TRUIST FINANCIAL CORP Quarterly Report for Q1 Ended Mar 31, 2010

Summary

Truist Financial Corp (TFC) reported a net income of $194 million for the first quarter of 2010, a decrease of 39.0% compared to $318 million in the same period of 2009. Diluted earnings per share were $0.27, down from $0.48 in the prior year. The decrease in profitability was primarily driven by lower noninterest income, particularly from mortgage banking activities and securities gains, as well as higher noninterest expenses related to foreclosed property and the Colonial transaction integration. However, net interest income saw a notable increase of 14.7% due to higher yields on acquired loans and lower deposit costs, leading to an improved net interest margin of 3.88%. The company's total assets slightly decreased to $163.7 billion, with loans and leases also declining to $104.4 billion. Total deposits saw a modest decrease to $113.7 billion. Asset quality showed mixed signals, with an increase in nonperforming assets, primarily driven by real estate-related lending, although the rate of increase slowed. Management noted that the integration of Colonial is progressing smoothly and exceeding expectations. The company's capital ratios remain strong and well above regulatory requirements.

Key Highlights

• 1Net income decreased by 39.0% to $194 million, and diluted EPS fell to $0.27 from $0.48 year-over-year.
• 2Net interest income increased by 14.7% to $1.3 billion, driven by higher yields on acquired loans and lower deposit costs.
• 3Net interest margin improved to 3.88%, up 31 basis points year-over-year.
• 4Noninterest income decreased by 18.1% to $844 million, largely due to lower mortgage banking income and securities gains.
• 5Noninterest expenses increased by 25.4% to $1.3 billion, impacted by higher foreclosed property expenses and Colonial integration costs.
• 6Total assets slightly decreased by 1.2% to $163.7 billion, and total loans and leases decreased by 1.7% to $104.4 billion.
• 7Nonperforming assets increased to $4.6 billion, representing 4.38% of total assets, up from $4.4 billion (4.07%) in the prior quarter.

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