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BB&T Corp (NYSE:BBT)
Q3 2019 Earnings Call
Oct 17, 2019, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings, ladies and gentlemen, and welcome to the BB&T Corporation October 17th Third Quarter 2019 Quarterly Earnings Conference. [Operator Instructions]

It is now my pleasure to introduce your host, Mr. Rich Baytosh, Director of Investor Relations for BB&T Corporation. Please go ahead.

Richard Baytosh -- Executive Vice President, Investor Relations

Thank you, John, and good morning everyone. Thanks to all of our listeners for joining us today. On today's call, we have Kelly King, our Chairman and Chief Executive Officer; Chris Henson, our President and Chief Operating Officer; and Daryl Bible, our Chief Financial Officer, who will review the results for the third quarter and provide some thoughts for the fourth quarter of 2019. We also have Clark Starnes, our Chief Risk Officer, participating in the Q&A session.

We will be referencing a slide presentation during the call. A copy of the presentation as well as our earnings release and supplemental financial information are available on the BB&T website.

Before we begin, let me remind you BB&T does not provide public earnings predictions or forecasts. However, there may be statements made during the course of this presentation that express management's intentions, beliefs or expectations. BB&T's actual results may differ materially from those contemplated by these forward-looking statements. In addition, in connection with the proposed merger with SunTrust, BB&T has filed with the SEC a registration statement on Form S-4 to register the shares of BB&T's capital stock to be issued in connection with the merger, which contains a joint proxy statement prospectus that has been sent to the shareholders of BB&T and SunTrust.

Please refer to the cautionary statements on Page 2, regarding forward-looking information in our presentation, our SEC filings, and the legends on Page 3 that relate to additional information and participants in the solicitation. Please also note that our presentation includes certain non-GAAP disclosures. Please refer to Page 2 and the appendix of our presentation for the appropriate reconciliations to GAAP.

And now, I will turn it over to Kelly .

Kelly S. King -- Chairman and Chief Executive Officer

Thank you, Rich. Good morning everybody and thanks for joining our call. This is really a very strong quarter for BB&T, especially when you look at the amount of work and effort that is going in to preparing for our MOE with SunTrust which is going very well and I'll talk about in a bit.

It was another quarter that was driven strongly by our non-interest income. Loan growth is very strong, ex the $4.3 billion on a mortgage sale, which we'll talk about a little bit later. We make excellent progress on our MOE with SunTrust and I'll talk more about that in a bit.

Just looking at some of the numbers, our adjusted net income was $832 million, up 3.7% versus common quarter. Diluted EPS on an adjusted basis was $1.07, up 3.9% versus common quarter. And very respectable returns on an adjusted basis ROA, ROCE and ROTCE respectively were 1.5%, 11.36% and 18.07%. Our taxable equivalent revenue was at $3 billion, up 2.5% versus third quarter.

Our fee income was very good, $1.3 billion, up $64 million or 5.2%, which is significantly better than than our earlier guidance. It was driven by mortgage banking which was up 42%. Insurance is really outperforming, up organically 8.7% versus third quarter of '18, Chris is going to give you more color on that in a bit. And also our investment banking and brokerage were up 12% on a like quarter basis.

So loans held for investments were actually down 4.8%, but again, if you exclude this $4.3 million on a mortgage sale, we're up 6.5%, which was over our guidance. Daryl can give you more detail if you have questions, but the $4.3 billion mortgage sale was simply purchase loans that we have purchased at a premium, they were paying off at an accelerated rate, it makes sense for us to effectively redeem those or pay -- sell those and it improved our rate positioning going forward.

Our reported NIM decreased 5 basis points to 3.37%; core NIM decreased also 5 basis points. But if you exclude the loan sale, reported and core NIM only decreased 2 basis points and again Daryl is going to give you a lot of color with regard to that. Our adjusted efficiency ratio was 57.1%, down slightly from 57.3% on a common quarter. Expenses reflect higher incentives and commissions versus third quarter '18 due to the improved performance in insurance mortgage banking and investment banking and brokerage.

Credit quality was really strong. We will answer questions about that, but across the board, credit quality continues to be very, very strong. We did have some strategic activity during the quarter. We redeemed $1.7 billion of preferred stock and replaced it with a like amount at a lower cost, which is just an economic transaction. We did sell the $4.3 billion I just talked about. We did increase our dividend 11.1% at July meeting, which is a very, very healthy 3-plus percent dividend yield.

We also did receive shareholder approval, which is a nearly unanimous, BB&T and SunTrust on the merger and on the name. And we have talked about -- and we have named 75% of our Truist leaders. I'm going to give you a lot more detail in just a minute about the overall really positive progress that we've made with regard to the upcoming merger.

If you follow along on Page 5, on the selected items, just to call these out. As I said, we had preferred stock redemption where we were covering the expense of the capitalized insurance -- issuance cost that was $46 million pre-tax and after-tax, $0.06 a share, a negative hit. Incremental operating expenses related to the merger was $40 million after-tax, that was $0.05 negative hit. Merger-related and restructuring charges of $26 million after, which is $0.03. Now on the positive side, we did have a gain on the impact of the mortgage sale, that was the positive $0.02. So when you net that out, we had a negative impact on EPS of $0.12 for the quarter.

So if you want to take a look at the next slide, Slide 6 on loan growth. I feel really good about loan growth. If you look at the underlying performance, again ex the mortgage sale, we had 6.5% annualized, which is very strong, I think relative to what's going on in marketplace, what's happening with a lot of our competitors. Very pleased with C&I, was up 7.6% third quarter to second quarter annualized. We did have a very low performance in CRE, very much by design, as we talked to you last couple of quarters we've been dialing back because we see some fluffiness in some of the CRE categories, and so we're being careful about that.

But if you look on the table, I won't go through all of them. If you look on the table on Page 6, you will see that the C&I performance was really broad based across 8 or 10 different categories. So it's not just a one-off type of loan category performance. It is really, really broad based and that's very, very good. Our mortgage loan by the way did very well, they were up 7.4% versus second quarter once you exclude the sale.

So just talking a little bit about what's going on in the marketplace. As all of you I'm sure know it's difficult to figure out what's going on with all of the conversation, much of the rhetoric, but what I tried to do is just talk to our people, talk to clients and see what's going on. The fact is today, as I just indicated, our clients are still borrowing. They still feel basically confident. Our production and our pipelines are very strong. But I will tell you that there is more conversation going on today about concerns about the trade wars, it is beginning to create a level of uncertainty.

And even though the commodity is still strong today, over time uncertainty will begin to integrate in terms of negative impact in the economy. We saw some negative retail sales yesterday. Is that a one-off? We just don't know. I personally think it is challenging for all of us to be calm right now, not try to draw a huge conclusions of individual anecdotes to pop up every day or sometimes multiple times during the day. It's better in my view to back away and take a long view. And the truth is, the long view of the US economy today is very strong.

We do have these clouds around the globe, in terms of Brexit, although there was some potential positive good news out of that this morning. I personally think we will have a reasonable trade deal with China by the end of the year. I personally think we will have the new NAFTA approved and we will head into 2020 with substantially better sense of feeling of confidence than we have today. But I could be wrong and that's why we've been very cautious in terms of everything we do, in terms of capital liquidity and diversification, because we simply are in an environment where to place a high bet on any one scenario up or down is not a smart bet. So we've been cautious. We're basically guiding to neutral, with a slight psychological attempt toward the upside which we think will serve us well.

If you look at Page 7, on deposits, I was very pleased with deposits. Obviously, this is kind of the big story today. How we all react to the substantial decline in the long and the potentially inverted yield curve, back and forth kind of every day. It's very challenging for everybody. We are doing very well. Our total deposits third to second are up 5.2%. We are managing the categories, like for example, our non-interest bearing deposits are down 1.4%, that's kind of the normal kind of disintermediation that's going on across the industry today. The 1.4% is really pretty low in that environment. Our money market and savings were up 9.6%. So that's looking very good. So we've seen some movement in the categories, but when you get through that 5.2% is a very, very strong. We see a little movement in our mix, but our non-interest bearing deposits are holding strong.

Our client deposits relative to national market funding actually increased 3.6% annualized versus to second quarter of '19. Our cost of interest bearing deposits was 0.99%, down 3 basis points versus second quarter. And cost of total deposits was 0.67%, down 1 basis point. So really good management there by Daryl and Donna and all of our people in Treasury. So I feel very, very good about that. It will be problematic, as we go forward, if we have some substantial spike down or up, we are not actually expecting that. We're planning to be relatively neutral going forward, but with a psychological little bit up.

And with that, let me pass it over to Daryl.

Daryl N. Bible -- Senior Executive Vice President and Chief Financial Officer

Thank you, Kelly, and good morning everyone. Today, I'm going to talk about our excellent asset quality, margin dynamics, solid fee income, expenses, and provide guidance for the fourth quarter.

Turning to Slide 8. Asset quality remains excellent. Net charge-offs were $153 million, up 3 basis points as a percentage of average loans. This was largely due to indirect loan seasonality and the resolution of a commercial credit. Our non-performing asset ratio was 22 basis points and is better than the previous we've seen in 2006.

Continuing on Slide 9. Our allowance coverage ratios remain strong. The allowance ratio was primarily impacted by the sale of $4.3 billion of residential mortgage loans and the resolution of a commercial credit which lowered the reserve for unfunded commitments. Including these one-time items, the allowance to loan ratio remained at 1.05%. The provision was $117 million, below net charge-offs of $153 million.

Turning to Slide 10. The reported net interest margin decreased 2 basis points after adjusting for the sale of residential mortgage loans and related reinvestments. You might recall that the timing differences between the settlement of the mortgage sale and the securities reinvestment temporarily increased earning assets by about $2 billion and impacted the margin by 3 basis points. Excluding these items, core margin was also decreased 2 basis points.

Net interest margin was impacted by lower rates, which reduced annualized yields by 7 basis points on the loan portfolio and 2 basis points on the securities portfolio. The cost of interest bearing deposits decreased 3 basis points, which partially offset the drop in asset yields. We pre-invested $5 billion in securities late in the third quarter to build liquidity for the merger and that reduced our asset sensitivity. This also creates negative pressure on our stand-alone margins in the fourth quarter. In addition, we are evaluating opportunities to restructure our balance sheet as we wait for the merger close.

Continuing on Slide 11. Non-interest income was $1.3 billion, up 5.2% versus like quarter. Our fee income ratio was 43.4%, down seasonally from 44.4%. Insurance income was down $79 million due to seasonality, but increased 8.7% from a year ago on firming market pricing and organic growth. Mortgage banking income was stable as higher production and servicing related revenues of $24 million were offset by a decline of $25 million in net MSR valuation. Investment banking and brokerage commissions were relatively flat, but up 12% versus last year. This was primarily due to higher managed fee accounts, various charges on deposits increased $7 million, partly reflecting more days in the quarter. Other income increased $35 million, primarily due to a $23 million increase in income related to assets for certain post-employment benefits and $17 million from client derivatives.

Turning to Slide 12. Non-interest expense was $1.8 billion, an increase of $89 million. The increase was largely driven by Merchs and MOE expenses, which are up a combined $54 million. Merchs totaled $34 million, which included relocation expenses, legal fees, project management costs and professional services. MOE expenses were $52 million which included $39 million for personnel and $12 million for professional services. You can see the details on Page 16 in our quarterly performance summary. Core expenses were up $35 million, including $9 million increase for professional services, $6 million increase in personnel expense, which includes $23 million increase for certain post-employment benefit expense that was offset by decrease incentives and equity-based comp and a $19 million increase in other expense due to higher advertising and marketing costs and other items.

Expenses increased 1.7% or $30 million from last year, excluding merchs and MOE expenses. Year-over-year increase in adjusted non-interest expense was primarily driven by $18 million increase in personnel expense due to higher incentives, $34 million increase in expense reflecting higher non-service related pension expense, higher operating charge-offs, higher advertising and marketing costs, which was partially offset by a $17 million decrease in regulatory charges. FTEs were essentially flat versus second quarter, but down approximately $1,500 from year ago.

Turning to Slide 13. Capital and liquidity remain strong. The CET ratio was 10.6%, up 20 basis points due to strong earnings in the mortgage loan sale. The dividend payout and total payout ratios were 46.9%. We issued $1.7 billion of Preferred Stock and redeemed the similar amount of higher cost issuances which will save $4 million per quarter and have an earn back of 2.8 years. Our modified average LCR ratio was 139%. To build liquidity for the merger, we pre-invested high quality liquid assets at the end of the third quarter to facilitate compliance with the LCR ratio for Truist.

In addition, we issued debt to -- to build parent company cash which now exceeds $10 billion. These actions will provide negative pressure to BB&T's net interest margin, but it's prudent to us starting out with very strong liquidity.

Now let's turn to Slide 14 to review segment. Community Bank Retail and Consumer Finance net income increased slightly to $446 million. Fee income decreased $15 million, primarily due to the decline in the net MSR valuation, partially offset by increased production revenue. Average loans and leases decreased $2.5 billion, reflecting the mortgage loan sale. Loan yields increased 12 basis points, while interest bearing deposit costs were down 4 basis points. Non-interest bearing deposits were about flat. And residential mortgage originations were up 11% from second quarter, production mix was 68% purchase and 32% refi. And excluding the mortgage loan sale, a gain on sale margins declined 28 basis points due to a mix change to higher corresponding production.

Continuing on Slide 15. Community Bank Commercial net income was $19 million -- increased $19 million to $338 million. Loan production increased 22% as higher C&I and CRE production offset lower dealer floor plan production. Loan yields were down 17 basis points versus interest-bearing cost down only 1 basis point. Non-interest bearing deposits were essentially flat.

Turning to Slide 16. Financial Services and Commercial Finance net income was $185 million, an increase of $16 million. Total revenue increased $26 million, primarily due to higher Grandbridge income, capital markets and client derivative revenue. Average loan balances grew 7.6% annualized, helped by equipment finance and corporate banking. Loan yields were down 15 basis points and interest-bearing deposit costs were down 13 basis points. Non-interest bearing deposits were flat from last quarter. Additionally, invested assets increased $2.7 billion versus linked quarter and $5.3 billion versus last year.

Turning to Slide 17. Insurance Holdings net income decreased $50 million to $61 million, primarily due to seasonality.

Now I will turn it over to Chris to provide more perspective on our performance this quarter.

Christopher L. Henson -- President & Chief Operating Officer

Thanks, Daryl. So if you turn to Page 18, purposely two slides really to reinforce our transformation plan that we call IHOP, was Insurance Holdings Operating Plan, continues to gain momentum. This is the plan John Howard shared with you last fall at Investor Day and it's really built with assistance from BCG, a little more than a year ago, about 15 months or so. It's built around 32 initiatives that we're working to execute over the next three years. And as I said, we're about a year in. It includes implementation of new operating models, both in retail and wholesale, and a myriad of other revenue growth and expense synergy initiatives.

And if you look at the upper left hand chart there on Page 18, you can see revenue for the segments up 9.3% or $44 million like quarter. As I've pointed out in overtimes in the past, really three drivers of the strong organic growth. First is, good client retention and retail were up about 91%, wholesale about 76%. New business volume not renewals, totally new business volume was up 17% like quarter, that's the best number that I ever remember seeing. It was more impressive that it has built each quarter throughout the year. And then the third driver really is pricing. And on the heels of the two largest insurable last years in '17 and '18, we're continuing to see price lift, because of the tightening capacity in the market. So for example, second quarter, it was up about 3.5% this quarter, up about 4%.

So retention in new business and pricing is really driving the result you see in the lower left hand corner of organic growth. So organic growth is up 200 basis points to 8.7% in the quarter, which is about double what we would expect to see in the industry. We expect probably mid-4s in the industry. And we believe the backdrop allows for additional tightening of capacity and continued lift in pricing as we go through '19.

If we flip over Page 19. I would say that IHOP was really designed to help us drive be laser focused on enhancing the margin and then using the dollars of EBITDA production to reinvest in the business. So we have, I'd just point out, in almost every business, new technology implementations which will help both revenue and cost in the future.

If you look at the chart upper left there, EBITDA, you can see absolute EBITDA is up $24 million like quarter to 27.6%. And the strong organic growth that I shared with you on the prior page combined with good solid cost control. And then the third leg was really, you will remember we acquired Regions, July of last year, we're now 15 months into that and we have exceeded all of our expense and revenue synergies and the combination of those three things have really helped us drive the result in the lower left chart on Page 19, which is the EBITDA margin. You can see our margin like quarter is up 310 basis points to 21.4%. Now this is the lowest quarter of the year for us. So if you look at what our year-to-date margin would be, it would be in the 25% range. So a lot of improvement has been made in margin enhancement.

And lastly, I'd just leave you with a lot of focus on use of data and analytics to really help our underwriters better understand the true risk in the client which helps them long-term keep their -- keep their rates down and I'll say that's especially in wholesale.

So in summary, just continue to be very pleased with the progress that we have made in Insurance. I'll turn it back to Daryl.

Daryl N. Bible -- Senior Executive Vice President and Chief Financial Officer

Thank you, Chris. Continuing on Slide 20, you will see our outlook. The following guidance is based on BB&T stand-alone. However, we continue to expect the Merger Of Equals with SunTrust will close in the fourth quarter. We expect total loans held for investment to be flat versus third quarter mainly due to seasonality. Excluding this, loans would be up 1% to 3% versus linked quarter. We expect net charge-offs to be in the range of 35 basis points to 45 basis points and the provision is expected to match net charge-offs plus loan growth. We also expect GAAP and core net interest margin to be down 7 basis points to 9 basis points.

As we discussed earlier, we are building liquidity for the merger for LC, our liquid asset buffer and parent company cash. This will negatively impact net interest margin by approximately 3 basis points to 5 basis points in the fourth quarter. Adjusted for the liquidity build, we expect net interest margin to decrease 3 basis points to 5 basis points. We anticipate fee income to be up 2% to 4% versus light quarter driven by insurance and mortgage banking. We expect expenses, excluding merger related expenses to be flat versus light quarter. We expect one-time expenses for the MOE to be about $60 million to $80 million in the fourth quarter, mainly driven by personnel and professional costs. And we anticipate an effective tax rate of 20% to 21%.

Finally, BB&T's full year guidance remains intact. In a challenging rate environment, we will continue to grow our revenues faster than expenses, driving positive operating leverage. We'll be more pronounced, which we more pronounced once we close the MOE.

In summary, the quality of our core earnings this quarter was excellent, resulting in strong loan growth, solid fee income versus last year, and excellent asset quality.

Now let me turn it back to Kelly for an update on the Merger Of Equals and closing Q&A.

Kelly S. King -- Chairman and Chief Executive Officer

Thanks, Daryl. So as you can see, it was -- it really was a great quarter. And I particularly highlight the work that has been done in the loan area and the expense area and insurance area, all very, very good.

So let me give you a few comments with regard to the merger update, which is going extremely well. Our executive management team, which is the 14, all the seven things continues to meet weekly. The team is working extremely well together. I cannot be more pleased. A few will claw in the wall watching us meet, you got a thought we've been working together for years and years and years. Bill and I are working together extremely well. The whole team is working together well, and I must tell you, I really appreciate it. The focus of the team and the focus is working together and we're focused on the goal for making through this number one best financial institution that we possibly -- possibly can.

Making great progress in terms of naming the key leadership. Recently we've named 8,000 positions which is about 75% of the leadership roles. We believe about legal day 1 of close virtually all positions will be named and everybody will be ready to go. We've been very successful in meeting our diversity goals, which is one of our primary focuses. And we've done a really good job of picking benefits programs going forward for Truist. One of the great things about an MOE is you really get a chance to look at both companies and take the best of each side, and that's what we've done with regard to benefits. So we're going to have a world standard benefit program. And remember for the word of our clients, communities and shareholders, it really makes worth for our teammates and associates. So we feel really, really good about that.

So we've had some -- some remarks in terms of activity. July of 30th, SunTrust and BB&T shareholders, both almost unanimously approved the deal and the name. With regard to the regulatory process, it has been approved by North Carolina Commissioner of Banks, which is very important. The next step is approval of our divestiture plan by the Department of Justice. And then we believe that the remaining regulatory approval -- approvals will follow. We feel good about where things stand with the regulators. They are being delivered, given the size and significance of this deal as they should be and as we are been. I mean, so everybody has the same goal of making sure that when we move forward with this, that we've got it all the [Indecipherable] cross the T's. And so, given all of that, we believe that we are still on track for a closing in the fourth quarter, we can't guarantee that, but we believe that we are based on all of the information that we have at this time.

We've made really good progress in the last several months with regard to merging the technology of the two companies. So during September, we finalized the vast majority of the technology ecosystems. And remember what we try to do there is we take the best of breed. So SunTrust has the best tolerant program. We've picked our program, we have the best loan system, we picked that system. So the end result is, you get really, really first-class systems across the Board, which is fantastic.

We did recently complete a dress rehearsal for legal day 1 close. There are about 100 merger related workstreams that had to be tested and they all passed very, very well. So we are ready for the legal day 1 close. Very, very importantly, we have had two offsite several day meetings working on developing the Truist culture. This has not been a process of throwing out BB&T and throwing out SunTrust, it's been a process of taking the best of the -- of each one. And I've been extremely excited about how this has worked.

The culture as we define it, is our purpose, our mission and our values and then the various activity, approaches, kind of, the way we do things around here. We've already agreed to our purpose, our mission and our values, and I will tell you that Bill and I are very passionate about this process. We believe this is the most important part of the entire journey and we could not feel better. The teams had a complete meeting of the management. Good discussion, but no aggravated interaction. No, no, no real divergent views, just really fine-tuning, wording, in terms of how we present this to the world. So frankly, it has gone extraordinarily well. We could not feel better.

Our teams are 100% aligned. I would tell you, as we roll this out later that our purpose, mission and values are engaging, and very, very exciting. So as we go forward, once we have legal day 1, there'll be a number of things that will happen, kind of, the first thing is we have to affirm for the Board all the various committees and policies and practices, all of which are being worked on by various groups, but we are ready to go day 1 to present all of that to the new Company Board, Truist Board, to be able to approve all of that. We will share shortly after that, our purpose, mission and values with all the team mates. We think that's our number one job is to get out. We plan, kind of, a roadshow if you will, to get out and talk to our teams across the entire enterprise about our culture. We are working through our marketing area on our branding plan closing in on that, making really, really good progress. So that's very, very exciting and as that rolls out, it will be a more excitement.

We remain importantly very confident in achieving our $1.6 billion in net cost saves. And I would say that, well, in our view that we have not included in any of the numbers, any revenue opportunities, but we're doing a lot of work on that. Bill and Chris are leading that effort with regard to focusing on revenue opportunities and they're on like 20 different workstreams right now in terms of pretty low fruit. And so we wanted to be conservative in our projections, but I'll just tell you, there are huge opportunities when you combine this two companies, because there's virtually no overlap/ There is just opportunity, the same what SunTrust does and bring it over to BB&T and take what BB&T does and take it over to SunTrust, and we know how to do that. And so we're very, very excited about that.

I will tell you that when we announced this deal back in February, I was very, very excited. Today I'm even more excited, I'm more confident than before. And here's why? So the deal is basically same. The synergies are as good as they were, the economic opportunities is good, the transformative nature of this in terms of making the world better is good. But now a lot much into the process, I feel even better because our executive team is deep, it's strong, it's committed. Our teammates are excited. They see the world the same, they see opportunity the same. We truly believe that we can help our clients have a brighter financial future. We can create a place where our team mates will enjoy and have a long and fulfilling career. We believe our communities need help today. The world is changing really fast. We have -- are having a dramatic increase in the gap in terms of economic inequality and we don't feel good about that and we want to do our part.

And I can tell you that, legal day 1, Truist will be ready to be a leader in finding solutions to making life better. And of course, we will through all of these efforts optimize the long-term return to our shareholders, which we feel very, very confident about. So I want to thank Bill and the SunTrust team and all of my fellow BB&T associates and thanks for all the hard work that has gone into. Very soon we will be one team, and I will tell you all, we are ready to go.

Back to you, Rich.

Richard Baytosh -- Executive Vice President, Investor Relations

Thank you, Kelly. John, at this time, if you would come back on the line and explain how our listeners can participate in the Q&A session.

Questions and Answers:

Operator

Thank you, sir. [Operator Instructions] We will now take our first question from John McDonald of Autonomous Research. Please go ahead sir. Your line is open.

John McDonald -- Autonomous Research -- Analyst

Hi, good morning. I wanted to ask, Daryl. Just a question on the fourth quarter outlook. When we kind of combine the outlook for loans to be relatively flat and NIM to be down, if we add in, then I guess the average securities are probably up given the liquidity build. How does the dollars of NII look? How should we think about that for the fourth quarter?

Daryl N. Bible -- Senior Executive Vice President and Chief Financial Officer

Yeah, I would say John that, if you look at linked quarter, probably be down a touch, just because of the drop that we have in margin and flat earnings assets for the most part, linked quarter. A lot of that is just due to seasonality on the loan side like I said in the prepared remarks. And then the margin decline, you know core margins really down 3 basis points to 5 basis points, the rest of it is just due to building up excess liquidity for the combination with SunTrust so that we can have strong liquidity, LCR ratios, and just strong overall cash on hand and we're going to run our company.

John McDonald -- Autonomous Research -- Analyst

Got it. That's great. And then just a bigger picture question in terms of the Truist MOE. With the -- the environment has changed since February and you've also had a chance to fine tune your assumptions with the third-party review. Do you have any updates on, kind of, the financial targets that you set out for the 51% cash proficiency in ROTCE of 22%. I'll see it as the last change in the further out, but any updates on that.

Kelly S. King -- Chairman and Chief Executive Officer

John, this is Kelly. The market is substantially different than it was back in -- back in February. The most difficult thing to [Indecipherable] -- our efficiency ratio, because the denominators is under a lot of pressure. We believe with regard to efficiency ratio, whether we hit 51% or not, we believe we will be top-in-class in terms of our efficiency ratio. I would say, I feel more confident ending 22% return on tangible common equity. So regardless of what the numbers or exactly what we said nine months ago, because the role has changed, we think that be -- will be top performer.

Daryl, any comment on that.

Daryl N. Bible -- Senior Executive Vice President and Chief Financial Officer

The only thing I would say John is, we still have a 100% clarity between both companies. So we have high level estimates. I would say we -- once we close this quarter, and if you give us a little bit of time, a month or so, we'll come out with more clear guidance on a go-forward basis on the timing of our cost saves and how we're going to get the cost saves. So we know you guys need that information. We will provide it for you, but we got to get the deal closed and we have to make sure we understand where all the savings towers are coming from first.

John McDonald -- Autonomous Research -- Analyst

Totally understand. Thanks very much guys.

Operator

We'll now move on to our next question from John Pancari of Evercore. Please go ahead. Your line is open.

Richard Baytosh -- Executive Vice President, Investor Relations

John?

John Pancari -- Evercore Partners -- Analyst

Sorry about that. Yes. So just back to the deal closed discussion. I know Kelly you mentioned that you're confident in fourth quarter to close the deal, but you also in the indicated you can't guarantee it. Is there anything that lead you to believe that it could be after 4Q, any change in your thinking as you're going through the process where you think and it could be into next year?

Kelly S. King -- Chairman and Chief Executive Officer

Well, as I said, John, we are focusing on the fourth quarter. Obviously, we are aware that possibly could slip to the first quarter and we're getting some thought of that, but most of our focus is on the fourth quarter. We are not aware of any reason there to expect to go into the first quarter. I only say that you know today, this is beyond our control. This is in the regulatory framework and they move at their own pace. And so all we can do is give you our best information based on what we know. And based on what I now know I still expect a fourth quarter close.

John Pancari -- Evercore Partners -- Analyst

Okay. All right. Got it. Thank you. And then separately, Daryl, I know you mentioned that in your remarks that you're evaluating additional opportunities to further restructure the balance sheet. I know you've already pre-funded the merger as well as sold some of the residential mortgage portfolio, but just want to get, if you can elaborate possibly on what incremental actions you could evaluate for the balance sheet? Thanks.

Daryl N. Bible -- Senior Executive Vice President and Chief Financial Officer

Yeah. So, John, I mean, both companies are looking at their balance sheets very thoroughly right now. Kelly said earlier, one of the things we want to do when we combine as we want to make sure that our interest rate sensitivity is relatively neutral to slightly biased up a little bit. So -- but try to get it to be more neutral so you don't have a huge impact to NII as rates continue to change. We also, as I said earlier, want to have strong liquidity.

From a credit perspective, if there are certain portfolios or loans that can be sold that Clarke and Ellen Koebler want to get after balance sheet, we will take advantage and do that as well. And lastly, we will look at assets, not so much a decision on the business, but if there is assets on the books that might be marginally not the best performance from our capital return perspective, you might see us shed some of those as well. So all that's coming together. We'll have more color on that later in the quarter as we close.

John Pancari -- Evercore Partners -- Analyst

Okay, great. Thanks, Daryl.

Operator

We will now move onto our next question from Mike Mayo of Wells Fargo Securities. Please go ahead. Your line is open.

Mike Mayo -- Wells Fargo Securities -- Analyst

Hi. It's another question on the merger. So you say, of 75%, the leadership roles name when do you get to 100%. You say you have most of the tech ecosystems identified, what do you have left there. And most importantly, I know you've been asked twice already, but can you put more meat on the bones on the technology related savings. I mean, that was the number one reason for merging so that you can make more tech investment, can get more added tech, and so, what have you learnt over these last nine months? Thanks.

Kelly S. King -- Chairman and Chief Executive Officer

Yeah. So with regard to the staffing, I fully expect virtually 100% of all the staffing to be agreed by around 1st of November and we're very close. But it's -- there won't be many that we'll be paying it out there by 1st of November. In terms of the ecosystems, we've covered all of them. And so that was 100 net volumes. So we're going through that thoroughly. And so we feel really, really good. And that's the first step by the way in the whole conversion process. You simply have to decide which ecosystems and then all the various systems within those ecosystems. So all of that is going along really, really well. We are completely on track with regard to that.

In terms of the technology savings, you know it has multiple facets. The first thing is, you have redundant hardware, which of course goes away. You have -- you have redundant programmers with regard to -- because you're offering to the redundant hardware systems and tuner for software systems. You know when you pick one system over another system that necessarily frees up expense with regard to that. And then of course, you're thinking in terms of reinvesting for the technology of the future, and you're right.

And I -- when we announced this deal, we said this was really about putting together two companies that of course will become more economically sound but really leaning into the future by investing in technology that would allow us to be a leader with regard to meeting our clients' needs. That's a process not light as easy. And to be honest, as you know, hook in the computers up of the existing systems because we're having to look at what's available today out there that we don't have. And to be honest, it is not a lot out there today that we don't have. We are in really good shape. If you look at like our digital platform, I mean, we're constantly rated as some of the one, two and three in the entire system, including all the big banks despite what some people say it as, we are extremely well positioned with regard to that. But the world changes really fast and so we have to invest a lot to be sure we stay at the top.

And then, we are already beginning to do work in terms of thinking about what's the next step, what's the new frontier, what is the mixed investment that we can make that will substantially improve the lives of our clients. And so that's what this whole innovation center is all about. It is creating a group of teams. So we have 20 to 40 agile teams that will be focusing on improving the existing products and services and approaches, but creating new products and services and small business in retail across the board. We are canvassing the world in terms of what's out there. We don't believe in recreating at will to something out there around the world that we can bring to our clients, we want to do that. But we also recognize that this world is changing so fast that there is opportunity for us to create a new oil. And so innovation is a part of this whole process.

So the mechanics of all that is very complicated, but it's really a bifurcated process of hooking into existing computers up and then say, we're happy, we're going to chuckle when I say, but it really is that simple, is hooking the computers out and make sure we operate efficiently from day one and then making sure we're layering on top of that improvements that will make our clients' life better.

Mike Mayo -- Wells Fargo Securities -- Analyst

And then just one follow-up. So November 1st you have all the leadership identified, that would be good. But culturally, you gave a presentation recently talking about the cultural similarities and you gave some data. And I didn't really understand that data, I mean, it seem kind of pie in the sky to me, and look, you're close to the situation, you're dealing with the employees, you're saying, hey culturally we're similar. Many people on the outside who apology for a decade or two say, you know what you guys really aren't similar BB&T and SunTrust. I guess, where is the disconnect and the perceptions about the difference in cultures and what you're finding out? And when there are differences, how are those resolved?

Kelly S. King -- Chairman and Chief Executive Officer

Well, I'm not sure which meeting you're talking about, but --

Mike Mayo -- Wells Fargo Securities -- Analyst

I think the Barclays Conference --

Kelly S. King -- Chairman and Chief Executive Officer

I don't most believe -- I don't most believe in times, so I would just put that out there, I'll try to be straightforward honest about everything I'd say and be always light, I'll tell you truth. And so, what I was referring to is that we've had a number of statistically valid feedback sessions from 20 plus barrels of SunTrust and BB&T clients that have associates -- I'm sorry associates that have validated what I said. So for example, when we were doing the name research, we had 20,000 plus responses, 10,000 from each side, and we gave down a list of 16 words to describe the companies and all groups on both sides picked the exact same four words, which is pretty incredible.

And then, we did a more sophisticated study in terms of, kind of, how we do business around here, kind of, the behavioral aspects of culture. And we were shown by the research people, statistically driven graphs that showed BB&T associate responses and SunTrust associate responses and it was a virtual complete overlap, meaning whether the masses of our employees and you asked him how do you feel about this or that or the other, they gave you the exact or same response.

And I guess that anecdotally when I'm traveling around into field and talking to our people and when I ran into SunTrust people, you know, I just ask, how is it going? This is going great. We work together. We had lunch together, non-competitively, but I think they know each other, they're all friends. And I talk about each other just very positively and affirmatively. And so, when you put all that together, I'm quite certain, there are no material deficit. It is always understood when you guys have big companies. You could -- I'm sure you'd find something which is different about the companies. But where there are, you know what I call manual differences, they will just fade as we come together as Truist and operate under our new purpose, mission and values. So they will just fade away. If we were to encounter in a material, which we not, we would do with a straight up and the executive team and we were the richer consensus and move forward. But we've covered a lot of issues. At this point, it has been nine months we have covered a lot of waterfront and the teams are working great as I've said, and we've not discovered material issues that I could say you was a real culture crack.

Bill Rogers and I have this working arrangement together where we talk about no light between us and so we've committed to each other very deeply that if either one of us see any light, we get on the phone immediately, talk about it, and we haven't found any light. I'm not saying we won't, but I don't think we will. But we have the mechanism and a commitment and the trust between Bill and I and all the way through the teams that if we do have issues we deal with them promptly, quickly and decisive.

Mike Mayo -- Wells Fargo Securities -- Analyst

All right. Thank you.

Operator

We will now move on to our next question from Betsy Graseck of Morgan Stanley. Please go ahead. Your line is now open.

Betsy Graseck -- Morgan Stanley -- Analyst

Hey, good morning.

Kelly S. King -- Chairman and Chief Executive Officer

Good morning.

Betsy Graseck -- Morgan Stanley -- Analyst

A couple of questions. First just a clarification, Daryl, on kind of the LCR in the commentary you gave around HQLA and retooling the balance sheet a little bit for -- of post merger. On Page 10, when we look at the change in NII scenarios and you've got this negative sensitivity both down 100 and down, and up 200, I just want to get, how are you thinking about what that looks like post merger, because I don't think you would set yourself up like this on a stand-alone basis. So just want to understand where this is going and whether or not you had to get ready for LCR even if the tailoring rule didn't go through. In other words, are you carrying a little bit too much HQLA at this stage, post tailoring rule or not? Just if you could speak to that a little bit.

Daryl N. Bible -- Senior Executive Vice President and Chief Financial Officer

So we are still working on our numbers, at the 85% number. Both companies operated at 70%. So we will have to have one form or another higher -- high quality assets on our balance sheet. We'll take some form. So we started to build that at the end of this past quarter. So that -- from a interest rate sensitivity, by us purchasing those securities, we also did unwound some pay fixed swaps, put on some receive fixed swaps. It did create us, so that again we improved our sensitivities on the downside, but it hurt on the upside. No, ideally when we close or shortly thereafter, we would want it to be somewhat symmetrical in that. We would so probably lose a little bit on the downside, but benefit on the upside as we work on that.

Donna and her team are working together and they are coming up with strategies post legal day 1 such that we will try to get into that position. You're right. We were, kind of, cut in the middle of what we're trying to do right now is what you saw at the end of this quarter, but we will work toward that and we'll see how that all comes together, but I feel confident we'll get into a position where we need to be post close.

Betsy Graseck -- Morgan Stanley -- Analyst

And that's -- you know, in parts because STI is a little more asset sensitive than you I'm guessing is part of that answer.

Daryl N. Bible -- Senior Executive Vice President and Chief Financial Officer

Yeah. That's true. That is true. That will help some exactly and I think there will be some other adjustments we might make as well.

Betsy Graseck -- Morgan Stanley -- Analyst

And then just separately, Daryl, could you speak and Kelly could you speak a little bit to how you're thinking about the buybacks as you get to close and then beyond close. I think last time we spoke, there was an expectation that the CET1 might be closer to 10%, but then there was some mid-quarter release that talked -- that seemed like maybe it would be a little bit below 10% at close. So can you tell us where the parts are moving there and how it impacts your outlook for the buyback.

Kelly S. King -- Chairman and Chief Executive Officer

So Betsy, just at a general level, you'll recall that we said that we want to target 10% CET1 at close and we really are not going to consider buybacks until after we hit that level. Now I recognize that many investors have already asked me, why do you need such a hefty CET1 level, because that's got a lot of cushion and at which it does. But the reason is, because we going through a whopping big merger, which has got a lot of uncertainty, the economic environment has uncertainty, geopolitical events have uncertainty. So for all those reasons, we are conservative and they still stock on 10%.

So there I'll give you a little color on just a second about kind of where we are. From my point of view, it's hard to know and it kind of depends on what rates are. These marks are huge impact in terms of capital position but it's going to be close to 10%, which means it's not going to be too far past legal day 1 that we'll be back in about their business, but the specific dates, Daryl, can give you a better feel.

Daryl N. Bible -- Senior Executive Vice President and Chief Financial Officer

Yeah. So where we stand right now. Right now, we'll probably a touch under and -- but as Kelly said, we don't really know the exact date we're going to close when interest rates are. We're still working with Deloitte, our third party on the actual mark for SunTrust, all that is coming together nicely. My guess is, we'll be close to 10%, we may not be at 10% right now, but it also depends on depending on what assets we decide to share or whatever could have an RWA left potentially. So you never know how you get there right now. It's -- we're in the hunt, but there is no guarantee that we will be 10% or close, but this company combine generates a lot of capital, a lot of earnings and we will get to 10% I think in a relatively short amount of time.

But it's still a wild card that you don't really know, because rates are so volatile right now where you're going to be. I just know that we have a lot of flexibility and we're working to try to do what we can to maximize and optimize the balance sheet.

Betsy Graseck -- Morgan Stanley -- Analyst

Okay. Good. All right. And Kelly your point is that tends to high number anyway?

Kelly S. King -- Chairman and Chief Executive Officer

Right, it does.

Betsy Graseck -- Morgan Stanley -- Analyst

Thank you.

Operator

Thank you. We will now move on to our next question from Ken Usdin of Jefferies. Please go ahead. Your line is open.

Ken Usdin -- Jefferies -- Analsyt

Thanks guys. Good morning everyone. A follow-up on just things that are going to be potentially slipping time wise depending on the close date, but Daryl, any understanding at least on the BB&T side of what the expected seasonal day one looks like and then just any considerations in terms of any changes with regards to how you think the credit mark looks and potential breakdown of that credit mark? Thanks.

Daryl N. Bible -- Senior Executive Vice President and Chief Financial Officer

Yeah, so I mean for BB&T, our CECL reserves are going to be higher than where we operate -- and we incurred right now. We're probably up in the neighborhood of 30% to 50% in that range. All that could be a moot point when we -- if we close this quarter, in the fourth quarter. So Clarke and Ellen Koebler and our teams have been working on the combined choice number. We are at a point now where we can disclose that number. We have to still work on that but the teams are working together and just coming up with it.

As far as the purchase accounting marks go, I would say when we announced this transaction in February, we were saying the credit mark would be 2%. We believe the marks are coming in close to that level, but that's not final yet. It could be a little give or take, plus or minus on that, but I think we're in the ballpark of that. The other marks on the liquidity and interest rate marks right now, it is at a slight discount, but that's also volatile to what happens in the marketplace. Hopefully that's helpful.

Ken Usdin -- Jefferies -- Analsyt

Yeah. Thank you. And I'll follow-up just on the insurance side, you talked a lot about the color, how that current business trends are going from a growth perspective. Can you talk about how insurance is expected to grow within the outlook you had given for total fees, just in terms of a ballpark of the type of growth rate that you think it could be sustained in the insurance business? Thank you.

Kelly S. King -- Chairman and Chief Executive Officer

Sure. For fourth quarter, we -- this is our lowest quarter of the year, seasonally. Fourth quarter will be our second lowest. So we would expect from here, commissions to step up in the 3% range. But -- so we're looking out further in fourth and maybe the first half of 2020. What you have really is post the two years, large years of insurable loss of '17, '18 as I had mentioned earlier, you have tightening of capacity in the market such that there is still upward pressure on pricing. It is hard to know exactly sort of how long that last. But certainly, for the quarter, we expect it to hold possibly, even push up a bit depending on how the reinsurance renewals go in January and I think you also could see some further commitment to that pressure. So when we look at the balance of the year, we're expecting sort of full year organic growth to come in at least for us in the 6% to 7% kind of range. We're -- year-to-date, we're at 9.1% right now. Possibly we could beat those numbers and we expect the industry probably be in the mid-4s. So I think building very, very (Technical Difficulty) about the backdrop of the market as a result of that, but also I would say, because of the half approach we started over a year ago, we feel really good about our team.

As I said, our new business growth has built upon itself every quarter throughout this year and we've got a technology going in in just about every business which has helped us be more efficient, more effective. So I think the prospects for us to outperform the market as we look forward are very, very solid, both in margin and in overall growth.

Ken Usdin -- Jefferies -- Analsyt

Thank you.

Operator

We'll move on to our next question from Matt O'Connor of Deutsche Bank. Please go ahead. Your line is open.

Matt O'Connor -- Deutsche Bank -- Analyst

Good morning.

Kelly S. King -- Chairman and Chief Executive Officer

Good morning.

Daryl N. Bible -- Senior Executive Vice President and Chief Financial Officer

Good morning.

Matt O'Connor -- Deutsche Bank -- Analyst

First, I just wanted to follow-up on the capital discussion. I can appreciate, you want to keep little more capital as integrations going on. But as you think kind of post-integration or once you're confident in the execution of the integration, we see the 10% CET1, is really kind of well above where some of your direct peers are pointing to. You might have seen yesterday, a very similar bank to you in size, talked about bringing it down to 9%, another one is in the 8.5% to 9% range. So I'm just wondering if you can give some thoughts on kind of medium-term post some of the deal integration. What do you think that ongoing CET1 target might be?

Kelly S. King -- Chairman and Chief Executive Officer

So I think predicting what your capital level needs to be out into the future is a bit of guessing game, because you really can't predetermine what your capital levels going to be unless you could predetermine what the existing circumstances is going to be. So it always has to be a hedge. And the best way to think about us is relative to the environment. So if the environment is relatively risky, because you will see us be relatively more conservative in terms of capital liquidity and we've always have strong diversification. Capital and liquidity vary depending on the circumstances that we see at the time and the forecast that we made.

As I said earlier today, from a conservative point of view, you just had to recognize that doing a large deal, there are just lots of issues. While we feel extraordinarily confident about the conversion and all of that, there are still things that I can't guarantee. And my prediction is about end of the year we will have a trade war reconciliation on our NAFTA approval -- new NAFTA approval, et cetera, but I can guarantee that. So when you throw all that that anchors you back to the 10%.

Now to your point about all those moving to 9% or so, I certainly don't think, I mean, when we get to a more tranquil or predictable environment, I don't think 9% is going to inappropriate at all. I think cushioned down to 8.5%, which still gives you 150 basis points over the minimum kind of 7. But remember 7% is really hard. So you don't ever want to be here close to 7% because some pretty bad stuff that happens when you get there.

So the debate is really between 8.5% and 9% on ongoing more stable environment position in my view. And so as things stabilize, I will be recommending to the Board that we consider a lower target capital and based on the work that Daryl and his team does. We will come out with whatever the number looks like. But we're not going to be rushed and I want to be fair to our shareholders. There is opportunity here but we're going to be conservative and I want the market to understand that. I'm not going to over promise or rather over deliver.

Matt O'Connor -- Deutsche Bank -- Analyst

That's helpful. And then just separately, any early signs of, call it, either client attrition or clients kind of taking a wait and see approach from doing business with you, and I know you can't talk to SunTrust. But is there any kind of wait and see or on the flip side, are there discussions with clients saying, hey, now that you could be a lot bigger, can you do more for us, whether it's taking bigger positions in lending or you've got a broader product set, that's more we can do with you there. Talk about those kind of puts and takes if you're seeing any so far? Thank you.

Kelly S. King -- Chairman and Chief Executive Officer

Yeah, well, so it's a great question, and you're right. We have limited insight into that, because we've been very, very clear to our people. We are outright competitors today as we have since day one and we're not going to walk anywhere close to that line of not being competitive. So therefore, we have very limited information. We do pick up little bits of anecdotal feedback. And certainly, there are clients that are talking about, hey, it's going to great when you guys get together. You'll have more expanded lending capacity, you have more products and services if they were BB&T or SunTrust out there, where both say the same thing, which is true. And so I think everybody recognizes the opportunity out there about us combining.

In terms of any attrition materially that I've heard with regard to the BB&T and Sun, there has not been. I know there's been a lot of the conversation out in the market about everybody saying they have taken all of our business. That's not true. You just saw a growth numbers, we grew along 6.5%. Deposits grew 5%. And so I don't want to have to be clearer than that. There is not any material attrition.

Our turnover rate is about the same or lower than it has been. So I would say to you that this is extraordinarily successful to this point. There is no indication of any decay and there is no expectation of any decay rather the expectation is a rather positive optimistic opportunity as we come together.

Richard Baytosh -- Executive Vice President, Investor Relations

Hey, John, could you take our next caller please.

Operator

Yes, sir. We will now move on to our next question from Michael Rose of Raymond James. Please go ahead. Your line is now open.

Michael Rose -- Raymond James -- Analyst

Hey, thanks for taking my questions. Just going back to the merger. I think when you guys announced this, you've talked about $2 billion in one-time charges. Just wanted to see if there are any adjustments to that and any adjustments to the timeline. I think you talked about a conversion somewhere 12 months to 18 months after close. And should we expect the majority of the one-time cost to come around that time frame? Thanks.

Daryl N. Bible -- Senior Executive Vice President and Chief Financial Officer

So, Michael, it's Daryl. So we -- numbers are still coming together. So year-to-date between BB&T and SunTrust, if you look at our charges to date, we're about $250 million between marks and MOE related expenses. We got more information on the IT conversions, that's getting finalized. That's going to be a really large number. So I don't have all the numbers in yet. But I'm pretty sure that we're going to probably utilize the bulk of the $2 billion. We'll give you more color as we close, because we still don't have all the information that we really need between each of ourselves until we close the transaction.

But what I'm seeing right now and there is a very complicated integration as Kelly talks about booking these computers together. That's going to take some -- a lot of need for outside assistance to help that all come together. So I would say it's going to be the bulk of the $2 billion from what we are seeing right now. But we'll give you better information. First, timing goes. We're trying to get majority of all that systems put together by the end of '21 if that's possible. There is a -- the teams are working really hard to work out those plans and feel very comfortable that can be done in that timeframe, but we'll give you more specifics as we get more clarity probably over the next couple of months. But things are coming in as expected and I think you're going to have a really robust combination of IT systems when it's all said and done.

Michael Rose -- Raymond James -- Analyst

Okay, that's great color. And maybe just as a follow-up. Now you've had some time to kind of dig into their side. Can you just explain where you think the greatest opportunities could be for revenue synergies and maybe what areas you're working on as you prepare for the year for the close? Thanks.

Christopher L. Henson -- President & Chief Operating Officer

Yes, Mike, this is Chris. Bill and I've been working together as Kelly alluded to earlier on a number of fronts. I would just maybe hit the highlights. Certainly, they have a much more built out Capital Markets business to bring strategic advice, sort of down segment if you will. We have a very strong community bank that from -- I'll call it revenue companies down to $25 million that need those type of services, many of which we did not offer prior. So we see a great opportunity to bring strategic value to those commercial clients on many, many fronts from a fee perspective to really build out their overall needs and I think for their future. The flip of that would be -- so that's a big one.

The flip of that would be, we have a substantial insurance business, I think a best-in-class insurance business. There's really not much we don't offer that we can take to their entire commercial business, up and down, small business, all the way up to the largest corporate clients they handle. We also have a -- the largest life insurance distributor in the country with Crump Life, that we have built a business within our Company of offering to -- to our clients. We will extend that naturally to the SunTrust clients on the -- both the commercial and the individual side.

If you think about the connectivity with wealth and the broker dealer and a strong wealth business they have, the state planning need to fund their sales plans, plus their agreements that kind of thing, we have a tremendous opportunity to offer life into the wealth business and also into key man insurance on the commercial side. So tremendous opportunity there.

Third, that's kind of common sense is, we have a very strong business we call BB&T at work. We provide sort of turnkey deposit programs to our commercial clients for their employees. SunTrust has a plan. It has not been as effective and it's one thing that we think we can turn on day one to help grow deposits in that sector. That's just a handful of three that I think have potential, but we've got another 15 to 18 behind that maybe begin to kind of all sizes and shapes that were not modeled in the MOE that we're very excited about.

Michael Rose -- Raymond James -- Analyst

That's great color. Thanks for taking my questions.

Kelly S. King -- Chairman and Chief Executive Officer

Thank you.

Operator

We will now move on to our final question from Stephen Scouten of Sandler O'Neill. Please go ahead. Your line is open.

Stephen Scouten -- Sandler O'Neill -- Analyst

Hey, good morning to everyone.

Kelly S. King -- Chairman and Chief Executive Officer

Good morning.

Stephen Scouten -- Sandler O'Neill -- Analyst

I was curious how you guys are thinking about the move to Charlotte and kind of protecting the legacy brands and the standings that you guys have in Winston-Salem for BB&T, and obviously, Atlanta for SunTrust. And particularly as that pertains to Atlanta and continues to grow and look like kind of capital the Southeast and how you think about protecting that as you moved the headquarters to Charlotte and not letting somebody else kind of take that position over time?

Kelly S. King -- Chairman and Chief Executive Officer

So, Stephen, we are very excited about the move for all three markets, Charlotte, Atlanta and Winston-Salem. Charlotte has a super dynamic market. I mean, it's going extremely fast. It's got to be a real kind of a major focus for young professionals to be attracted and a lot of technology people there, a lot of technology companies there, auto companies moving their technology operations there. When this merger is done, Charlotte is the second largest financial district in the country. And so Charlotte is going to be a mega place for us to do business.

But Atlanta is fantastic as well. Atlanta as you say is clearly the dominant city in the Southeast. It's a fantastic place. We love Atlanta and we will continue to love Atlanta. This is not -- we're not moving out of Atlanta. I mean, we will have a superstar later in Atlanta from SunTrust, who is one of the most accomplished bankers in the country today and she is extraordinarily plugged in. We won't miss a beat in Atlanta. Our commitment will be increased in terms of our community support. Our commitment in terms of marketing and execution will be increased. We would expect our execution of business attraction in Atlanta to be greater going forward then it has been in the past. And keep in mind that you know our commitment was and is that we will have domiciled our headquarters for capital markets, investment banking, wealth management in Atlanta.

Likewise in Winston-Salem, our Retail Community Bank will be headquartered at Winston-Salem Triad area. And so, neither market loses. It's just that we happen to be blessed by having three fantastic markets that are now that kind of the foundational, anchor, geographical locations of Truist. So I don't think about it as Truist being anchored to Charlotte. I think about as Truist being anchored to two to three. And we still have a toehold end markets that we generated from in Winston, North Carolina and Orlando. So we are a community bank. We don't think in terms of one market driving everything, we think of it being a coalition of a group of community banks coming together under the advantages of holding company. So nobody loses, everybody wins.

Stephen Scouten -- Sandler O'Neill -- Analyst

Perfect. Helpful. And then maybe just one follow-up. You spoke to kind of seeing long-term strength in the economy and obviously your growth remains solid ex the mortgage sale. But you've seen some mixed economic numbers in manufacturing, et cetera. Can you talk a little bit about what you're seeing from your incremental investment in overall market demand? Thanks.

Kelly S. King -- Chairman and Chief Executive Officer

Yes, I'll make a comment and then I'll ask Clarke to make a comment. The feedback that I get primarily from our Regional Presidents, but also talking directly to class when I'm traveling around, you know for 10 years, MainStreet America really kind of suffered as the biggest companies were doing more robust international business and MainStreet were still recovering from the recession. But MainStreet has recovered from the recession. And after 10 years now at investing, Main Street is now needing to invest, wanting to invest and they are investing. So MainStreet is kind of a broadbased business activity that we see across the ray of our business activities and of course we don't participate as much and a larger global international businesses. So as they are seeing more of the impact of the trade war, it's not that's not impacting us as much as with some of the mega banks.

So I'll say, earlier it was if we are still here, we are beginning to hear some conversation from our local MainStreet clients around uncertainties, around trade wars, because after while it drift down the Main Street and everybody out there talks about it. If that persist for a long time, it will affect MainStreet but it's not having a material impact today.

Clarke, any color on that?

Clarke R. Starnes -- Senior Executive Vice President and Chief Risk Officer

Yes, I would just echo what Kelly is saying that, while there is more conversation about the headline news and you might be some more cautious tone in some conversations, our opportunities continue to be very robust across the Board. We have good pipelines, really I think one of the benefits that Kelly brought out earlier is just the diversification in the various platforms we have. So while there is more conversation, I'd say it's more on the higher end than it is at this point on MainStreet or the retail side, but people are conscious and thinking about it and we're trying to respond appropriately, but we still think there's plenty of opportunities with all the different levers that we have to pull.

Stephen Scouten -- Sandler O'Neill -- Analyst

Great. Thank you guys so much.

Operator

Okay. That concludes today's question-and-answer session. At this time, I will turn the conference back to Mr. Rich Baytosh for any additional or closing remarks.

Richard Baytosh -- Executive Vice President, Investor Relations

Okay. Thank you, John, and thank you everyone for joining us. I apologize those we have time to get through today and we will call you later. And I hope everyone has a good day. Thank you very much.

Operator

[Operator Closing Remarks].

Duration: 76 minutes

Call participants:

Richard Baytosh -- Executive Vice President, Investor Relations

Kelly S. King -- Chairman and Chief Executive Officer

Daryl N. Bible -- Senior Executive Vice President and Chief Financial Officer

Christopher L. Henson -- President & Chief Operating Officer

Clarke R. Starnes -- Senior Executive Vice President and Chief Risk Officer

John McDonald -- Autonomous Research -- Analyst

John Pancari -- Evercore Partners -- Analyst

Mike Mayo -- Wells Fargo Securities -- Analyst

Betsy Graseck -- Morgan Stanley -- Analyst

Ken Usdin -- Jefferies -- Analsyt

Matt O'Connor -- Deutsche Bank -- Analyst

Michael Rose -- Raymond James -- Analyst

Stephen Scouten -- Sandler O'Neill -- Analyst

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