10-KPeriod: FY2016

TRUIST FINANCIAL CORP Annual Report, Year Ended Dec 31, 2016

Filed February 21, 2017For Securities:TFCTFC-POTFC-PRTFC-PI

Summary

Truist Financial Corporation (TFC), formerly BB&T, reported solid performance for the year ended December 31, 2016. Net income available to common shareholders increased by 16.7% year-over-year to $2.3 billion, with diluted EPS of $2.77. The company successfully integrated major acquisitions, including National Penn for $1.6 billion and Swett & Crawford for $461 million, contributing to a 11.3% increase in total noninterest income. Despite an increase in the provision for credit losses, largely due to energy sector exposure, the company maintained strong capital ratios and a healthy net interest margin. Management highlighted a focus on organic growth, dividends, and strategic acquisitions. The company navigated a complex regulatory environment, including the Dodd-Frank Act and Basel III capital requirements, while also managing operational risks related to cybersecurity. The report also indicates a proactive approach to risk management through its 'three lines of defense' model. Overall, the filing suggests a stable financial institution focused on client service and strategic growth.

Financial Highlights

38 data points
Beta

Net Income

$2.44B

EPS (Diluted)

$2.77

Total Assets

$219.28B

Cash & Equivalents

$4.28B

Free Cash Flow

$3.12B

Financial Statements
Beta
Interest Expense$745.00M
Net Income$2.44B
EPS (Basic)$2.81
EPS (Diluted)$2.77
Shares Outstanding (Basic)804.68M
Shares Outstanding (Diluted)814.92M

Key Highlights

  • 1Net income available to common shareholders increased 16.7% to $2.3 billion.
  • 2Diluted Earnings Per Share (EPS) was $2.77, up from $2.56 in the prior year.
  • 3Completed significant acquisitions: National Penn for $1.6 billion and Swett & Crawford for $461 million.
  • 4Total noninterest income grew 11.3% to $4.5 billion, driven by insurance and FDIC loss share income improvements.
  • 5Net Interest Margin (NIM) improved to 3.39% from 3.32% in the prior year.
  • 6Provision for credit losses increased to $572 million from $428 million, mainly due to energy credits.
  • 7The company maintained strong capital ratios, with CET1 ratio at 10.2% at year-end 2016.

Frequently Asked Questions

BB&T completed two significant acquisitions in 2016: National Penn for a total consideration of $1.6 billion and the insurance broker Swett & Crawford for $461 million in cash.

The provision for credit losses increased to $572 million in 2016 from $428 million in 2015. This increase was primarily attributed to higher provisions related to energy credits.

BB&T's capital deployment strategy prioritizes organic growth, followed by dividends, and then acquisitions and share repurchases, depending on market opportunities and the company's ability to proceed.

BB&T is subject to extensive regulation under the Dodd-Frank Act and Basel III, which have led to increased compliance requirements and costs. These regulations influence capital planning, stress testing, and overall business operations. The company has made substantial investments in personnel and infrastructure to comply with these regulations.