How did the merger with SunTrust impact Truist's financial performance in Q2 2020?

The merger significantly impacted Truist's financial results in Q2 2020. It led to increases in total assets, loans, and deposits. However, it also resulted in higher merger-related expenses, amortization of intangibles, and a $235 million loss on early extinguishment of long-term debt. The integration efforts also contributed to the increase in the provision for credit losses and overall noninterest expense.

What is the company's outlook regarding the impact of COVID-19 on its operations?

Truist acknowledges that the COVID-19 pandemic has adversely impacted and will likely continue to impact its financial condition and results of operations. The company has seen increased provisions for credit losses, reduced fee income, and higher expenses due to the pandemic. Management is closely monitoring the situation and has implemented measures to support clients, employees, and communities, including substantial participation in the PPP and providing loan accommodations.

How is Truist managing its net interest margin in the current low-interest-rate environment?

Truist's net interest margin (NIM) decreased due to the low-interest-rate environment and COVID-19 related loan accommodations. The company is managing this by focusing on deposit growth and cost management. Average noninterest-bearing deposits increased, and the cost of interest-bearing deposits and borrowings decreased significantly, reflecting lower market rates and the company's efforts to manage funding costs.

What is the company's capital position and outlook?

Truist maintained strong capital ratios, with its CET1 ratio at 9.7% as of June 30, 2020. The company issued $2.6 billion of preferred stock during the quarter to further strengthen its capital position. Despite the economic uncertainty, Truist's capital levels remain robust, well above regulatory requirements, allowing it to support clients and operations.

TRUIST FINANCIAL CORP 10-Q Quarterly Report Q2 FY2020

Summary

Truist Financial Corporation (TFC) reported its second quarter 2020 results, marked by significant merger integration activities and the ongoing impact of the COVID-19 pandemic. The company saw a notable increase in total assets, driven by loan growth and higher balances held at the Federal Reserve. Despite a decline in net interest margin due to the low-interest-rate environment, overall revenue grew, supported by strong noninterest income streams, particularly in residential mortgage banking and insurance. The provision for credit losses saw a substantial increase, reflecting the economic stress from COVID-19 and the adoption of the CECL methodology. Truist maintained a strong capital and liquidity position throughout the quarter, taking proactive steps to support clients and teammates during the pandemic, including significant participation in the Paycheck Protection Program (PPP).

Financial Highlights

39 data points

Beta

Net Income

$958.00M

EPS (Diluted)

$0.67

Total Assets

$504.34B

Cash & Equivalents

$41.20B

Free Cash Flow

-$146.00M

Financial Statements

Beta

Interest Expense	$440.00M
Net Income	$958.00M
EPS (Basic)	$0.67
EPS (Diluted)	$0.67
Shares Outstanding (Basic)	1.35B
Shares Outstanding (Diluted)	1.36B

Key Highlights

1Total assets increased to $504.3 billion as of June 30, 2020, up from $473.1 billion at December 31, 2019, primarily due to loan growth and increased balances at the Federal Reserve.
2Net interest margin (NIM) decreased to 3.13% from 3.42% in the prior year's second quarter, impacted by the prevailing low interest rate environment and loan accommodations related to COVID-19.
3Provision for credit losses significantly increased to $844 million from $172 million in the prior year's second quarter, reflecting economic stress from the pandemic and the adoption of the CECL methodology.
4Noninterest income grew substantially to $2.4 billion from $1.3 billion in the prior year's second quarter, boosted by merger synergies, strong residential mortgage banking activity, and a $300 million gain from securities sales.
5The company participated heavily in the Paycheck Protection Program (PPP), with a carrying value of $12.0 billion in PPP loans as of June 30, 2020, ranking as the third-largest PPP lender.
6Truist provided loan accommodations to $35.2 billion of loans across commercial, consumer, and credit card portfolios in response to COVID-19.
7Capital ratios remained strong, with CET1 ratio at 9.7% as of June 30, 2020, demonstrating the company's ability to withstand economic pressures.

TRUIST FINANCIAL CORP Quarterly Report for Q2 Ended Jun 30, 2020

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions