01—Abstract
Summary
Summary of the 10-K filed March 3, 2020. Cited figures are marked; the original filing is the authoritative source.
Truist Financial Corporation's (TFC) 2019 10-K filing details the significant completion of its merger with SunTrust, effective December 6, 2019.
This transformative event has created a larger, more diversified financial institution. The report highlights the integration of the two entities, the strategic goals of the combined company, and the operational changes undertaken. While the merger offers significant potential synergies and an expanded market position, the company also faces integration risks and substantial expenses associated with combining systems, operations, and cultures.
Financially, for the year ended December 31, 2019, Truist reported net income available to common shareholders of $3.0 billiona, a slight decrease from the prior year, with diluted EPS at $3.71. Revenue increased year-over-year on a taxable equivalent basis, driven by higher net interest income due to increased average loans and securities, although net interest margin slightly decreased. Noninterest income saw growth, primarily from insurance and investment banking, partially offset by securities losses.
Noninterest expense increased substantially, largely due to merger-related and restructuring charges, as well as incremental operating expenses from the merger. Capital ratios remain robust, with CET1 at 9.5%b for the consolidated entity.
02—Key points
Key Highlights
- Completed merger with SunTrust on December 6, 2019, creating a significantly larger financial institution.
- Net income available to common shareholders was $3.0 billion, or $3.71 per diluted share, for 2019.
- Total revenue (taxable equivalent) increased by $1.0 billion to $12.7 billion, driven by growth in earning assets and higher yields.
- Noninterest expense increased by $1.0 billion, primarily due to $360 million in merger-related and restructuring charges and $164 million in incremental merger operating expenses.
- Total assets grew substantially to $473.1 billion post-merger, with total deposits reaching $334.7 billion.
- Capital ratios remain strong, with CET1 capital at 9.5% for Truist Financial Corporation as of December 31, 2019.
- The company is focused on integrating systems and operations while navigating the associated expenses and risks, aiming to achieve merger synergies.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2019filed March 3, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Interest Expense | $2.10B$1.44B | +45.8% |
| Net Income | $3.24B$3.26B | −0.6% |
| EPS (Basic) | $3.76$3.96 | −5.1% |
| EPS (Diluted) | $3.71$3.91 | −5.1% |
| Shares Outstanding (Basic) | 805.10M772.96M | +4.2% |
| Shares Outstanding (Diluted) | 815.20M783.48M | +4.0% |
05—Questions
Frequently Asked Questions
What was the most significant event for Truist Financial Corporation in 2019?
The most significant event was the completion of the merger with SunTrust Banks, Inc. on December 6, 2019. This merger created the sixth-largest commercial bank in the U.S. and led to the rebranding of the company as Truist Financial Corporation.
How did the merger impact the company's financial results?
The merger significantly impacted the financial results, leading to a substantial increase in total assets and deposits. It also resulted in increased noninterest expenses due to merger-related and restructuring charges, as well as incremental operating costs associated with integration. While net income available to common shareholders saw a slight decrease, revenue growth was positive.
What are the key challenges Truist faces following the merger?
Key challenges include successfully integrating the systems and operations of BB&T and SunTrust, realizing anticipated synergies and cost savings, retaining key personnel, and managing the associated integration expenses. The company also faces ongoing challenges of navigating global economic and geopolitical risks and adapting to an intensely competitive environment.
What is Truist's capital position as of December 31, 2019?
Truist maintained strong capital ratios post-merger. The Common Equity Tier 1 (CET1) capital ratio was 9.5%, the Tier 1 capital ratio was 10.8%, and the Total capital ratio was 12.6% for Truist Financial Corporation. The company's management aims to maintain capital levels above regulatory minimums and internal targets.
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