Truist Financial Corporation
CEO : Mr. William Henry Rogers Jr.
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2022 Q4 | 12.3% YoY | 53.3% | 0.8% | 2023-01-19 |
Bill Rogers says,
Truist Q4 2022 Earnings Call Transcript Summary
- Adjusted PPNR grew 12% sequentially, ahead of guidance, driving positive operating leverage for the full year
- Truist One Banking launched, offering two new accounts with no overdraft fees and increased credit access
- Digital engagement increased through 2022, with digital transactions and Zelle volume up 42%
- Average loan and lease balances grew $11.3 billion or 3.6% sequentially, with C&I growing $7.2 billion or 4.7%
- Average deposit balances decreased 1.6% sequentially, with interest-bearing deposit costs increasing 52 basis points
Mike Maguire says,
Net Interest Income
- Taxable equivalent net interest income rose by 7% to $4 billion in Q4 2022 primarily due to ongoing margin expansion and strong loan growth.
- Deposit costs were well controlled and reflect the strength of the bank’s deposit franchise.
- Reported net interest margin increased by 13 basis points and core net interest margin improved by 15 basis points as a result of higher short-term interest rates alongside well-controlled deposit costs.
Fee Income
- Fee income rebounded during the quarter, increasing by $125 million or 6% sequentially driven by seasonality, insurance, BenefitMall acquisition, and higher investment banking and lending-related fee income.
- Organic revenue for the full year grew 7% driven by a firm pricing environment, new business, and strong retention.
- Fee income declined 4% compared to a year ago, primarily driven by declines in market-sensitive businesses such as investment banking, wealth, and mortgage and partially offset by organic and inorganic growth in insurance.
Non-Interest Expense
- Reported non-interest expense increased by $109 million or 3% sequentially, and adjusted non-interest expense increased by $68 million or 2% primarily due to the effects of the bank’s non-qualified plan.
- Personnel expense increased by $84 million, half of which was from changes in the non-qualified plan and half of which was from the recent increase in the bank’s minimum wage.
- The decline in other expense was driven by lower operational losses, which have decreased for two consecutive quarters, as recent investments in talent, technology, and process have begun to mitigate our fraud-related costs.
Asset Quality
- Net charge-offs increased by 7 basis points to 34 basis points largely due to seasonality in indirect auto and lower recoveries.
- The allowance increased by $172 million, reflecting strong loan growth and the ALLL ratio was stable at 1.34%.
Guidance
- For Q1 2023, revenues are expected to decline by 2% to 3% relative to Q4 2022, primarily driven by 2 fewer days impacting net interest income in addition to typical seasonal patterns in investment banking, card and payments, and service charges.
- For the full year 2023, revenues are anticipated to increase 7% to 9%, driven largely by strong net interest income growth and modestly improving fees.
- Adjusted expenses are anticipated to increase 5% to 7% as a result of higher pension expense, higher FDIC premiums, the full annual impact of the bank’s minimum wage increase, and acquisitions that closed throughout 2022.
Q & A sessions,
Loan Production
- Near the highest loan production despite intentional reductions in certain consumer categories
- The strongest Commercial Community Bank (CCB) loan and deposit production in both Q4 and full year
- 36% increase in left lead relationships within CCB
Branch Deposit and Checking Unit Production
- Increased by 24% and 8%, respectively, compared to the year-ago quarter
- Higher confidence of teammates with processes and systems, and improved solutions and capabilities
Wealth Line of Business
- Three consecutive quarters of adding net new advisers
- Organic asset flows continue to be positive
Digital App Ratings
- Ended the year as one of the leaders in peer group after starting near the bottom
Operating Leverage and Adjusted PPNR
- Fourth quarter operating leverage was the strongest of the year
- Adjusted PPNR building each quarter
No bad stock 