10-QPeriod: Q2 FY2022

TRUIST FINANCIAL CORP Quarterly Report for Q2 Ended Jun 30, 2022

Filed August 1, 2022For Securities:TFCTFC-POTFC-PRTFC-PI

Summary

Truist Financial Corporation (TFC) reported its financial results for the second quarter ending June 30, 2022. The company demonstrated resilience in a volatile market, driven by broad-based loan growth and an expanded net interest margin, benefiting from rising interest rates and a strong deposit franchise. Despite a slight year-over-year decrease in net income available to common shareholders, primarily due to a favorable provision for credit losses in the prior year, TFC's operational performance remained robust. Key financial indicators show a healthy balance sheet with total assets increasing to $545.1 billion. The company maintained strong capital and liquidity levels, with a CET1 ratio of 9.2% and an average LCR of 110%. Management highlighted strategic investments in talent and technology to drive future growth and expressed confidence in the company's ability to perform across different economic environments, supported by a diverse business mix and solid capital position. Following positive CCAR stress test results, Truist announced an 8% increase in its quarterly cash dividend.

Financial Highlights

36 data points
Beta

Net Income

$1.53B

EPS (Diluted)

$1.09

Total Assets

$545.12B

Cash & Equivalents

$23.11B

Free Cash Flow

$3.96B

Financial Statements
Beta
Interest Expense$266.00M
Net Income$1.53B
EPS (Basic)$1.09
EPS (Diluted)$1.09
Shares Outstanding (Basic)1.33B
Shares Outstanding (Diluted)1.34B

Key Highlights

  • 1Total assets grew to $545.1 billion by June 30, 2022, a 0.7% increase from December 31, 2021.
  • 2Net income available to common shareholders was $1.5 billion for Q2 2022, a 6.7% decrease year-over-year, primarily due to a benefit in the provision for credit losses in Q2 2021.
  • 3Diluted EPS was $1.09 for Q2 2022, down from $1.16 in Q2 2021.
  • 4Net interest income increased by 4.9% year-over-year to $3.4 billion for Q2 2022, driven by higher interest rates and deposit costs management.
  • 5Net interest margin (NIM) improved slightly to 2.89% in Q2 2022 compared to 2.88% in Q2 2021.
  • 6Total noninterest income decreased by 6.5% year-over-year to $2.3 billion for Q2 2022, largely impacted by lower investment banking and trading income.
  • 7Total noninterest expense decreased by 11% year-over-year to $3.6 billion for Q2 2022, primarily due to lower merger-related and restructuring charges.

Frequently Asked Questions

The primary driver for the decrease in net income available to common shareholders in the second quarter of 2022 compared to the prior year was a benefit recognized in the provision for credit losses in the second quarter of 2021, which is not present in the current quarter. This means the prior year benefited from a release of previously set-aside reserves due to an improving credit environment, making the year-over-year comparison appear lower in the current period.

Rising interest rates positively impacted Truist's NII, which increased by 4.9% year-over-year to $3.4 billion in Q2 2022. This was attributed to higher market interest rates combined with well-controlled deposit costs and growth in the securities portfolio. The Net Interest Margin (NIM) also saw a slight improvement, rising to 2.89% in Q2 2022 from 2.88% in Q2 2021.

Truist maintained strong capital and liquidity levels. The Common Equity Tier 1 (CET1) ratio was 9.2% and the average Liquidity Coverage Ratio (LCR) was 110% as of June 30, 2022. Following a positive outcome in the 2022 CCAR stress test, Truist announced an 8% increase in its quarterly cash dividend to $0.52 per share, demonstrating confidence in its financial position and commitment to returning value to shareholders.

During the first quarter of 2022, Truist acquired Kensington Vanguard National Land Services, a national title insurance agency, which contributed approximately $198 million in goodwill and $138 million in identifiable intangible assets. No significant divestitures were noted in the provided period.