Summary
Truist Financial Corporation (TFC), formerly BB&T Corporation, reported a significant decrease in net income for the third quarter of 2013 compared to the prior year, largely due to a substantial income tax adjustment of $235 million related to an unfavorable U.S. Court of Federal Claims ruling on a past financing transaction. Excluding this one-time item, the adjusted net income and earnings per share showed a more stable, albeit lower, performance, reflecting pressures on net interest margin and mortgage banking income. The company's financial condition remains robust, with strong capital ratios well above regulatory requirements. Asset quality showed continued improvement, with nonperforming assets reaching their lowest level since 2007. Deposits saw a favorable shift towards noninterest-bearing accounts, although total average deposits decreased quarter-over-quarter. Management expects a modest pace of improvement in asset quality and anticipates a slight decrease in net interest margin in the upcoming quarter due to lower yields and loan runoff.
Financial Highlights
38 data points| Interest Expense | $222.00M |
| Net Income | $309.00M |
| EPS (Basic) | $0.38 |
| EPS (Diluted) | $0.37 |
| Shares Outstanding (Basic) | 704.13M |
| Shares Outstanding (Diluted) | 716.10M |
Key Highlights
- 1Net income available to common shareholders for Q3 2013 was $268 million, down 42.9% from $469 million in Q3 2012, heavily impacted by a $235 million income tax adjustment.
- 2Excluding the tax adjustment, adjusted diluted EPS was $0.70, and adjusted annualized return on average common equity was 10.22%, indicating underlying operational challenges and a decline from the prior year.
- 3Total revenues decreased by $124 million year-over-year, driven by lower taxable-equivalent net interest income (-$66 million) and noninterest income (-$58 million).
- 4Net Interest Margin (NIM) declined to 3.68% from 3.94% in the prior year's quarter, primarily due to lower yields on new loans and securities and the runoff of covered loans.
- 5Nonperforming assets (NPAs) continued to improve, falling to 0.65% of total assets (excluding covered assets), the lowest level since 2007.
- 6Provision for credit losses decreased significantly by 63.1% year-over-year, reflecting improved credit quality and lower net charge-offs.
- 7Total shareholders' equity increased to $22.1 billion, supported by net income and preferred stock issuance, though partially offset by changes in Accumulated Other Comprehensive Income (AOCI).