What is the Comprehensive Capital Analysis and Review (CCAR)?

CCAR is an annual exercise conducted by the Federal Reserve Board that assesses whether the largest U.S. banks have sufficient capital to absorb losses and continue lending during times of severe economic stress. It involves two main components: the Dodd-Frank Act Stress Test (DFAST) and the Supervisory Severely Adverse Scenarios, which inform the calculation of capital requirements.

What are planned capital actions?

Planned capital actions refer to a bank's intentions regarding the distribution of capital to shareholders and other stakeholders. This typically includes plans for dividend payments, share repurchases, and other capital return strategies. The Federal Reserve reviews these plans as part of CCAR to ensure they are consistent with maintaining sufficient capital levels under stress scenarios.

What is the Stress Capital Buffer (SCB)?

The Stress Capital Buffer (SCB) is a regulatory requirement that was implemented following the 2008 financial crisis. It represents an additional capital amount that large banks must hold above their minimum capital requirements, based on the potential losses projected from a severe economic downturn as determined by the Federal Reserve's stress tests. A new preliminary SCB calculation from the Fed suggests potential adjustments to TFC's capital requirements.

What is the significance of this 8-K filing for investors?

For investors, this 8-K is an important, though often preliminary, indicator of the bank's capital strength and future capital return strategies. The CCAR results and the SCB calculation can influence a bank's ability to increase dividends or buy back shares. Investors will typically look to the full press release (Exhibit 99.1) for more specific details on the planned capital actions and any implications of the SCB on TFC's capital ratios and profitability.

TRUIST FINANCIAL CORP 8-K SEC Disclosure

Summary

Truist Financial Corporation (TFC) filed an 8-K on June 28, 2021, to announce outcomes related to the Federal Reserve's 2021 Comprehensive Capital Analysis and Review (CCAR). The filing highlights planned capital actions and the receipt of a new preliminary stress capital buffer (SCB) calculation from the Federal Reserve. While specific details of the planned capital actions are not elaborated upon in this 8-K, the announcement signals that TFC has received feedback from the Federal Reserve regarding its capital planning and risk management, which is a standard part of the annual CCAR process.

Key Highlights

1Truist Financial Corporation (TFC) is responding to the results of the Federal Reserve's 2021 Comprehensive Capital Analysis and Review (CCAR).
2The company announced planned capital actions in connection with the CCAR results.
3TFC received a new preliminary stress capital buffer (SCB) calculation from the Federal Reserve.
4The information was disseminated via a press release dated June 28, 2021, attached as an exhibit to the 8-K.
5This filing is primarily an informational update regarding regulatory capital assessment, a standard procedure for large financial institutions.

TRUIST FINANCIAL CORP 8-K Report, Corporate Update (Jun 28, 2021)

Summary

Key Highlights

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