TRUIST FINANCIAL CORP Quarterly Report for Q3 Ended Sep 30, 2019

Summary

Truist Financial Corporation (TFC), formerly BB&T, reported its third-quarter 2019 financial results, showcasing solid performance amidst significant strategic developments. The company's total assets grew to $236.75 billion, up from $225.70 billion at the end of 2018. Net income available to common shareholders for the quarter was $735 million, or $0.95 per diluted share, a slight decrease from the prior year's quarter, reflecting merger-related expenses and preferred stock redemption costs. The most significant event during the period was the continued progress towards the merger of equals with SunTrust Banks, Inc., announced in February 2019 and expected to close in the fourth quarter of 2019. This merger will create a leading financial institution in the U.S. The company also managed its balance sheet effectively, with net interest income seeing a modest increase driven by loan growth and higher interest rates, while noninterest income grew due to strong performance in insurance and mortgage banking. Management highlighted the company's commitment to capital strength and shareholder returns, including a dividend declaration and the suspension of share repurchases due to the pending merger. The company maintained strong capital ratios and liquidity, positioning it well for the integration and future growth opportunities. Investors should monitor the successful completion of the merger and the ensuing integration process, as well as the ongoing management of interest rate risk and credit quality.

Key Highlights

• 1Total assets increased to $236.75 billion as of September 30, 2019, up from $225.70 billion at December 31, 2018.
• 2Net income available to common shareholders for Q3 2019 was $735 million ($0.95 diluted EPS), down from $789 million ($1.01 diluted EPS) in Q3 2018.
• 3The company is actively progressing towards the merger of equals with SunTrust Banks, Inc., with regulatory approvals and shareholder votes secured, and closure expected in Q4 2019.
• 4Net interest income (tax-equivalent) for Q3 2019 increased slightly to $1.70 billion from $1.69 billion in Q3 2018, driven by higher loan yields and growth.
• 5Noninterest income grew by 5.2% to $1.30 billion in Q3 2019, primarily due to strong insurance income and mortgage banking income.
• 6Noninterest expense increased by 5.6% to $1.84 billion in Q3 2019, impacted by merger-related charges and incremental operating expenses.
• 7Total shareholders' equity grew to $32.3 billion, supported by retained earnings and preferred stock issuance, partially offset by redemptions and dividends.

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