10-QPeriod: Q2 FY2019

TRUIST FINANCIAL CORP Quarterly Report for Q2 Ended Jun 30, 2019

Filed July 31, 2019For Securities:TFCTFC-POTFC-PRTFC-PI

Summary

Truist Financial Corporation (TFC), formerly BB&T Corporation, reported solid financial results for the second quarter and first half of 2019. The company saw growth in net interest income and noninterest income, driven by factors such as loan growth, increased insurance income (partially due to acquisitions), and strong investment banking and brokerage fees. Net income available to common shareholders increased year-over-year, reflecting improved profitability. The most significant event impacting the company is the pending merger of equals with SunTrust Banks, Inc., which received regulatory approval during the quarter and shareholder approval in July 2019. The combined entity will operate under the name Truist Financial Corporation. While the merger progresses, BB&T has suspended its share repurchase program. The company also announced a proposal to increase its quarterly common dividend, signaling confidence in its financial health and future prospects.

Financial Highlights

37 data points
Beta

Net Income

$885.00M

EPS (Diluted)

$1.09

Total Assets

$230.87B

Cash & Equivalents

$2.55B

Free Cash Flow

$934.00M

Financial Statements
Beta
Interest Expense$516.00M
Net Income$885.00M
EPS (Basic)$1.10
EPS (Diluted)$1.09
Shares Outstanding (Basic)765.96M
Shares Outstanding (Diluted)774.60M

Key Highlights

  • 1Net income available to common shareholders increased to $842 million for Q2 2019, up from $775 million in Q2 2018.
  • 2Diluted EPS was $1.09 for Q2 2019, an increase from $0.99 in Q2 2018.
  • 3Total revenues (Tax-Equivalent basis) for Q2 2019 were $3.1 billion, up $165 million year-over-year.
  • 4Noninterest income rose by $130 million in Q2 2019, largely driven by a $85 million increase in insurance income and strong performance in investment banking and brokerage fees.
  • 5The company received regulatory approval for the merger with SunTrust Banks, Inc. in July 2019, with shareholder approval also obtained in July 2019.
  • 6BB&T proposed an 11.1% increase in its quarterly common dividend to $0.45 per share.
  • 7The provision for credit losses increased to $172 million in Q2 2019, up from $135 million in Q2 2018, reflecting an increase in net charge-offs.

Frequently Asked Questions

The merger agreement between BB&T and SunTrust was approved by both companies' Boards of Directors and subsequently by shareholders in July 2019. Regulatory approval from the NCCOB was received in July 2019, with the expectation that the merger would close in late Q3 or Q4 2019, subject to remaining regulatory approvals. The combined entity will operate as Truist Financial Corporation.

Net income available to common shareholders increased to $842 million in the second quarter of 2019, up from $775 million in the second quarter of 2018. Diluted earnings per share also rose to $1.09 from $0.99 over the same period. This improvement was driven by higher net interest income and a significant increase in noninterest income.

The primary driver for the increase in noninterest income was a substantial rise in insurance income, partly due to acquisitions and higher production. Investment banking and brokerage fees and commissions also contributed positively, along with an increase in mortgage banking income, which was influenced by valuation adjustments on mortgage servicing rights.

BB&T announced a proposal to increase its quarterly common dividend by 11.1% to $0.45 per share. The company has suspended its share repurchase program due to the pending merger with SunTrust.