Truist Financial Q3 Earnings Beats Estimates, $750M Cost Savings Program Underway

Truist Financial Corporation TFC revenues in the third quarter fell 2.7% year-over-year to $5.73 billion, beating the consensus of $5.7 billion.

Adjusted EPS in the quarter under review was 84 cents, beating the consensus of 82 cents. 

Net interest income in the quarter under review fell 4.23% year-over-year to $3.62 billion, while noninterest income inched up nearly 0.5% on year to $2.11 billion.

The provision for credit losses was $497 million compared to $234 million for the third quarter of 2022. The current quarter provision expense increase primarily reflects higher charge-offs in the CRE, commercial and industrial, and indirect auto portfolios.

Average loans held for investment decreased $8.3 billion, or 2.5%, compared to the second quarter of FY23, primarily due to the sale of the student loan portfolio at the end of the second quarter of 2023 and balance sheet optimization in lower return portfolios.

Truist's CET1 ratio was 9.9% as of Sept. 30. The increase since June 30 resulted from organic capital generation and RWA optimization.

Net interest margin was 2.95%, compared with 3.12% a year ago.

Truist will focus on "core clients" and "paying down higher-cost borrowings" to improve its net interest margin, CEO Bill Rogers said.

"Adjusted expenses decreased 50 basis points sequentially, reflecting our expense discipline, while our $750 million cost saves program aimed at holding expense growth to flat to up 1% in 2024 is well underway," Rogers added.

Price Action: TFC shares are trading higher by 1.6% to $28.85 on the last check Thursday.