TRUIST FINANCIAL CORP Quarterly Report for Q3 Ended Sep 30, 2023

Summary

Truist Financial Corporation (TFC) reported a net income available to common shareholders of $1.07 billion, or $0.80 per diluted share, for the third quarter of 2023, a decrease from the same period in 2022. This decline was primarily driven by a significant increase in the provision for credit losses, which rose to $497 million from $234 million year-over-year, reflecting an allowance build and higher net charge-offs. Net interest income saw a slight decrease of 4.3% year-over-year, impacted by higher funding costs, although this was partially offset by higher market interest rates. The net interest margin compressed by 17 basis points to 2.95%. Truist continues its transformative efforts to improve financial performance through expense reduction and organizational simplification, aiming for $750 million in gross cost savings. Capital ratios remained strong, with the CET1 ratio at 9.9%, and the company maintained its common stock dividend. Asset quality metrics showed some normalization, with nonperforming loans at 0.46% of total loans, though net charge-offs increased in certain portfolios.

Key Highlights

• 1Net income available to common shareholders was $1.07 billion, down 30% from the prior year's quarter.
• 2Diluted EPS was $0.80, a decrease of $0.35 from the third quarter of 2022.
• 3Provision for credit losses significantly increased to $497 million from $234 million year-over-year.
• 4Net interest income decreased by 4.3% year-over-year, with net interest margin declining 17 basis points to 2.95%.
• 5Total noninterest income remained relatively stable, up 0.3% year-over-year.
• 6Total noninterest expense increased by 3.7% year-over-year, impacted by higher personnel and other expenses.
• 7CET1 ratio stood at 9.9%, an improvement from the previous quarter.
• 8The company announced a cost savings program targeting $750 million in gross savings.

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