10-QPeriod: Q3 FY2022

TRUIST FINANCIAL CORP Quarterly Report for Q3 Ended Sep 30, 2022

Filed October 31, 2022For Securities:TFCTFC-POTFC-PRTFC-PI

Summary

Truist Financial Corporation's (TFC) third-quarter 2022 results show a mixed financial performance. While the company experienced strong loan growth and significant net interest margin expansion driven by higher market interest rates, this was partially offset by a challenging market environment that impacted capital markets-related revenue. Net income available to common shareholders decreased by 5.0% year-over-year to $1.5 billion, resulting in diluted EPS of $1.15. The company demonstrated prudent risk management with excellent asset quality metrics, and maintained strong capital and liquidity levels, with a CET1 ratio of 9.1% and an average LCR of 111%. Strategic initiatives including the launch of "Truist One Banking" and "Truist Assist" underscore a continued focus on digital enhancement and client experience.

Financial Highlights

36 data points
Beta

Net Income

$1.64B

EPS (Diluted)

$1.15

Total Assets

$548.44B

Cash & Equivalents

$22.23B

Free Cash Flow

$3.77B

Financial Statements
Beta
Interest Expense$624.00M
Net Income$1.64B
EPS (Basic)$1.16
EPS (Diluted)$1.15
Shares Outstanding (Basic)1.33B
Shares Outstanding (Diluted)1.34B

Key Highlights

  • 1Net income available to common shareholders was $1.5 billion for Q3 2022, a 5.0% decrease compared to Q3 2021.
  • 2Diluted EPS was $1.15 for Q3 2022, down 4.2% from $1.20 in Q3 2021.
  • 3Total assets increased by 1.3% to $548.4 billion from December 31, 2021.
  • 4Total loans and leases grew by 7.6% to $316.6 billion compared to December 31, 2021.
  • 5Net interest margin (NIM) expanded by 31 basis points to 3.12% in Q3 2022 compared to the prior quarter.
  • 6The Common Equity Tier 1 (CET1) capital ratio was 9.1% at September 30, 2022, a slight decrease from June 30, 2022, primarily due to the BenefitMall acquisition and strong loan growth.
  • 7The company announced a $4.1 billion share repurchase authorization for the upcoming year, with no shares repurchased in Q3 2022.

Frequently Asked Questions

Truist's taxable-equivalent net interest income increased by 16% to $3.7 billion for Q3 2022 compared to Q3 2021, primarily driven by strong loan growth and higher market interest rates, coupled with controlled deposit costs. The net interest margin (NIM) expanded by 31 basis points to 3.12% due to higher yields on loans and securities, and a relatively controlled increase in deposit costs.

Truist experienced strong broad-based loan growth, with total loans and leases increasing by 7.6% year-to-date to $316.6 billion. Asset quality remains a strength, with nonperforming loans and leases held for investment at 0.35% of total loans and leases. The provision for credit losses increased due to loan growth and a moderately slower economic outlook, but net charge-offs remain at manageable levels.

Total noninterest income decreased by 11.1% to $2.1 billion in Q3 2022 compared to the prior year, mainly due to declines in residential mortgage income and investment banking & trading income, partially offset by growth in insurance income. Total noninterest expense decreased by 4.8% to $3.6 billion, largely due to reduced merger-related and restructuring charges. Excluding certain items, adjusted noninterest expense saw a modest increase.

Truist maintained strong capital levels, with a CET1 ratio of 9.1% at the end of the quarter. The company also increased its quarterly common dividend by 8% to $0.52 per share, resulting in a payout ratio of 45% for Q3 2022. Truist's Board authorized up to $4.1 billion in share repurchases through September 2023.