Skip to content
AnalystLens

TRUIST FINANCIAL CORP 8-K Report, Financial Results (Jan 18, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed January 18, 2024
Period End
January 18, 2024
In the record · 2016–202610-K1110-Q338-K196

TFC filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 196 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Apr ’16Apr ’16
  2. Deal closed8-K · Dec ’19Dec ’19
  3. Leadership change8-K · Sep ’22Sep ’22
  4. Leadership change8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed January 18, 2024. Cited figures are marked; the original filing is the authoritative source.

Truist Financial reported a GAAP net loss of $5.2 billiona, or $3.85 per diluted share, for the fourth quarter of 2023, driven primarily by a non-cash goodwill impairment charge of $6.1 billion ($4.53 per share) and a $507 million FDIC special assessment ($0.29 per share).

Excluding these and other selected items, adjusted net income available to common shareholders was $1.1 billionb, or $0.81 per share, versus $1.74 billion ($1.30 per share) a year earlier. The goodwill write-down is non-cash and, per management, has no effect on liquidity, regulatory capital ratios, or the ability to pay the common dividend. Management characterized underlying results as positive, citing a sequential decline in adjusted noninterest expense (down 4.5%) and a modest increase in revenue.

Core operating trends were mixed. Total revenue (taxable-equivalent) rose 0.5% sequentially to $5.8 billionc, with noninterest income up 2.2% and net interest income down 0.6%, as deposit balances and average loans both declined. Net interest margin improved three basis points to 2.98%, though it fell 27 basis points year over year as funding costs rose.

Credit quality remained broadly stable, though normalizing: the net charge-off ratio rose to 0.57%d, the allowance for loan and lease losses ratio increased to 1.54%, and nonperforming loans declined 6% to 0.44% of loans held for investment. The CET1 ratio improved 20 basis points to a preliminary 10.1%, supported by organic capital generation and risk-weighted asset optimization, and the company expects to remain above 10%. Looking ahead, management guided to first-quarter 2024 revenue flat to down 1% and adjusted expenses up 4% (including costs tied to the Truist Insurance Holdings independence readiness).

For full-year 2024, it outlined revenue down 1% to 3%, adjusted expenses flat to up 1%, and a net charge-off ratio of about 65 basis points, compared with 50 basis points in 2023. Investors should weigh the strong capital position and expense discipline against continued pressure on net interest income and expected credit normalization.

02—Key points

Key Highlights

  1. GAAP net loss of $5.2 billion (-$3.85 per diluted share) driven by a non-cash $6.1 billion goodwill impairment and a $507 million FDIC special assessment; adjusted EPS was $0.81.
  2. Adjusted noninterest expense fell $160 million (4.5%) sequentially, reflecting lower personnel expense as the cost savings program progresses.
  3. Total taxable-equivalent revenue rose 0.5% sequentially to $5.8 billion, led by a 2.2% increase in noninterest income; net interest margin rose 3 bps to 2.98%.
  4. CET1 ratio increased 20 bps to a preliminary 10.1%, driven by organic capital generation and RWA optimization; management expects it to stay above 10%.
  5. Net charge-off ratio rose to 0.57% (up 6 bps), while nonperforming loans fell 6% to 0.44% of loans held for investment and the ALLL ratio rose to 1.54%.
  6. Average deposits declined 1.4% and average loans held for investment declined 1.7% sequentially, with noninterest-bearing deposits down 3.7%.
  7. 2024 outlook calls for revenue down 1% to 3%, adjusted expenses flat to up 1%, and a net charge-off ratio of roughly 65 bps versus 50 bps in 2023.

03—Questions

Frequently Asked Questions

  1. Why did Truist report such a large GAAP loss in Q4 2023?

    The loss of $5.2 billion was mainly due to a non-cash goodwill impairment of $6.1 billion, reflecting higher interest and discount rates and a sustained decline in bank share prices, including Truist's. The quarter also included a $507 million FDIC special assessment and $183 million of restructuring charges, partly offset by a $204 million discrete tax benefit.

  2. Does the goodwill impairment affect Truist's liquidity or ability to pay dividends?

    According to management, no. The impairment is non-cash and has no impact on liquidity, regulatory capital ratios, the ability to pay the common dividend, or the company's ability to serve clients. The company continued to declare a $0.52 quarterly dividend.

  3. How is Truist's underlying profitability trending?

    Adjusted results improved sequentially. Adjusted PPNR rose 8.6% to $2.4 billion, and adjusted EPS was $0.81 versus $0.80 in the prior quarter, though it was well below the $1.30 reported a year earlier. Year over year, revenue declined 8% and margin pressure from higher funding costs persisted.

  4. Is credit quality deteriorating at Truist?

    Credit is normalizing rather than sharply deteriorating. Net charge-offs rose to 0.57% and the provision increased to $572 million, driven largely by consumer portfolios and seasonality. Nonperforming assets declined 6%, and the allowance coverage ratio rose to 1.54%, though it is down from earlier pandemic-era levels as a multiple of charge-offs.

  5. What does Truist expect for 2024?

    For full-year 2024, management expects revenue to decline 1% to 3% versus 2023, adjusted expenses to be flat to up 1% (including about $85 million of Truist Insurance Holdings independence readiness costs), a net charge-off ratio near 65 bps, and an effective tax rate of about 17%. For Q1 2024, it expects revenue flat to down 1% and adjusted expenses up 4% sequentially.

04—Continue

← View all 8-K filings