Truist Financial Reports Mixed Q1 Earnings, Expects Further Decline In Annual Revenues

Truist Financial Corporation TFC reported first-quarter adjusted EPS of 90 cents, beating the consensus of 80 cents, down from $1.05 a year ago.

Revenues decreased to $4.87 billion from $5.34 billion a year ago, missing the consensus of $5.7 billion.

Net interest income declined 4.2% due to lower earning assets and higher funding costs; net interest margin was down seven basis points.

Noninterest income was up 6.1% due to higher investment banking and trading income, partially offset by lower lending-related fees.

Average loans and leases Held for investment (HFI) decreased by 1.3% due to less activity in its consumer, commercial, and industrial portfolios. 

Average commercial loans decreased by $1.6 billion, or 0.9%, driven by a decline in C&I.

Average consumer loans decreased $2.4 billion, or 2%, largely due to a $1 billion decline in indirect auto, an approximate $600 million decline in other consumer, and an approximate $600 million decline in mortgage loans.

Average deposits decreased 1.6% due to declines in non-interest bearing and money market and savings deposits.

Deposit costs increased primarily due to the continued mix shift from lower-cost deposit accounts.

Truist’s provision for credit losses came to $500 million in the first quarter. That’s compared to $502 million a year ago.

“We are pleased with the progress and momentum of our business in the first quarter,” Truist CEO Bill Rogers said in a statement. “Our expense discipline was evident and reflects important decisions we made last year.”

“Our strengthening capital position allows us to better weather any economic environment and, importantly, will enable us to be in a more offensive position with our core banking franchise,” Rogers said.

Guidance: Truist expects second-quarter revenues to fall around 2% sequentially.

For fiscal 2024, the banking firm forecasts a revenue decline of around 4%-5% Y/Y.

Price Action: TFC shares are down 2.16% at $36.01 during the premarket session at the last check Monday.