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How Much Did Truist Make From Pandemic Relief?
The SBA owed Truist Bank about $588.5 million in processing fees on its 117,956 PPP loans, on a loan-by-loan model. Truist's own earnings presentations put its PPP revenue, fees and interest together, at $692 million over nine quarters. Its filings show no pledge to give the fees away. When a House committee asked it in 2022 to "detail any funds received" from the pandemic programs, its chief executive answered with loans, dollars and jobs.
I. A model, and the bank's own table
Most lenders never said what the PPP paid them, so the answer has to be modeled, as it was for Womply's fees. Truist gave a partial answer of its own, in an appendix to its quarterly earnings presentations.
| Question | Figure | Source | Kind |
|---|---|---|---|
| What did the SBA owe Truist on its 2020 loans? | $407.8 million on 80,445 loans | SBA loan-level data, priced loan by loan | modeled |
| What did the SBA owe Truist on its 2021 loans? | $180.7 million on 37,511 loans | SBA loan-level data, priced loan by loan | modeled |
| What did Truist report as PPP revenue? | $692 million, April 2020 through June 2022 | "PPP details" tables in the 4Q21, 1Q22 and 2Q22 earnings presentations (Form 8-K exhibits) | company filing; fees and interest combined |
| Did Truist report its PPP fees on their own? | no | Forms 10-Q and 10-K, 2020 through 2022 | company filings |
| Did Truist pledge the fees or their profits? | no pledge found | the same filings; Forbes Advisor, July 10, 2020 | company filings; press |
The two modeled halves add to $588.5 million, the 11th-largest fee total among the 4,688 lenders in the SBA file (PPP lenders by estimated fees). By dollars lent, Truist was fourth. The series ranking of fee collectors adds agents and contractors and ranks each on its fees after documented payments to agents. There Truist is eighth, behind Womply (ranked on its billings and covered in its own piece), JPMorgan Chase, Bank of America, Blueacorn, Cross River Bank, Wells Fargo and PNC. That is fees owed, before the cost of the staff and systems that made the loans, which no Truist filing we read discloses.
Truist's table gives PPP revenue by quarter, with the loans' average balances and yields:
| Quarter | PPP revenue | Average PPP loans | Yield |
|---|---|---|---|
| 2Q20 | $55 million | $8.7 billion | 2.6% |
| 3Q20 | $78 million | $12.1 billion | 2.6% |
| 4Q20 | $108 million | $11.8 billion | 3.6% |
| 1Q21 | $132 million | $10.0 billion | 5.3% |
| 2Q21 | $124 million | $8.7 billion | 5.7% |
| 3Q21 | $85 million | $4.7 billion | 7.2% |
| 4Q21 | $55 million | $2.7 billion | 8.0% |
| 1Q22 | $34 million | $1.6 billion | 8.5% |
| 2Q22 | $21 million | $0.9 billion | 8.8% |
The nine quarters add to $692 million. A PPP loan paid 1 percent interest, so everything above 1 percent in the yield column is fee income, recognized as the loans were repaid or forgiven. Truist's fourth-quarter 2020 earnings release credits "accelerated fee income recognition on PPP loan payoffs" for higher loan yields. At 1 percent, the average balances in the table earn about $153 million of interest over the nine quarters. That leaves about $539 million of fees recognized through June 2022, net of any origination costs Truist deferred against them, with $0.7 billion of loans still on the books. The split is our arithmetic; Truist did not publish one. It lands within $50 million of the model, which counts fees owed on every loan in the SBA file, including the ones still outstanding.
II. Who paid Truist, and for what
The SBA paid the lender of record a processing fee on every PPP loan and guaranteed the loan in full. For 2020 loans the fee was 5 percent of loans up to $350,000, 3 percent up to $2 million and 1 percent above that (85 FR 20811). For 2021 loans of $50,000 or less, the fee became the lesser of 50 percent of the loan or $2,500 (86 FR 3692; 86 FR 3712).
Say a dental practice borrowed $1 million from Truist in April 2020. The SBA paid Truist 3 percent, $30,000. A florist who borrowed $20,000 the same week brought in $1,000. Had the florist come back in February 2021, the same $20,000 would have paid $2,500.
Truist made bigger loans. Its PPP loans averaged $137,401; JPMorgan Chase's averaged about $94,700, Bank of America's about $70,100 and Wells Fargo's $49,080 (PPP per-lender totals). Bigger loans paid lower rates, so Truist's book came to 3.6 cents in modeled fees per dollar lent, against 4.1 cents at JPMorgan, 4.3 at Bank of America and 5.0 at Wells Fargo. Capital Plus Financial lent $6.2 billion, 38 percent of Truist's $16.2 billion, and on the same model was owed $937.3 million.
The split by size shows where Truist's fees came from:
| Truist loans by size | Loans | Share of loans | Modeled fees | Share of fees |
|---|---|---|---|---|
| $50,000 or less | 69,237 | 58.7% | $104.8M | 17.8% |
| $50,000 to $350,000 | 39,181 | 33.2% | $251.4M | 42.7% |
| $350,000 to $2 million | 8,570 | 7.3% | $195.8M | 33.3% |
| $2 million and up | 968 | 0.8% | $36.5M | 6.2% |
Loans above $350,000 were 8.1 percent of Truist's loans and 39.5 percent of its modeled fees. At JPMorgan the same loans were 4.8 percent of loans and 28.8 percent of fees; at Wells Fargo, 1.7 percent and 14.9 percent. The 2021 small-loan rule did less for Truist than for the program as a whole: its 2021 loans came to 4.9 cents per dollar, against 7.4 cents for all 2021 PPP loans (Truist lender page; fee schedules by vintage).
III. A merger in its first spring
BB&T and SunTrust merged on December 6, 2019 (2020 Annual Report on Form 10-K). The PPP opened four months later, on April 3, 2020. Truist "created an online, automated process for the Paycheck Protection Program and began to accept applications during the first weekend of the program" (Form 10-Q, March 31, 2020). It took applications only from existing customers with business banking accounts, a limit it shared with PNC among the eight institutions a House subcommittee examined. Truist told the subcommittee's staff it later let clients apply through retail accounts used for business (House Select Subcommittee on the Coronavirus Crisis, "Underserved and Unprotected," October 2020, pp. 6–7).
The first round ran out of money on April 16. Truist's first-quarter slides, dated to authorizations as of April 17, reported loans "Authorized for 32K companies," an "Average loan amount of $323,000" and "Expected funding of approximately $10 billion" (1Q20 earnings presentation). The SBA file, which omits loans canceled since, shows 30,653 Truist loans approved from April 6 through April 16, for $8.86 billion, averaging $289,157. JPMorgan Chase, with nearly four times Truist's eventual loan count, had 25,993 approved by the same date; Bank of America had 9,056 (SBA loan-level data, our count).
Those two weeks decided most of Truist's program. Loans approved by April 16 were 38.1 percent of its 2020 loans and 70.6 percent of its 2020 dollars. On the model they brought in $258.1 million, 43.9 percent of everything the SBA owed Truist across both years. At JPMorgan, round one was 9.3 percent of 2020 loans; at PNC, 27.8 percent.
The integration carried on around the program. In 2020 Truist recorded $860 million of merger-related and restructuring charges and $534 million of incremental operating expenses related to the merger (2020 Annual Report). Heritage BB&T clients moved onto Truist's systems in October 2021, and about 7 million heritage SunTrust clients in February 2022 (2021 Annual Report; 4Q21 and 1Q22 earnings presentations). Truist's last PPP loan in the SBA file was approved in June 2021.
Its borrowers were in the Southeast and the Mid-Atlantic: Florida had 30,285 of its loans, North Carolina 22,158, Georgia 15,633 and Virginia 15,459, together 70.8 percent of the total.
IV. The queue, in a committee table and one lawsuit
On June 15, 2020, the House Select Subcommittee on the Coronavirus Crisis wrote to Kelly King, Truist's chairman and chief executive, that it was "investigating whether implementation of the Paycheck Protection Program (PPP) has favored large, well-funded companies over struggling small businesses in underserved communities" (letter to Kelly S. King, June 15, 2020). Its staff report in October used loan data Truist's counsel supplied, as of July 31, 2020:
| Truist, average days from application to funding | Days |
|---|---|
| Loans over $5 million | 17.9 |
| Over $1 million to $5 million | 19.3 |
| Over $100,000 to $1 million | 23.5 |
| $100,000 and under | 35.5 |
| Applicants with more than 100 employees | 19.5 |
| 6 to 100 employees | 30.1 |
| 5 employees or fewer | 33.5 |
The report grouped Truist with JPMorgan and PNC as lenders that "processed their largest loans at approximately twice the speed of the smallest loans" ("Underserved and Unprotected," pp. 5 and 15). The fee schedule paid $50,000 on a $5 million loan and $5,000 on a $100,000 one. In the SBA file, Truist's round one leaned toward big loans about as much as the program's did. Of its 2020 loans of $2 million or more, 87.1 percent were approved by April 16; of those of $50,000 or less, 25.2 percent. Program-wide the figures were 77.5 percent and 21.4 percent.
Truist's 2020 annual report says it "has been named in several lawsuits relating to its participation in the PPP." In the federal records we found, the class actions were about agent fees, and none was about the order of Truist's queue. Agents who helped borrowers apply sued lenders for a share of the SBA fee. Sport & Wheat, which the court called "apparently the first" of at least 50 such cases, named Truist with three other lenders; the share it claimed from Truist was $1,875.57 (order dismissing amended complaint). The court's answer to whether agents were entitled to any of the fees was "The short answer is 'no.'" It dismissed the case with prejudice on September 4, 2020 (case record).
A class action against Truist alone, filed in Orange County, Florida, and moved to federal court by Truist, was dismissed without prejudice on October 6, 2020 and closed that month (Steven L. Steward & Associates, P.A. v. Truist Bank, M.D. Fla. No. 6:20-cv-01083, Dkts. 1 and 30). Truist was also named in agent suits in Georgia and North Carolina (Alliant CPA Group v. Bank OZK, N.D. Ga.; Fisher, P.A. v. Bank of America, W.D.N.C.). When one plaintiff asked for all the agent cases to be combined, Truist proposed a Truist-only proceeding if the panel centralized them; the panel refused on August 5, 2020 (order denying transfer; The Agents Got Nothing).
One borrower did sue over the queue, in the second round. Ironworks Development had received a first-round loan through Truist. It alleges that Truist "rejected" its January 2021 application for a second one, then offered to process a smaller loan of $976,896.24, and that accepting the offer kept it from applying to any other lender. Truist's offer letter of February 17, 2021 had warned that "the funding for the Paycheck Protection Program is limited and being processed by the SBA on a 'first-come, first-served' basis," as the court's opinion quotes it. A hold code then appeared, and Ironworks alleges that clearing it required Truist to "check and select 'Submit Lender Certification,'" that Truist did not, that an underwriter told it the application was "currently with the SBA for approval," and that the March 31, 2021 deadline passed without a loan. In September 2022 the court let a breach-of-contract claim proceed and denied leave to plead fraud (Ironworks Development, LLC v. Truist Bank, W.D. Va. No. 3:21-cv-00032, Dkt. 52, Sept. 30, 2022). The docket records a settlement conference in June 2023, and the case closed on November 13, 2023.
V. What Truist said
"Third largest PPP lender based on gross fundings" (Form 10-Q, June 30, 2020). From the next quarter it was "fourth largest," which is where the SBA file puts it by dollars. By loan count it was 19th.
"Nearly $13 billion in PPP funding helping more than 80,000 companies protect nearly three million jobs" (4Q20 earnings presentation, January 2021). The SBA file shows 80,445 Truist loans in 2020, for $12.55 billion. Their borrowers reported 1,407,610 jobs.
"Approximately $17 billion across nearly 120,000 loans," supporting "over 2 million jobs" (William H. Rogers, Jr., chairman and chief executive, written statement to the House Financial Services Committee, Sept. 21, 2022). The borrowers on all 117,956 loans reported 1,837,734 jobs. With 37,511 more loans in the count, Truist's jobs figure had gone from nearly three million to over two million.
"Approximately 75% of Truist's PPP loans were in amounts at or less than $100,000" (the same statement). In the SBA file, 74.6 percent were. Those loans came to 29.2 percent of Truist's modeled fees.
The committee's first question asked for a summary of the bank's activity in the pandemic programs and told it to "detail any funds received from such activity." Truist's answer covered loans, dollars, jobs, low- and moderate-income lending and more than $50 million of philanthropy. It gave no fee or revenue figure. The $692 million had been in its own earnings presentations, in an appendix headed "PPP details."
"Truist has not indicated that it plans to donate any net proceeds from PPP loan processing," Forbes Advisor reported on July 10, 2020, in a survey of what large lenders said they would do with their fees. In the same survey, Forbes reported that Wells Fargo would give away nearly $400 million in fees, and quoted a Bank of America spokesperson: the bank would use "the net proceeds of fees from the Paycheck Protection Program" to support small businesses and communities. We found no Truist pledge in its filings from 2020 through 2022. The same Forbes entry pointed to Truist Cares, a philanthropy program launched that March, which King described in July as "doubling our Truist Cares relief efforts to $50 million to reach underserved communities in our footprint" (second-quarter 2020 earnings release). Truist's PPP revenue for 2020 was $241 million.
Method, and what would change the numbers
Modeled fees. Each loan in the SBA's PPP loan-level file (release of September 30, 2024) is priced under the fee rule for its approval date and draw; loans are counted by approval year. The model assumes the SBA paid a fee on every loan in the file. Fees on loans later canceled or reduced may not have been paid in full, so the modeled figures are fees owed, not received.
Round-one counts. Loans approved from April 3 through April 16, 2020, by the SBA's approval date, among loans still in the September 2024 file. Loans canceled before then are not in the file, so these counts are a floor. Truist's earliest approvals in the file are dated April 6.
Truist's revenue figures. PPP revenue, yields and average balances are quoted from the "PPP details" appendix of Truist's 4Q21, 1Q22 and 2Q22 earnings presentations; the 2Q20 through 1Q22 rows are identical across the three. The interest-and-fee split is our arithmetic: average balance times 1 percent, divided by four, for each quarter.
What is not public. Truist's cost of processing its PPP loans; its PPP fees on their own; its PPP revenue after June 2022; and the outcome of the Ironworks case.
Sources: SBA PPP loan-level data (Sept. 30, 2024), priced under 85 FR 20811, 86 FR 3692 and 86 FR 3712 (Truist lender page; PPP lenders by estimated fees; PPP per-lender totals; fee schedules by vintage); Truist Financial Corporation Forms 10-Q for the quarters ended March 31, June 30 and Sept. 30, 2020; 2020 and 2021 Annual Reports on Form 10-K; second- and fourth-quarter 2020 earnings releases and 1Q20, 4Q20, 4Q21, 1Q22 and 2Q22 earnings presentations (Form 8-K exhibits); House Select Subcommittee on the Coronavirus Crisis, letter to Kelly S. King (June 15, 2020) and "Underserved and Unprotected" (October 2020); William H. Rogers, Jr., written statement to the House Financial Services Committee (Sept. 21, 2022); Robin Saks Frankel, "Banks Made Billions On PPP Loans. Learn What They're Doing With The Cash," Forbes Advisor (July 10, 2020); Sport & Wheat, CPA, PA v. ServisFirst Bank, Inc., N.D. Fla. No. 3:20-cv-05425 (order, case record); In re Paycheck Protection Program (PPP) Agent Fees Litigation, MDL No. 2950 (order denying transfer); Steven L. Steward & Associates, P.A. v. Truist Bank, M.D. Fla. No. 6:20-cv-01083, Dkt. 1 (notice of removal, June 18, 2020) and Dkt. 30 (Oct. 6, 2020); Fisher, P.A. v. Bank of America, N.A., W.D.N.C. No. 3:20-cv-00405, Dkt. 1 (complaint, July 21, 2020); Ironworks Development, LLC v. Truist Bank, W.D. Va. No. 3:21-cv-00032, Dkt. 52 (Sept. 30, 2022) and docket; Alliant CPA Group, LLC v. Bank OZK, N.D. Ga. No. 1:20-cv-02026. Related: How Much Did Womply Make From Pandemic Relief?; The Banks Served Their Own Customers First, and Courts Shrugged