This earnings call will be brutal! What is the $6.1 BILLION goodwill impairment charge?
2024 Outlook:
Revenue down 1 to 3%
Adj Expenses flat to up 1%
NCOs up 15 bps from 2023
Billy has accomplished the impossible - he’s sailing this ship BACKWARDS!
HW was a tourist. 2 years of zero impact, an empty suit in the CISO chair. But then, that was exactly what Case was looking for, a CISO who wouldn't challenge the ever growing pipe of risk that is Truist:'s technology stack.
"A scenario where there are no cuts … or significantly delayed cuts, that would be a headwind for us," Maguire added.
More pain for this poorly run company when Fed delays rate cuts until third quarter.
HW stays two years. He checked all the boxes and had a tremendous background. Assuming he left of his own accord it is another indictment on EL. Oh well I’m certain there are other WF or BOA people who will be overpaid to jump on board. After all we’ve saved 300 mil in salary recently.
Well the CISO left today. Can't be good...
Bill’s plan is working, stock up 3 percent!
Bill’s plan is for Truist to only be worth 55% of its all time high?
Bill’s plan is working, stock up 3 percent!
You gotta love the spin on all these exclusions, one-time impacts, and non-core factors then say “underlying results were positive as our transformation into a simpler, more efficient and profitable company is well under way”.
Guess if we exclude the cost of our gas, food, taxes, insurance, and utilities we are doing well too…
The funny thing is Billy Bob said “you know” more than he said purpose.
It’s time for Bill to get RIF’d!
The merger was valued at $66B and this $6B bogey is a reflection of poor leadership at the C-suite level.
Also, $750 million in cuts I fear will be insufficient to generate meaningful operating leverage. Based upon Mike’s comments, any operating leverage in 2024 is dependent on rate cuts that drive loan demand. To be a top tier bank, rather than in almost last place, we need leadership that can deliver results when loan demand isn’t strong.
And Bill’s tone when addressing employees is disingenuous. He should let Beau or someone else do the talking.
$6.2 billion lost to prop up the egos of Kelly King and Bill Rogers. That’s sad.
@qxm+1qDPRYH7 I spoke with one of the Advisors I work with after he read the email. He said what you did. BB&T paid too much and now the “goodwill” of the brand is severely diminished and they had to take a writedown on how much Truist has done to destroy itself from within.
“Nothing to see here, we promise. Just move along”
Billy is banking’s Tow Mater. The World’s Best Backwards Driver.
@ocq+1qDPRYH7 Agreed. More work, less talk, and for the love of God, less LinkedIn pictures. The pictures aren't fooling anyone.
As long as Bill keeps doing what Vanguard and Blackrock say, he’ll be, you know, rich.
It’s surprising to me how so many people in the upper ranks are seemingly just talkers like professional politicians almost. More work less talk would be great.
During every call, those two respond to every question like I did back in college when I’d get called on and did not prepare..”that’s a good question, and one we think about a lot…” followed by a lot of nonsense
Come on Bill and Mike, you can’t BS a BSer
And on the topic of goodwill. it’s the accounting definition that BBT paid too much for STI. And the STI guys are delivering the news. Incredible
@zca+1qDPRYH7 If "you know" you know..
You know, you sort of said, hey, I assume it's sort of not just math, or maybe you said it is mathematical, and that's right. I mean, at the end of the day, we do an annual test for impairment. There are I mean thousands and thousands of factors that go into this work. There are customary evaluation approaches. You know, you evaluate each reporting unit. You know, if you think about it the factors that are significant that we cited in our prepared remarks is that you do have a very you know you've had degradation in operating conditions for the industry you had a significant decline in broadly speaking bank stock valuations, Truist market valuation at the time and we do this test as of a certain day each year.
And our next question comes from Ebrahim Poonawala with Bank of America. Please go ahead.
Ebrahim Poonawala
Hey, good morning. I guess, I just wanted to follow-up maybe Bill and Mike on the goodwill charge. I'm assuming it's more than a mathematical exercise and it's hard for me to imagine that higher rates are structurally bad for banking organizations with good deposit base, which is the case for Truist. So to some extent I guess the read-through is some of the deal synergies tied to the SunTrust BB&T merger no longer look as appealing as they did at the time of the deal announcement. One, is am I missing something there?
And secondly, Bill, just so you've talked about a bunch of strategic actions, is it fair for us to expect that if we look a year from now, we will see very clearly some of the synergies, be it in terms of market share gains, efficiency tied to the deal where investors can start getting on board with the franchise?
Mike Maguire
Yeah, I'll go on the first one. Ebrahim, thanks for the question. You know, you sort of said, hey, I assume it's sort of not just math, or maybe you said it is mathematical, and that's right. I mean, at the end of the day, we do an annual test for impairment. There are I mean thousands and thousands of factors that go into this work. There are customary evaluation approaches. You know, you evaluate each reporting unit. You know, if you think about it the factors that are significant that we cited in our prepared remarks is that you do have a very you know you've had degradation in operating conditions for the industry you had a significant decline in broadly speaking bank stock valuations, Truist market valuation at the time and we do this test as of a certain day each year. In our case, it's October 1.
So all those factors are considered and influence the outcome. But at the end of the day, the estimated fair value is below the carrying value, and that's the output. But again, just to reiterate this, absolutely zero impact to our financial condition or how we think about our opportunity or our strategy or what we're doing.
Bill Rogers
And it's just done by segment too, Mike.
Mike Maguire
Yes, that's right. You look at the various reporting segments, the reporting units for us, which are the consumer and wealth business, at least in ‘23, corporate and commercial, and then insurance.
Bill Rogers
And then on your second question, hopefully, what I was indicating is that process has started. So if you look at the net new account gains we're seeing, the growth in primacy accounts, the growth in market share and investment banking. So those things are actually underway and happening. I think they'll continue to accelerate, they'll continue to build, they'll continue to manifest, as you said, both on the revenue and both on the efficiency side. I think you actually pointed out, you know, you'll see both sides of that.
Ask former Colonial Bank employees what can happen to stock options and 401ks in a matter of months…
$38 going to be the high for the year Bill?? Ramp up those spans and layers. I'm trying to leave next year and need my RSUs higher
Apparently the SunTrust brand was EXTREMELY overvalued. Once the dust settled, it became obvious the acquired bank (SunTrust) was all smoke and mirrors. So much for that “equals” BS.
Goodwill is an intangible asset commonly associated with the purchase of one company by another. Specifically, goodwill is recorded in a situation in which the purchase price is higher than the net of the fair value of all identifiable tangible and intangible assets and liabilities assumed in the process of an acquisition. The value of a company’s brand name, solid customer base, good customer relations, good employee relations, and any patents or proprietary technology represent some examples of goodwill.
End of Bill Rogers? I wouldn’t bet on it. Don’t you get it yet. By BB&T paying more money yet ST got control, that was the plan all along. Rogers is just the puppet doing what he is told. Time to open your eyes to that.
Argentina’s President gave a great speech at the WEF yesterday where he told the truth (now how long he lasts is for another day), but it’s time open your eyes and see what is happening to our country and economy. Jamie Dimon goes rogue every now and then which he did telling the truth about our country from 2016-2020.
I love how even all the 'client talking points' we just received for the Goodwill Impairment write-down don't actually address what it is. Just says what it is 'not' and places all blame on the macroeconomy. Great lol.
Efficiency is bad? How is that possible when my dept scrapped our hBBT software, substituted the hST software and then spent a year and a multimillion dollar vendor contract to add back the functionality that hBBT already had.
Don't be fooled by the name! Non-cash goodwill impairment WILL hurt bank profits, investors, and even regulators. Oh, Billy! Uhmm, aaawww, uhmm, It’s not good regardless of how you try selling to Wall Street.
“So if this earnings report is so bad why is the stock price up?”
The above post didn’t age well. One can now ask, if the earnings report is so good why is the stock price DOWN?
@gyx+1qDPRYH7 So true lol. It was a tough listen.
The stock price is up because they told the analysts what they wanted to hear - that more layoffs are planned through Q3.
I’ve never heard so many ‘you knows’ in my life. This is a CEO?
Bill Rodgers is the worst ceo, his choices led to the need of cutting $750 MM in salaries yet he gave himself a raise and laid off branch employees a week before Christmas! What should be investigated is the unfair and bias incentive plans
So if this earnings report is so bad why is the stock price up?
If this charge off doesn’t cause shareholders to revolt and become activists nothing will. As stated below BBT shareholders were hosed at merger by significantly overpaying for Suntrust and then letting that management team take over running the company. Lunacy!
My only concern is that the statement below does not hold for AIP and other comp. If it doesn't impact the identified items, and the charge is outside of the avergae employees ability to impact, which it is, then it should not impact AIP or comp.
"The lender took a $6.1 billion non-cash goodwill impairment charge, which it said will not impact liquidity, common share dividend payouts and capital ratios."
The obvious answer is that BB&T paid $6.1 billion more than SunTrust was worth….the difference had to be written down. They can talk market influences all they want, but the bottom line is we were sold a bunch of hot air when it comes to the combined value of the two banks!
In any other company, a $6.1 billion dollar mistake would find the CEO and CFO looking for new jobs!
What you heard this morning was the fingernails of BillyBob scraping down the wall as he tries to hang on but has no net to fall into. The end is near for the worse bank CEO in the country! Goodbye and good riddance.
Since when is $6.1 Billion nothing and will have no impact???
And notice the “85% of conversations being completed with the automated assistant.” Cough, cough AI. Still don’t think AI is ultimately going to ki-l so many jobs around the world? The AI program didn’t get ki-led as someone commented recently. It is going strong.
I don’t usually write this bluntly, but this email is a bunch of pure BS. “No impact” on operations, service and teammates?! Are you joking?! And what the he!! Is a “non-cash, goodwill impairment charge of $6.1 BILLION?!”
Old Bill is sure doing his master’s bidding. Who is over in Davos?