the CDC Foundation, Johns Hopkins Medicine, the Boys & Girls Clubs COVID-19 Relief Fund, and many others. For example, $2.5 million was given to TechSoup, a nonprofit provider of technology solutions, to help grassroots organizations make critical technology investments and serve those most vulnerable. Truist also made a $7 million grant to the United Way COVID-19 Relief Fund to address pressing needs in more than 300 markets. 355 grants awarded to nonprofits 18 Protecting lives and communities Taking care of teammates A $100 million investment helped our teammates stay safe and healthy as they faced their own pandemic challenges. Truist teammates devoted themselves to serving clients and their communities in 2020, despite obstacles COVID-19 created. But most of our teammates also faced personal challenges, and we knew they needed help. We committed $100 million to support our teammates as they faced increased pressures at home and work, providing more flexibility and additional assistance through paid time off , emergency child- and elder-care benefits, and tutoring help for children. Following the guidance of public health off icials, our Together Safely strategy ensured the health of our teammates as they continued to serve clients as essential workers. For onsite teammates, we took steps to ensure social distancing, frequently disinfected high-touch surfaces, and controlled access for branches. Through a massive technology eff ort, we enabled more than 60% of our teammates to work remotely in just a few weeks. Truist provided free COVID-19 tests and treatment, and about 75% of our teammates received a $1,200 coronavirus relief bonus. 1919 Corporate social responsibility At Truist, we viewed the challenges of 2020 as a call to action—to help our communities, our teammates, our clients, and all our stakeholders. As you can see in the examples to the right and throughout this report, we rose to the challenge. Banking is just the beginning. Our purpose—to inspire and build better lives and communities— motivates us to make positive changes every day and contribute to society. Corporate social responsibility (CSR) and responsible environmental, social, and governance (ESG) practices are critical to our company’s sustainability and our collective success. We also recognize that a strong ESG program enhances risk management and contributes to long-term value creation. The challenges of 2020 showed us that corporate social responsibility is more important than ever. We are committed to being a catalyst for change—and for good—among banks. We look forward to sharing more information on our company’s ESG initiatives and programs in our 2020 Corporate Social Responsibility report, which will be published this summer. 2020 highlights Community giving and impact $178.6MM Total giving by Truist1 Truist Charitable Fund $80.5MM/ 466 grants2 Truist Foundation $79.77MM/934 grants 91% of grants to groups serving low- to moderate-income families2 Support for affordable housing $58.1MM in investments $13.3MM in debt backing Construction jobs created: 1,493 Permanent jobs created: 1,230 LIC members served: 106,9064 Affordable housing units created, sustained, or improved 17,637 backed by loans 4,624 backed by debt5 $7.06MM total support to 358 United Way chapters Progress on Community Benefits Plan 114%7 $818.3MM/163 community development investments3 $7.4B/4,038 community development loans6 Lighthouse Project volunteerism 1,700+ community service projects completed Nearly 35,000 volunteer hours to local nonprofits Positive impact on 1.7 million people Environment Milestones Disclosed Scope 1 and Scope 2 emissions Published Truist Environmental Statement Completed inaugural CDP reporting 880+ acres of trees planted through LightStream’s plant a tree with every loan donation, in partnership with American Forests Renewable energy $2.4B of clean energy and sustainability financing includes a $75 million commitment to a $550 million financing of a custom barge to help build offshore wind farms $534.4 million in solar funding, reaching 15,703 households Childhood literacy and education WORD Force childhood literacy learning game in 347 active schools8 6,990 students9 Investing in our teammates Governance 9.5% voluntary annual turnover rate among Truist teammates vs. 13% average for the industry (as of November 2020)10 1,000+ free career coaching sessions for teammates Formally kicked off the first meeting of our ESG Council in November 2020 10,000+ teammates participating in one or more business resource groups Awards and recognition Human Rights Campaign’s Corporate Equality Index 100% score and named Best Place to Work Forbes Best Places to Work for Women 2020 Best Employers for Veterans 2020 2020 United States Black Chambers Corporation of the Year Award Truist Momentum 142,602 employees participating at 31 companies 57 classes taught 1. Includes Truist Foundation, Truist Charitable Fund, Regional/CCB, and CRA. Truist Cares numbers are included in the foundation and charitable fund totals. Some numbers are rounded. 2. These numbers include Truist Cares. 3. Investments as of Dec. 31, 2020; tax credits 5. Investments and loans created, sustained, or bonds, not grants. or improved as of Nov. 30, 2020. 4. Truist Community Capital NMTC Deals closed in 2020; equity includes investments into third party allocation; debt is ST CDE allocation. 6. Loans as of Dec. 31, 2020 7. Of year-to-date December 2020 goal 8. School count based on 2020 calendar year, so there may be schools that participated in both the spring and fall vs. unique schools. 9. 2020 calendar year 10. This number excludes temporary populations like interns. Advancing diversity Suppliers that reflect our communities Our supplier diversity effort aims to ensure that our suppliers reflect who we are as a community and company while enhancing our client experience, strengthening our operations, and enriching our communities. “By partnering with a diverse supplier base across our footprint—especially certified diverse-owned businesses—we drive innovation to support the needs of our clients, help local businesses grow, support the local economies, and contribute to the success of the communities we serve,” says Chairman and CEO Kelly S. King. We have expanded our supplier diversity team to achieve these goals. We are making great strides in increasing our total spend with diverse suppliers. We have a multi-year plan in place to enhance supplier diversity, and we have already exceeded our target for the first year in 2020. Through our newly launched Truist Tier2 Supplier Diversity Program, we’ve invited our top strategic suppliers to actively support subcontracting with certified diverse suppliers. Community 400+ partnerships with national and community organizations advancing diversity, equity, and inclusion 600+ diverse and multicultural community partners through our Multicultural Banking offices $40MM to launch CornerSquare Community Capital, funding diverse small businesses, with a focus on African Americans and women $5.5MM for social justice grants $12.5MM to empower our communities Leadership and team diversity 10,000+ teammates are members of 8 business resource groups 14-member executive leadership team includes two women and two African Americans 45% of board of directors are women and/or members of racial/ethnic minority groups 260+ days of understanding sessions in 2020 Committed to • Ongoing pay equity reviews • Increasing diversity in senior leadership roles from almost 11.9% to 15% in three years Accomplished • Established a new Diversity Recruiting team • Participated in 18 HBCU career fairs Signed PwC’s CEO Action for Diversity & Inclusion Joined Business Coalition for the Equality Act Recognitions and awards Florida State Minority Supplier Development Council–President’s Award “Top 50 Employers” by CAREERS & the disABLED Magazine Greater Women’s Business Council 2020 TOP Corporation National Business Inclusion Consortium (NBIC) Top 50 Best-of- the-Best Corporations for Inclusion US Pan Asian American Chamber of Commerce– National Top 35 Corporate Star 21 Improving education, strengthening communities Strengthening the next generation Financial literacy program for high school students helps them make smart money decisions, teaches them about paying for college. Truist Financial Foundations, an interactive financial education program designed to help high school students understand and use basic financial concepts, passed the 1 million student threshold in 2020, 10 years after it was launched. The interactive lessons cover topics such as banking, budgeting, managing credit and debt, and financing higher education. Before-and-after assessments show that in the 2018–2019 school year, students who participated in the program increased their financial knowledge by 78%. In 2020, Truist temporarily made the program available for free to all U.S. high school students. Chip Lucas, executive director of the Career and Technical Education center at Cumberland County Schools in North Carolina, says the program helps students gain the confidence to make decisions about applying for financial aid and loans. “Truist Financial Foundations helped me identify all the different steps and measurements I need to take in order to be prepared for college,” says Sarah Jane Stout, a Charlotte-Mecklenburg high school student. “I learned about the importance of savings and earning interest. Saving for college and graduate school seemed like a daunting task, but the program broke it down into smaller steps.” Truist Financial Foundations has reached students in 15 states and Washington, D.C. Participants who complete the program are entered in a drawing for three scholarships worth $5,000. Bridging the digital divide during COVID-19 Home Page Program provided critical technology support for K-12 students learning from home during the pandemic. As part of our commitment to education, Truist partnered with Hotwire and Dell to create The Home Page Program, a program providing laptops, high-speed internet access, and ongoing support for students and families learning virtually during the pandemic. As schools moved to virtual education, children from low-income families without high-speed internet access or technology were at risk of falling behind. More than 2,100 students in North Carolina, Florida, and Pennsylvania received backpacks that each contained a laptop, a notebook, headphones, and other school supplies. They also received access to a website with school resources and digital activities to encourage learning, such as our innovative WORD Force literacy game. Closing the racial gap in education 2020 efforts included $250K amount donated to start a Charlotte chapter of Black Girls CODE, a national program devoted to getting more girls of color started in technology careers $20MM for the support of historically black colleges and universities over three years 22 One team helping clients succeed Across Truist, teammates are working together to deliver on the promise of our historic merger of equals: a main street bank, deeply embedded in our communities, offering a complete range of financial services to individuals and businesses. We’re also investing in innovation and technology to meet our clients’ expectations wherever and whenever they want to do business. 23 Putting the promise of touch and technology into action Integrated Relationship Management (IRM) is a framework for amplifying what Truist does best to provide even greater value to all clients. When Truist was formed in late 2019, we said we’d create value by combining our distinctive client-focused banking experiences with greater investments in technology and a stronger mix of financial services offerings. We call this approach “T3”—touch integrated with technology equals trust. We are confident in this strategy because it builds on Truist strengths, including: • The No. 1-ranked mobile banking app • Industry-leading client service • Differentiated offerings, including Truist Securities, Truist Insurance Holdings, and the Truist Leadership Institute IRM is a framework for putting T3 into practice across Truist— through all our lines of business and for all our clients. IRM makes explicit how we set ourselves apart in the market, how we earn client loyalty, and how we grow revenue. IRM makes explicit how we set ourselves apart in the market, how we earn client loyalty, and how we grow revenue. It puts client needs at the center of everything we do and drives us to provide the high-quality client service, innovative technology, and unique experiences. For our teammates, it guides how they’ll work together to meet client needs—educating clients and providing strategic advice to help them achieve business and financial goals. This can be as simple as connecting a retail banking client to a mortgage loan officer, or as complex as helping a middle market company raise capital. For clients, IRM makes us different from other financial services providers. While many firms offer banking, capital markets services, and insurance, for example, few offer all of them. And even fewer can deliver them with both cutting-edge technology and personalized service. IRM grows revenue by focusing teammates on building close relationships with clients, understanding their goals and needs, and offering access to specialized knowledge, services, and products that best meet their needs—even if it’s a need they haven’t yet realized. It’s not about selling—it’s about bringing together a mix of people, products, and technology that leads clients to recognize Truist as the best-positioned financial services provider to help them achieve their goals. 24 Responding with innovation When the pandemic forced business closures and stay-at-home restrictions, we responded by accelerating digital innovation for the benefit of our clients. Creating a digital portal for PPP loan applications in just a few days Off ering callbacks and branch appointments so clients could connect with teammates Launching a payment relief chatbot to answer questions about mortgages, credit cards, and personal loans Automating the mortgage forbearance process with an online form Expanding electronic signature use Increasing mobile deposit limits Reimagining the banking experience The new Truist Innovation and Technology Center (ITC) will be the nexus of innovation as we develop a new generation of client-centered financial services and products. The ITC in Charlotte is where we will invest in and reinvent the client experience. This 106,000-square-foot facility—almost as large as two football fields—will be the bustling heart of innovation at Truist. Teammates with a variety of skills and backgrounds—experience designers, data analysts, software engineers, behavioral scientists, product managers, researchers, fintech experts, and others—will work together leveraging methodologies such as design thinking to create new and exciting financial services and experiences. The space is designed to encourage creativity through collaboration. Guided by the principles of technology, touch, and trust, the workplace is a collection of spaces that enable teammates to connect, thrive, and grow in a captivating and distinct environment. Clients will also play an integral role in the experience design process, becoming collaborators in creating the products and services they need to manage their financial needs. We also envision the ITC as a place where Truist can share thought leadership, and partner with university students and faculty, fintech entrepreneurs, and technology companies. 25 Becoming Truist Key accomplishments reinforce new brand, strengthen culture, and position company for success. We made significant progress this year on our historic merger of equals—unveiling a vibrant brand, strengthening our retail presence, and positioning Truist for continued growth. These include Truist Park, home of the Atlanta Braves, plus sponsorships of minor league ballparks, university facilities, and entertainment venues. We began 2020 by introducing our purpose, mission, and values. Remarkably, 97% of our teammates say our purpose resonates with them personally. Less than two weeks into the year, we launched the Truist brand. This included our new visual identity, brand voice, and logo. We also completed major brand conversions across the organization. The Truist Foundation, Truist Momentum program, Truist Securities, Truist Insurance, and Truist Leadership Institute now carry new identities. We completed our branch divestiture plan, while also implementing a blended branch program to guide clients through the transition and move toward branch consolidations—a key element of the cost savings plan we announced with the merger. This year and next, we will continue to convert legacy BB&T and SunTrust branches to the new Truist brand. This will include new signage and other elements. We anticipate branch conversions will be completed in 2022. We launched 11 sponsorships of key venues in communities throughout our service area. Our ability to attract and retain top-tier talent is a critical element of our business strategy. To facilitate those eff orts, we integrated the Workday talent management system and launched our Total Rewards program, the Teammate Learning Experience, and Truist Job Architecture model. We purchased Truist Center, our corporate headquarters building in Uptown Charlotte. This building will bring together executive leaders as well as teammates from across the company. Though the pandemic has changed the way we work, the ability to work closely together is still crucial; our new headquarters will safely facilitate those collaborations. Technology and innovation will be at the heart of financial services now and in the future, and our new Innovation and Technology Center (see Page 25) will be at the heart of that eff ort. In 2020 we launched Truist Ventures to invest in and partner with innovative fintech companies. Truist Ventures is one of several initiatives designed to ensure we’re developing the products, services, and experiences that position us to compete in a dynamic financial services marketplace. Nurturing hope and resilience Truist helps historic museum and gardens provide visitors a respite during troubled times. In March 2020, Cheekwood Estate & Gardens in Nashville, Tennessee, was forced to close due to COVID-19. But with help from a PPP loan from Truist, Cheekwood was able to prepare to re-open with new health and safety protocols. Since being converted into a museum of art and botanical garden in 1960, the turn-of-the-century mansion and estate has presented world-class art exhibitions, programming for all ages, and spectacular gardens. Each year, Cheekwood welcomes over 225,000 visitors, making it one of Nashville’s top cultural attractions. “Cheekwood is an escape,” says Jane MacLeod, president and CEO. “We are a place to renew your mind, body, and spirit. Whether you’re a lover of arts, gardens, or history, we really have it all.” Truist has been a partner with Cheekwood through good times and bad, says MacLeod. “We were successfully able to receive funds that enabled us to [avoid furloughing] any of our full-time staff,” MacLeod says. Cheekwood followed CDC and local government guidelines— requiring face masks indoors and social distancing—allowing it to safely reopen. The support during the pandemic has enabled the estate to provide visitors a needed respite from the uncertainty of 2020. “In times like this, Cheekwood has never served this community better,” she says. “You can come out to Cheekwood and things seem a little more normal. And I think people need that.” “ We will be resilient; we will be creative.” — Jane MacLeod, president and CEO, Cheekwood Estate & Gardens 27 “ It’s refreshing to have that level of immediate communication and feedback from a bank.” — Jed Gray, general manager Winery navigates pandemic challenges with creativity When COVID-19 forced a winery to close for nearly two months during its busiest time of year, Truist provided a financial lifeline so the business could adapt to new restrictions and a slowing economy. In March 2020, Virginia Gov. Ralph Northam ordered all restaurants and hospitality facilities in the state to close as part of an effort to slow the spread of COVID-19. Truist immediately stepped in to help the company weather the downtime and slowing economy with a quick-turn $50,000 loan, deferments, and help securing a large PPP loan. That meant that Greenhill Winery & Vineyards in Middleburg, Virginia, had to close its front-of-house operation for seven weeks during a time of year that is traditionally one of its busiest. “Before COVID hit, we had very robust traffic seven days a week,” says General Manager Jed Gray. The working-farm winery is a popular destination for locals and tourists and it relies primarily on in-person events and tastings to drive sales, as it doesn’t distribute its wines through other sellers. Besides wine, it also sells beef from cattle raised on the property and honey from its apiaries. Greenhill also employs more than a dozen people and is an important part of Middleburg’s business community. “The loan gave us the ability to hold onto staff, keep moving forward with the business, and ultimately grow as the year progressed,” Gray says. Greenhill was able to partially open May 29, and then fully reopen July 1. And even then, safety measures have changed the way the winery operates. Greenhill has built new outdoor facilities, adding firepits and outdoor heaters, so it can more easily host socially distanced events. It has also looked for creative new ways to promote itself. Truist has hosted virtual wine tastings for its clients, in partnership with Greenhill, bringing income and visibility to the winery. 28 One team helping clients succeed Supporting peace of mind for essential workers and their pets Truist helps the furry friends of those on the front line by providing financial support for a vital dog daycare and boarding business. The COVID-19 pandemic affected everyone, including vital workers responsible for health, safety, and security in Northern Virginia and the capital region. It also affected their families, and their pets. Charlie Richardson, owner of A Dog’s Day Out, kept his business open because he knew important people were counting on the daycare and boarding services for their dogs. “A lot of our customers are EMS personnel, they are nurses, they are military,” he says. “ Truist has been an essential part of our survival.” — Charlie Richardson, co-owner, A Dog’s Day Out “It’s important that they have peace of mind, that their dogs are being cared for,” adds Charlie’s daughter Nicole, who co-owns the business. The business is an important part of the community of Northern Virginia, giving dogs love and attention while their owners are on the front lines. “It’s a true joy to be with the dogs,” says Charlie. “They are always happy to see you. The tails are always wagging. They just fill your heart.” But the decision to stay open during the pandemic and the related economic crisis came with sacrifice. The Richardson family turned to Truist for a PPP loan to keep their business, and its essential services, going. “My father’s blood, sweat, and tears went to save up the money to start this business,” says Nicole. “It was really important to us that it didn’t fail because of COVID.” Ensuring that businesses like A Dog’s Day Out continue to operate was a strategic priority for Truist in 2020. “Truist has been an essential part of our survival,” says Charlie. “It’s so fun to see my father in there with the dogs,” says Nicole, “being covered with kisses and all the love and joy that he deserves.” 29 Truist Leadership Institute Self-Care for Healers The goal of this Truist Leadership Institute podcast? To give healthcare professionals insight, encouragement, and leadership coaching in the face of the pandemic. Throughout the coronavirus pandemic, we have all heard about the valiant efforts made by healthcare workers who risked their lives as they dealt with a lack of supplies, long hours, and gut-wrenching experiences with the patients in their care. The consultants at Truist Leadership Institute decided they wanted to use their knowledge to help these workers. Less than 24 hours later, they launched a new podcast: “Self-Care for Healers.” In five-minute episodes, Leadership Institute consultants provide a message to help health- care professionals “feel better, lead better, treat better.” Each episode takes a psychology-based approach to leadership development and frames it with anecdotes and actionable takeaways for healthcare professionals. The hope is that material provides insight into why certain feelings, emotions, responses, or behaviors manifest, as well as effective responses individuals can consider. “This podcast is based on our passion for the healthcare industry and the incredible, heroic work these folks are doing,” says podcast host Anna Slaydon. “We’ve gotten a lot of great responses from it. I spoke with a healthcare worker who said, ‘I started listening to this podcast, and now I listen to it every day because it feels like my lifeline.’” “Self-Care for Healers” is available on Stitcher, Apple Podcasts, Spotify, and Google Podcasts. Developing future leaders in new ways The pandemic changed life at institutions of higher learning—and Truist Leadership Institute quickly adapted to maintain connections to student leaders. Truist Leadership Institute’s Emerging Leaders Certification (ELC) program is built around in-person sessions held with students at colleges and universities across the Truist footprint. (The program is considered an in-kind gift to each institution valued at $500 per student certified.) To date, more than 11,000 college students have taken the six-hour course, in which they acknowledge their strengths and motivators and become equipped with the tools they need to lead others effectively. When the COVID-19 pandemic shuttered college and universi- ty campuses, the team at the Leadership Institute quickly—in a matter of weeks—turned that powerful in-person program into a real-time online learning experience. And the results speak for themselves. Between April and June, we certified nearly 600 students using the virtual format. By keeping the sessions live and in real-time, students still experience the interactive nature of the program and the important discussions that are part of the program’s success. Participants and educators say the change to online learning was seamless and that the format change even helped some more reserved participants feel heard. The program remained virtual through the 2020–2021 academic year as pandemic-related challenges continued. What the Leadership Institute has learned as a result will broaden the opportunities for the program even after the pandemic ends. 73 virtual Student Leadership Programs as part of COVID-19 response 2,560 total students certified in 2020 81 college and university partners $1.3MM gift in-kind for ELC in 2020 30 Executive leadership team Kelly S. King Chairman and Chief Executive Off icer William H. Rogers Jr. President and Chief Operating Off icer Daryl N. Bible Chief Financial Off icer Scott Case Chief Information Off icer Hugh S. “Beau” Cummins III Head of the Corporate and Institutional Group Ellen M. Fitzsimmons Chief Legal Off icer and Head of Enterprise Diversity Christopher L. Henson Head of Banking and Insurance Mike Maguire Head of National Consumer Finance and Payments Kimberly Moore-Wright Chief Human Resources Off icer Brant J. Standridge Head of Retail Community Banking Clarke R. Starnes III Chief Risk Off icer Joseph M. Thompson Head of Truist Wealth David H. Weaver Head of Commercial Community Banking Dontá L. Wilson Chief Digital and Client Experience Off icer 31 (Picture taken January 2020) Seated (L to R): Anna R. Cablik, Patrick C. Graney III, Donna S. Morea, Frank P. Scruggs Jr., Nido R. Qubein Standing (L to R): Dallas S. Clement, Charles A. Patton, Jennifer S. Banner, Thomas E. Skains, Agnes Bundy Scanlan, Easter A. Maynard, Bruce L. Tanner, William H. “Bill” Rogers Jr., Kelly S. King, Christine Sears, Paul R. Garcia, Steven C. Voorhees, Linnie M. Haynesworth, David M. Ratcliffe, Paul D. Donahue, K. David Boyer Jr., Thomas N. Thompson Board of directors Kelly S. King Chairman and Chief Executive Officer, Paul D. Donahue Chairman and Chief Executive Officer, Truist Genuine Parts Company David M. Ratcliffe Retired Chairman, President, and Chief Executive Officer, Southern Company William H. Rogers Jr. President and Chief Operating Officer, Paul R. Garcia Retired Chairman and Chief Executive Frank P. Scruggs Jr. Principal, Frank Scruggs P.A. Truist Officer, Global Payments Inc. Jennifer S. Banner Executive Director at the University of Tennessee Haslam College of Business, Forum for Emerging Enterprises and Private Business K. David Boyer Jr. Chief Executive Officer, GlobalWatch Technologies Inc. Agnes Bundy Scanlan President, Cambridge Group LLC Anna R. Cablik President, Anasteel & Supply Company LLC Dallas S. Clement Executive Vice President and Chief Financial Officer, Cox Enterprises Patrick C. Graney III President, PCG Inc. Linnie M. Haynesworth Retired Sector Vice President and General Manager, Northrop Grumman Corporation Easter A. Maynard Director of Community Investment, Christine Sears Retired Chief Executive Officer, Penn National Insurance Thomas E. Skains Retired CEO, Piedmont Natural Gas Company Inc. Bruce L. Tanner Retired Executive Vice President and Chief Financial Officer, Investors Management Corporation Lockheed Martin Corporation Donna S. Morea Chief Executive Officer, Adesso Group, LLC Charles A. Patton Manager, Patton Holdings LLC Nido R. Qubein President, High Point University Thomas N. Thompson President, Thompson Homes Inc. Steven C. Voorhees President and Chief Executive Officer, WestRock 32 Shareholder information Corporate headquarters Truist Financial Corporation 214 N. Tryon Street Charlotte, NC 28202 Website To �ind the latest information about Truist, go to Truist.com. Please visit the Newsroom section for news releases or the Investors section for �inancial information, governance and responsibility practices, or to access this report online. SEC filings Truist Financial Corporation �iles required reports with the Securities and Exchange Commission each year. Copies of these reports may be obtained upon written request to: Daryl N. Bible Senior Executive Vice President and Chief Financial O� icer Truist Financial Corporation 214 N. Tryon Street Charlotte, NC 28202 Transfer agent Computershare Trust Company, N.A. P.O. Box 505005 Louisville, KY 40233 800-213-4314 Shareholder services Shareholders seeking information regarding transfer instructions, dividends, lost certi�icates or other general information should write or call: Computershare Trust Company N.A. P.O. Box 505005 Louisville, KY 40233 800-213-4314 Address changes, reprinting of tax information and account information may be directly accessed through the Computershare website using Investor Center: www.Computershare.com/investor Stock Exchange and Trading Symbol The common stock of Truist Financial Corporation is traded on the New York Stock Exchange under the ticker symbol TFC. Direct Stock Purchase and Dividend Reinvestment Plan The Direct Stock Purchase and Dividend Reinvestment Plan off ers prospective and current shareholders the opportunity to aff ordably obtain Truist common shares. Shareholders may reinvest dividends, purchase additional shares and sell shares on a regular basis. For more information, contact Computershare at 800-213-4314. Media News media seeking information should contact: Media@Truist.com Analysts Analysts, investors, and others seeking additional �inancial information should contact: Ryan Richards Executive Vice President Director of Investor Relations 980-465-5000 Ryan.Richards@Truist.com or Investors@ Truist.com Clients Clients seeking assistance with BB&T products and services should call 800-BANK BBT (800-226-5228) or visit BBT.com. Clients seeking assistance with SunTrust products and services should call 800 SunTrust (800- 786-8787) or visit SunTrust.com. Peer comparisons The peer data re�lected here includes: Bank of America Corporation, Citizens Financial Group, Inc., Fifth Third Bancorp, JPMorgan Chase & Co., KeyCorp, M&T Bank Corporation, The PNC Financial Services Group, Inc., Regions Financial Corporation, U.S. Bancorp, and Wells Fargo & Company. About Truist Truist Financial Corporation is a purpose- driven �inancial services company committed to inspire and build better lives and communities. With the combined history of BB&T and SunTrust, Truist has leading market share in many high-growth markets in the country. The company off ers a wide range of services including retail, small business and commercial banking; asset management; capital markets; commercial real estate; corporate and institutional banking; insurance; mortgage; payments; specialized lending; and wealth management. 33 Headquartered in Charlotte, North Carolina, Truist is the sixth-largest commercial bank in the U.S. with total assets of $509 billion as of December 31, 2020. Truist Bank, Member FDIC. Learn more at Truist.com. potentially negative interest rates, which could adversely aff ect Truist’s revenue and expenses, the value of assets and obligations, and the availability and cost of capital, cash �lows, and liquidity; Forward-looking statements This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, regarding the �inancial condition, results of operations, business plans and the future performance of Truist. Words such as “anticipates,” “believes,” “estimates,” “expects, “forecasts,” “intends,” “plans,” “projects,” “may,” “will,” “should,” “would,” “could” and other similar expressions are intended to identify these forward-looking statements. Forward-looking statements are not based on historical facts but instead represent management’s expectations and assumptions regarding Truist’s business, the economy and other future conditions. Such statements involve inherent uncertainties, risks and changes in circumstances that are di� icult to predict. As such, Truist’s actual results may diff er materially from those contemplated by forward-looking statements. While there can be no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to diff er materially from those contemplated by forward-looking statements include the following, without limitation, as well as the risks and uncertainties more fully discussed under Item 1A-Risk Factors in our Annual Report on Form 10-K for the year ended Dec. 31, 2020 and in Truist’s subsequent �ilings with the Securities and Exchange Commission: • risks and uncertainties relating to the Merger of BB&T and SunTrust, including the ability to successfully integrate the companies or to realize the anticipated bene�its of the Merger; • expenses relating to the Merger and integration of heritage BB&T and heritage SunTrust; • deposit attrition, client loss or revenue loss following completed mergers or acquisitions may be greater than anticipated; • the COVID-19 pandemic has disrupted the global economy, adversely impacted Truist’s �inancial condition and results of operations, including through increased expenses, reduced fee income and net interest margin and increases in the allowance for credit losses, and continuation of current conditions could worsen these impacts and also adversely aff ect Truist’s capital and liquidity position or cost of capital, impair the ability of borrowers to repay outstanding loans, cause an out�low of deposits, and impair goodwill or other assets; • Truist is subject to credit risk by lending or committing to lend money and may have more credit risk and higher credit losses to the extent that loans are concentrated by loan type, industry segment, borrower type or location of the borrower or collateral; • changes in the interest rate environment, including the replacement of LIBOR as an interest rate benchmark and • inability to access short-term funding or liquidity, loss of client deposits or changes in Truist’s credit ratings, which could increase the cost of funding or limit access to capital markets; • risk management oversight functions may not identify or address risks adequately, and management may not be able to eff ectively manage credit risk; • risks resulting from the extensive use of models in Truist’s business, which may impact decisions made by management and regulators; • failure to execute on strategic or operational plans, including the ability to successfully complete or integrate mergers and acquisitions; • increased competition, including from new or existing competitors that could have greater �inancial resources or be subject to diff erent regulatory standards, and from products and services off ered by non-bank �inancial technology companies, may reduce Truist’s client base, cause Truist to lower prices for its products and services in order to maintain market share, or otherwise adversely impact Truist’s businesses or results of operations; • failure to maintain or enhance Truist’s competitive position with respect to new products, services and technology, whether it fails to anticipate client expectations or because its technological developments fail to perform as desired or do not achieve market acceptance or regulatory approval or for other reasons, may cause Truist to lose market share or incur additional expense; • negative public opinion, which could damage Truist’s reputation; • increased scrutiny regarding Truist’s consumer sales practices, training practices, incentive compensation design and governance; • regulatory matters, litigation or other legal actions, which may result in, among other things, costs, �ines, penalties, restrictions on Truist’s business activities, reputational harm, negative publicity or other adverse consequences; • evolving legislative, accounting and regulatory standards, including with respect to capital and liquidity requirements, and results of regulatory examinations may adversely aff ect Truist’s �inancial condition and results of operations; • the monetary and �iscal policies of the federal government and its agencies could have a material adverse eff ect on pro�itability; • accounting policies and processes require management to make estimates about matters that are uncertain, including the potential write down to goodwill if there is an elongated period of decline in market value for Truist’s stock and adverse economic conditions are sustained over a period of time; • general economic or business conditions, either globally, nationally or regionally, may be less favorable than expected, and instability in global geopolitical matters or volatility in �inancial markets could result in, among other things, slower deposit or asset growth, a deterioration in credit quality or a reduced demand for credit, insurance or other services; • risks related to originating and selling mortgages, including repurchase and indemnity demands from purchasers related to representations and warranties on loans sold, which could result in an increase in the amount of losses for loan repurchases; • risks relating to Truist’s role as a loan servicer, including an increase in the scope or costs of the services Truist is required to perform without any corresponding increase in servicing fees, or a breach of Truist’s obligations as servicer; • Truist’s success depends on hiring and retaining key personnel, and if these individuals leave or change roles without eff ective replacements, Truist’s operations and integration activities could be adversely impacted, which could be exacerbated as Truist continues to integrate the management teams of heritage BB&T and heritage SunTrust; • fraud or misconduct by internal or external parties, which Truist may not be able to prevent, detect or mitigate; • security risks, including denial of service attacks, hacking, social engineering attacks targeting Truist’s teammates and clients, malware intrusion, data corruption attempts, system breaches, cyber-attacks and identity theft, could result in the disclosure of con�idential information, adversely aff ect Truist’s business or reputation or create signi�icant legal or �inancial exposure; and • widespread outages of operational, communication or other systems, whether internal or provided by third parties, and natural or other disasters (including acts of terrorism and pandemics) and the eff ects of climate change could have an adverse eff ect on Truist’s �inancial condition and results of operations, or lead to material disruption of Truist’s operations or the ability or willingness of clients to access Truist’s products and services. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Except to the extent required by applicable law or regulation, Truist undertakes no obligation to revise or update any forward- looking statements. About the report This annual report contains �inancial information and performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP). Truist’s management uses these non-GAAP measures in their analysis of the Corporation’s performance and the e� iciency of its operations. Management believes these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results with prior periods and demonstrate the eff ects of signi�icant items in the current period. The Corporation believes a meaningful analysis of its �inancial performance requires an understanding of the factors underlying that performance. Truist’s management believes investors may �ind these non-GAAP �inancial measures useful. These disclosures should not be viewed as a substitute for �inancial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Below is a listing of the types of non-GAAP measures used in this annual report: • The adjusted e� iciency ratio is non-GAAP in that it excludes securities gains (losses), amortization of intangible assets, merger- related and restructuring charges and other selected items. Truist’s management uses this measure in their analysis of the Corporation’s performance. Truist’s management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the eff ects of signi�icant gains and charges. • Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets, net of deferred taxes and their related amortization. These measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Truist’s management uses these measures to assess the quality of capital and returns relative to balance sheet risk and believes investors may �ind them useful in their analysis of the Corporation. • The adjusted diluted earnings per share is non-GAAP in that it excludes merger- related and restructuring charges and other selected items, net of tax. Truist’s management uses this measure in their analysis of the Corporation’s performance. Truist’s management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the eff ects of signi�icant gains and charges. • The adjusted performance ratios, including adjusted return on average assets and adjusted return on average tangible common shareholders’ equity, are non-GAAP in that they exclude merger-related and restructuring charges, selected items and, in the case of return on average tangible common shareholders’ equity, amortization of intangible assets. Truist’s management uses these measures in their analysis of the Corporation’s performance. Truist’s management believes these measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods, as well as demonstrate the eff ects of signi�icant gains and charges. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included below. Non-GAAP Reconciliations Diluted EPS ($ MM, except per share data, shares in thousands) Net income available to common shareholders - GAAP $ Merger-related and restructuring charges Securities (gains) losses Loss on extinguishment of debt Incremental operating expenses related to the merger Charitable contribution Corporate advance write off (Gain) loss on loan portfolio sale Allowance release related to loan portfolio sale Net income available to common shareholders - adjusted $ Quarter Ended Dec. 31 2020 Sept. 30 2020 June 30 2020 March 31 2020 1,228 $ 237 — — 138 — — — — 1,603 $ 1,068 $ 181 (80) — 115 38 — — — 1,322 $ 902 $ 160 (230) 180 99 — — — — 1,111 $ 986 82 2 — 57 — — — — 1,127 Weighted average shares outstanding - diluted 1,361,763 1,358,122 1,355,834 1,357,545 0.73 Diluted EPS - GAAP Diluted EPS - adjusted(1) 0.83 (1) The adjusted diluted earnings per share is non-GAAP in that it excludes merger-related and restructuring charges and other selected items, net of tax. Truist's management uses this measure in their analysis of the Corporation's performance. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges. 0.90 $ 1.18 0.79 $ 0.97 0.67 $ 0.82 $ Non-GAAP Reconciliations Efficiency Ratio ($ MM) Efficiency ratio numerator - noninterest expense - GAAP $ Merger-related and restructuring charges, net Gain (loss) on early extinguishment of debt Incremental operating expense related to the merger Amortization of intangibles Charitable contribution Corporate advance write off Efficiency ratio numerator - adjusted Efficiency ratio denominator - revenue(1) - GAAP Taxable equivalent adjustment Securities (gains) losses (Gain) loss on loan portfolio sale Efficiency ratio denominator - adjusted $ $ $ Dec. 31 2020 Sept. 30 2020 Quarter Ended June 30 2020 Year-to-date March 31 2020 Dec. 31 2020 3,833 (308) — (179) (172) — — 3,174 5,651 28 — — 5,679 $ $ $ $ 3,755 (236) — (152) (170) (50) — 3,147 5,572 29 (104) — 5,497 $ $ $ $ 3,878 (209) (235) (129) (178) — — 3,127 5,871 31 (300) — 5,602 $ $ $ $ 3,431 (107) — (74) (165) — — 3,085 5,611 37 2 — 5,650 $ $ $ $ 14,897 (860) (235) (534) (685) (50) — 12,533 22,705 125 (402) — 22,428 65.6% 55.9 Efficiency ratio - GAAP Efficiency ratio - adjusted(2) (1) Revenue is defined as net interest income plus noninterest income. (2) The adjusted efficiency ratio is non-GAAP in that it excludes securities gains (losses), amortization of intangible assets, merger-related and 67.8% 55.9 67.4% 57.3 66.1% 55.8 61.1% 54.6 restructuring charges and other selected items. Truist's management uses this measure in their analysis of the Corporation's performance. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges. Performance Ratios ($ MM) Net income - GAAP Net income available to common shareholders - GAAP Merger-related and restructuring charges Securities gains (losses) Loss on extinguishment of debt Incremental operating expenses related to the merger Amortization Charitable contribution Numerator - adjusted(1) Average assets Average common shareholders' equity Plus: Estimated impact of adjustments on denominator Less: Average intangible assets, net of deferred taxes Year-to-Date Dec. 31 2020 Return on Average Assets Return on Average Common Equity Return on Average Tangible Common Shareholders’ Equity $ 4,492 660 (308) 180 409 - 38 5,471 499,085 - $ $ $ $ $ $ $ 4,184 660 (308) 180 409 - 38 5,163 $ 61,379 $ 396 - 61,775 $ 6.82% 8.36 4,184 660 (308) 180 409 524 38 5,687 61,379 396 (26,122) 35,653 13.35% 15.95 Denominator - adjusted(1) $ 499,085 Reported ratio Adjusted ratio 0.90% 1.10 (1) Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Truist's management uses these measures to assess the quality of capital and returns relative to balance sheet risk. These measures are not necessarily comparable to similar measures that may be presented by other companies. Non-GAAP Reconciliations Performance Ratios ($ MM) Net income - GAAP Net income available to common shareholders - GAAP Merger-related and restructuring charges Incremental operating expenses related to the merger Amortization Numerator - adjusted(1) Average assets Average common shareholders' equity Plus: Estimated impact of adjustments on denominator Less: Average intangible assets, net of deferred taxes Denominator - adjusted(1) Reported ratio Adjusted ratio Quarter Ended Dec. 31, 2020 Return on Average Assets Return on Average Common Shareholders’ Equity Return on Average Tangible Common Shareholders’ Equity2 $ $ $ $ $ $ $ $ 1,330 237 138 — 1,705 503,181 — — — 503,181 1.05% 1.35 $ $ $ $ 1,228 237 138 — 1,603 61,991 187 — 62,178 7.88% 10.25 1,228 237 138 131 1,734 61,991 187 25,930 36,248 14.99% 19.03 (1) Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Truist's management uses these measures to assess the quality of capital and returns relative to balance sheet risk. These measures are not necessarily comparable to similar measures that may be presented by other companies. 34 (2) Tangible common equity is a non-GAAP measure. © 2021 Truist Financial Corporation. BB&T, The Leadership Institute, SunTrust, onUp, Momentum onUp, Lightstream, Truist, Truist purple and the Truist logo are service marks of Truist Financial Corporation. C0001125064 

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