10-QPeriod: Q3 FY2012

TRUIST FINANCIAL CORP Quarterly Report for Q3 Ended Sep 30, 2012

Filed November 2, 2012For Securities:TFCTFC-POTFC-PRTFC-PI

Summary

Truist Financial Corporation (TFC), formerly BB&T Corporation, reported a significant increase in net income available to common shareholders for the third quarter of 2012, reaching $469 million, a 28.1% rise from $366 million in the same period of 2011. This translated to diluted earnings per share of $0.66, up from $0.52 in the prior year. The company saw total revenues increase to $2.5 billion, driven by a $66 million rise in taxable-equivalent net interest income, largely due to a substantial decrease in funding costs. This was complemented by a strong performance in noninterest income, which grew by $273 million, primarily fueled by higher insurance income (including contributions from the Crump Group acquisition) and increased mortgage banking income. Asset quality continued to improve, with nonperforming assets decreasing for the tenth consecutive quarter. The acquisition of BankAtlantic in July 2012 expanded BB&T's presence in Florida, adding $1.8 billion in loans and $3.5 billion in deposits. The company's capital ratios remained robust, well above regulatory standards, supported by recent preferred stock issuances.

Financial Highlights

39 data points
Beta

Net Income

$469.00M

EPS (Diluted)

$0.66

Total Assets

$182.02B

Cash & Equivalents

$3.50B

Free Cash Flow

-$5.00M

Financial Statements
Beta
Interest Expense$237.00M
Net Income$469.00M
EPS (Basic)$0.67
EPS (Diluted)$0.66
Shares Outstanding (Basic)699.09M
Shares Outstanding (Diluted)709.88M

Key Highlights

  • 1Net income available to common shareholders increased 28.1% year-over-year to $469 million in Q3 2012.
  • 2Diluted earnings per share rose to $0.66 from $0.52 in the prior year's third quarter.
  • 3Total revenues grew to $2.5 billion, driven by higher net interest income and a significant increase in noninterest income ($273 million increase).
  • 4Noninterest income was bolstered by a $92 million increase in insurance income (including acquisitions) and an $88 million increase in mortgage banking income.
  • 5Provision for credit losses remained stable year-over-year, while net charge-offs (excluding covered loans) decreased, reflecting improved credit quality.
  • 6Nonperforming assets continued their decline for the tenth consecutive quarter, reaching their lowest level since Q3 2008.
  • 7BB&T completed the acquisition of BankAtlantic on July 31, 2012, expanding its Florida market presence.

Frequently Asked Questions

BB&T's profitability saw a significant increase. Net income available to common shareholders rose by 28.1% to $469 million, and diluted earnings per share grew to $0.66 from $0.52 in the prior year's third quarter. This improvement was driven by lower funding costs, higher noninterest income, and reduced foreclosed property expenses.

The substantial increase in noninterest income was primarily driven by a $92 million rise in insurance income, which benefited from acquisitions like Crump Group Inc., and an $88 million increase in mortgage banking income, reflecting wider margins and higher loan originations. Other income also contributed positively due to lower net securities losses and write-downs on commercial loans compared to the prior year.

BB&T's asset quality continued to improve. Nonperforming assets, excluding covered assets, decreased by 29.9% from the end of 2011 and marked the tenth consecutive quarterly decline, reaching their lowest point since Q3 2008. Net charge-offs also decreased compared to the prior year, indicating better credit quality across the portfolio.

The acquisition of BankAtlantic, completed on July 31, 2012, expanded BB&T's presence in the Southeast Florida market. It added approximately $1.8 billion in loans and $3.5 billion in deposits to the company's balance sheet. The acquisition also contributed to increased personnel expenses and merger-related charges in the third quarter of 2012.