![]() ![]() Some of the innovative solutions ITC has developed or is improving include Truist Invest Pro, an investment service offering a combination of automated investing using algorithms and access to a team of financial advisors Truist Assist, a chatbot powered by advanced artificial intelligence technology Truist Digital Wallet, a mobile app that stores debit and credit cards, loyalty cards, and gift cards and a mobile banking app and online banking platform. The Truist Innovation and Technology Center (ITC) will also house a new emerging technologies program, a collaboration between its technology experts, Amazon's (NASDAQ: AMZN) AWS, Verizon (NYSE: VZ), and Unqork's Codeless as a Service platform. It opened a state-of-the-art innovation center in its home base of Charlotte, North Carolina, in 2021 to develop new products and services, improve existing ones, and better understand customer needs. The bank aims to become a fintech leader. The company focuses heavily on technology The company can now focus on execution, streamlining the business to boost profitability. First, the heavy lifting behind the merger is over management completed the integration of BB&T and Suntrust in the fourth quarter of 2022. However, investors have reasons to be optimistic about this company's future. Don't expect the stock to consistently outperform the market until it achieves better efficiency and profitability numbers. When the company missed analysts' expectations for earnings in the first quarter, many investors sold the stock. Several factors are to blame, including slower loan growth within the banking industry, increased competition from digital-only banks, and investor disappointment regarding its failure to quickly achieve integration, cost-saving, and profitability goals from the merger. Truist shares have fallen by about 30% since the BB&T and SunTrust merger closed. So why is its valuation still lingering near historic lows? Additionally, with inflation abating and the Federal Reserve slowing or pausing interest rate hikes, the likelihood that Truist will encounter similar stress is rapidly declining. As a result, the company has achieved lower CRE concentration and risk levels compared to its peers.Īlthough all banks bear some risk of failure, Truist is much more solid than the regional banks that collapsed this year. Truist now focuses on larger CRE with strong institutional sponsorship, and has reduced its exposure to smaller CRE. Management decided to slow CRE expansion after the merger of SunTrust and BB&T to maintain diversification benefits. Its strong brand, substantial market share of deposits in many of the fastest-growing markets in the U.S., diverse customer base, range of products and services, and robust financial performance give the bank a solid foundation to withstand most liquidity shocks.ĭuring the first-quarter earnings call the company's chief financial officer also took the time to address investor concerns regarding Truist's CRE portfolio. In contrast, as seen on the chart below, 63% of Truist's deposits insured, leaving only 37% uninsured.Īs of March 31, Truist had total deposits of $408 billion. Eventually, neither bank could meet their financial obligations, and regulators shut them down. As more and more depositors withdrew their cash, each bank's liquidity position deteriorated further. protection, and they quickly rushed to withdraw their money. When word got out that these banks' assets had lost significant value, depositors knew they could lose their funds without Federal Deposit Insurance Corp. S&P Global Market Intelligence reported that 93.8% of Silicon Valley Bank's and 89.3% of Signature Bank's deposits were uninsured at the end of 2022, which made both highly vulnerable to deposit runs. Truist hasn't experienced the issues that caused some banks to fail earlier this year, such as volatile and mostly uninsured deposit bases. When researching Truist, remember that not all banks are the same. Many value investors consider a P/B ratio below 1 as a sign of an undervalued banking stock. It now sells at a price-to-earnings (P/E) ratio of 7.4, well below its median P/E ratio for the last 10 years.Īs the chart below shows, its price-to-book (P/B) ratio is 0.79, well below those of its peers in the industry and less than the stated value of its assets. Wall Street's wariness toward banking stocks has reduced the valuation of Truist to enticing levels. However, despite concerns about regional banks, investors seeking to diversify their portfolio away from potentially overvalued technology stocks should consider putting some of their cash into Truist shares. ![]()
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