10-QPeriod: Q1 FY2015

TRUIST FINANCIAL CORP Quarterly Report for Q1 Ended Mar 31, 2015

Filed April 27, 2015For Securities:TFCTFC-POTFC-PRTFC-PI

Summary

Truist Financial Corp (TFC), formerly BB&T Corporation, reported its first quarter 2015 results, showing a slight decrease in net income available to common shareholders to $488 million, or $0.67 per diluted share, compared to $496 million, or $0.68 per diluted share, in the first quarter of 2014. Total revenues saw a modest increase to $2.3 billion, driven by a $70 million rise in noninterest income, largely from mortgage banking and insurance services, which offset a $36 million decrease in taxable-equivalent net interest income. The company experienced a slight decline in net interest margin to 3.33% from 3.52% year-over-year, attributed to lower earning asset yields and the runoff of higher-yielding FDIC-acquired loans, despite improved funding costs. Noninterest expense rose by $37 million, primarily due to an increase in personnel costs and other expenses. Asset quality showed continued improvement, with nonperforming assets decreasing and net charge-offs declining. Truist Financial Corp also announced its capital plan was accepted by the Federal Reserve, including a proposed dividend increase to $0.27 per share and authorization for share buybacks up to $820 million. The company completed an acquisition of 41 bank branches in Texas, adding significant deposits and other assets.

Financial Highlights

37 data points
Beta

Net Income

$547.00M

EPS (Diluted)

$0.67

Total Assets

$189.23B

Cash & Equivalents

$2.00B

Free Cash Flow

-$593.00M

Financial Statements
Beta
Interest Expense$181.00M
Net Income$547.00M
EPS (Basic)$0.68
EPS (Diluted)$0.67
Shares Outstanding (Basic)721.64M
Shares Outstanding (Diluted)731.51M

Key Highlights

  • 1Net income available to common shareholders decreased slightly to $488 million ($0.67/share) from $496 million ($0.68/share) year-over-year.
  • 2Total revenues increased to $2.3 billion, with noninterest income up $70 million, driven by mortgage banking and insurance services.
  • 3Net interest margin compressed to 3.33% from 3.52% due to lower asset yields and FDIC-acquired loan runoff, despite better funding costs.
  • 4Noninterest expense increased by $37 million, mainly due to higher personnel and other expenses.
  • 5Asset quality improved, with a decrease in nonperforming assets and lower net charge-offs.
  • 6Company's capital plan accepted by the Federal Reserve, proposing a dividend increase and share buybacks.
  • 7Completed the acquisition of 41 bank branches in Texas, adding $1.9 billion in deposits.

Frequently Asked Questions

The decrease in net interest margin to 3.33% from 3.52% was primarily driven by lower earning asset yields and the continued runoff of higher yielding loans acquired from the FDIC. This was partially offset by improved funding costs.

Noninterest income increased by $70 million, primarily driven by strong performance in mortgage banking income (up $36 million) and insurance income (up $13 million). This suggests a positive trend in fee-based revenue streams.

Asset quality continued to improve. Nonperforming assets (NPAs) decreased, and net charge-offs declined significantly compared to the prior year. The Allowance for Loan and Lease Losses (ALLL) as a percentage of loans and leases held for investment remained stable at approximately 1.22%.

Truist Financial Corp announced that its capital plan was accepted by the Federal Reserve. This plan includes a proposed increase in the quarterly dividend from $0.24 to $0.27 and an authorization for cumulative share buybacks of up to $820 million, expected to begin in the third quarter of 2015.