CHARLOTTE, N.C., June XNUMX / PRNewswire /) - Earnings of $ 1,3 billion, or $ 0,98 per diluted share
Truist Financial Corporation (NYSE: TFC) today announced results for the first quarter of 2021.
Net income available to common stockholders was $ 1,3 billion, up 35,3 percent compared to the first quarter last year. Earnings per diluted common share were $ 0,98, an increase of 34,2 percent over the same period last year. Results for the first quarter showed an annualized return on average fixed assets (ROA) of 1,17 percent, an annualized shareholder return on equity (ROCE) of 8,69 percent, and a shareholder return on property, plant and equipment (ROTCE) of 16,40 ,XNUMX percent.
Adjusted net income available to common stockholders was $ 1,6 billion, or $ 1,18 per diluted share. This excludes merger and restructuring charges of $ 141 million ($ 108 million after tax), additional operating expenses related to the merger of $ 175 million ($ 134 million after tax), an acceleration in loss recognition related to certain Completed cash flow hedges of $ 36 million ($ 28 million after tax). Adjusted results showed an annualized ROA of 1,39 percent, an annualized ROCE of 10,41 percent, and an annualized ROTCE of 19,36 percent.
“Truist, with the help of its people, achieved strong financial results and several significant milestones in the first quarter that reflect our goal in practice. We can be proud of that, ”said Chairman and Chief Executive Officer Kelly S. King. “We advanced our ESG strategy by issuing our first social bond - the first regional bank in the US - and became the main investor in Greenwood, an innovative digital banking platform designed for Black and Latin American consumers and business owners. We also received an “Outstanding” CRA rating for our community advancement efforts and continued to make great strides in implementing our Community Benefits Plan, having achieved 2020 percent of our annual target by the end of 114. These achievements reflect our ongoing commitment to support and investment in the diverse communities we enjoy working with. "
Adjusted net income was $ 1,6 billion, up 42 percent from the first quarter last year. On a diluted basis per share, adjusted net income was $ 1,18 per share, also up 42 percent year over year. This growth resulted from record performance in the insurance division, record results in investment banking and significantly lower risk provisioning in the lending business. We also demonstrated strong cost discipline and reduced expenses. The adjusted efficiency rate for the quarter was 56,9 percent and the adjusted return on average tangible equity was a strong 19,36 percent. "
“We continue to make important strides in our integration efforts, including completing the Wealth Brokerage transition this quarter. Thanks to our unique approach of integrated relationship management, we have further deepened customer relationships in the entire investment banking and insurance business and significantly increased the brokerage volume. "
“We were also recognized for our social commitment: We received a perfect score of 100 points from the Corporate Equality Index of the Human Rights Campaign, 'FORTUNE' named us among the world's most admired companies and we were named the top 50 employers by the 'Equal Opportunity' and 'CAREERS & the disABLED' magazines highlighted. "
Performance highlights in the first quarter of 2021
- Earnings per diluted common share was $ 0,98
Adjusted diluted earnings per share were $ 1,18, a
$ 0,35 per share increase compared to Q2020 XNUMX
The ROA was 1,17 percent; the adjusted ROA was 1,39
Percent The ROCE was 8,69 percent; the adjusted ROCE was
10,41 percent The ROTCE was 16,40 percent; the adjusted ROTCE
was 19,36 percent
- Taxable income was $ 5,5 billion
The fee income rate was 40,1 percent compared to 40,4
Percent in fourth quarter 2020 record revenue from insurance
and investment banking and trading. The net interest margin was 3,01
Percent, seven basis points less than in the fourth quarter of 2020
The net interest margin was 2,69 percent, three basis points less
than in the fourth quarter of 2020
- Interest-free expenses were $ 3,6 billion
- Interest-free expenses include $ 141 million
merger and restructuring charges, $ 175 million
additional operating expenses related to the merger The
GAAP efficiency was 65,8 percent compared to 67,8 percent
in the fourth quarter of 2020 The adjusted efficiency ratio was
56,9 percent, compared to 55,9 percent in the fourth quarter of 2020
- Asset quality metrics remain stable and reflect the diversification benefits of the merger and the effective resolution of problem assets
- The non-performing assets made up 0,25 percent of the
Total assets up two basis points from fourth quarter
2020 loans that were 90 days or more overdue and still remaining
always accumulated, made 0,71 percent of the
Loans held for investment purposes, down from 0,67 percent
in the fourth quarter of 2020; the increase occurred almost exclusively
for state-guaranteed loans Without state-guaranteed loans
Loans made loans that were 90 days or more past due
and still accumulate 0,04 percent of that for investment
held loans from The net depreciation amounted to
0,33 percent of average loans and leases,
three basis points more than in the fourth quarter of 2020 Die
Allowance for credit and lease losses was 1,94
Percent of loans held for investment and
Leases, compared with 1,95 percent in the fourth quarter
2020 The provision for credit losses was in the first
$ 2021 million in the first quarter of 48, including one release
of $ 190 million, which is primarily lower loan balances
and the improved economic outlook reflects
Coverage ratio of allowances for loan and credit
Lease losses were 4,84 times the non-performing loans and
Leasing contracts held for investment purposes,
compared to 4,39 times in the fourth quarter of 2020
- Capital and liquidity remain strong
- The ratio of core capital to risk-weighted
Assets amounted to 10,1 percent The risk-based core capital
was 12,0 percent. The total risk-based capital was 14,3
Percent of common stock repurchased for $ 506 million
$ 950 million of preferred stock redeemed The
consolidated average LCR ratio was 111 percent
Results presentation and quarterly performance overview
To attend Truist's live conference call on Q2021 8.00 results at 866:519 a.m. ET, please call 2796-391805-XNUMX and enter attendee code XNUMX. A presentation during the conference call will be used on the results. This is on our website at https://ir.truist.com/events-and-presentation accessible. Conference calls can be retrieved for 30 days by calling 888-203-1112 (access code 391805).
The presentation is including an Appendix for Reconciliation of Non-GAAP Disclosures and Truist's Quarterly Performance Summary for the First Quarter of 2021, which includes the detailed financial tables below https://ir.truist.com/earnings verfügbar.
Information on Truist
Truist Financial Corporation is a purpose-built financial services company dedicated to inspiring and building better living conditions and communities. Thanks to the historic merger of BB&T and SunTrust on an equal footing, Truist has leading market shares in many of the country's high-growth markets. The company offers a wide range of services including retail, small business and commercial banking, asset management, capital markets, commercial real estate, corporate and institutional banking, insurance, mortgages, payments, specialty loans and asset management. Headquartered in Charlotte, North Carolina, Truist is the sixth largest commercial bank in the United States with total assets of $ 518 billion as of March 31, 2021. Truist Bank, member of the FDIC. Learn more at Truist.com.
The capital ratios and returns on risk-weighted assets are preliminary.
This press release contains financial information and performance measures obtained using methods other than United States generally accepted accounting principles (“GAAP”). Truist management uses these "non-GAAP" metrics in analyzing the company's performance and the efficiency of its operations. Management believes that these non-GAAP measures provide a better understanding of ongoing operations, improve comparability of results with prior periods, and show the impact of significant items in the current period. The company believes that a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. Truist management believes that investors may find these non-GAAP financial metrics useful. These disclosures should not be used as a substitute for GAAP financial measures, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. The following is a list of the types of non-GAAP measures used in this press release:
- Adjusted Efficiency Measure - Adjusted Efficiency Measure is non-GAAP in that it excludes securities gains (losses), amortization of intangible assets, merger and restructuring charges, and other select items. Truist management uses this metric in their analysis of the company's performance. Truist management believes this metric will provide a better understanding of ongoing operations, improve comparability of results with prior periods, and highlight the impact of significant gains and charges.
- Tangible Equity and Related Measures - Tangible Equity and Related Measures are non-GAAP measures that exclude the effects of intangible assets after the deduction of deferred taxes and associated amortization. These metrics are useful for consistently assessing a company's performance, whether it was acquired or developed in-house. Truist management uses these metrics to assess the quality of capital and earnings relative to balance sheet risk.
- Core Net Interest Margin - The Core Net Interest Margin is a non-GAAP measure that adjusts the net interest margin to eliminate the impact of accounting for purchases. The purchase accounting marks and related write-offs for a) securities acquired by the FDIC in the Colonial Bank acquisition and b) loans, deposits and long-term debt from SunTrust, Susquehanna, National Penn and the Colonial Bank are excluded to the approximate returns paid by customers. Truist's management believes that the adjustments in the calculation of the net interest margin for certain acquired assets and liabilities will provide investors with useful information regarding the performance of Truist's income.
- Adjusted Diluted Earnings per Share - Adjusted diluted earnings per share are non-GAAP in that they exclude merger and restructuring charges and other selected items after tax. Truist management uses this metric in their analysis of the company's performance. Truist management believes this metric will provide a better understanding of ongoing operations, improve comparability of results with prior periods, and highlight the impact of significant gains and charges.
- Adjusted Performance Measures - Adjusted Performance Measures, including Adjusted Return on Average Assets, Adjusted Return on Average Non-Preferred Equity, and Adjusted Return on Average Tangible Equity Non-Preferred Equity, are non-GAAP in that they are selected for merger and restructuring costs Items and, in the case of the return on average tangible equity without preferred securities, exclude the amortization of intangible assets. Truist management uses these metrics in analyzing the company's performance. Truist management believes these metrics will provide a better understanding of ongoing operations, improve comparability of results with prior periods, and highlight the impact of significant profits and costs.
- Adjusted EBITDA of Insurance Holdings - EBITDA is a non-GAAP measure of operating profitability calculated by adding interest, taxes, depreciation, and amortization to net income. Truist's management also adds back merger and restructuring costs, additional operating expenses related to the merger, and other selected items. Truist management uses this metric in its analysis of the company's insurance holdings segment. Truist management believes this metric will provide a better understanding of ongoing operations, improve comparability of results with prior periods, and highlight the impact of significant gains and charges.
- The Credit and Lease Loss Allowance and Unamortized Fair Market Mark as a Percentage of Gross Loans - The Credit and Lease Loss Allowance and Unamortized Fair Mark as a Percentage of Gross Loans is a non-GAAP measure of credit reserves calculated by adjusting the ALLL , as well as loans and leasing contracts held for investment purposes by the non-amortized market value marking. Truist management uses these metrics to assess loss absorbency.
A reconciliation of these non-GAAP measures with the most directly comparable GAAP measure is included in the appendix to Truist's income statement for the first quarter of 2021, which is available at
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 relating to Truist's financial condition, results of operations, business plans and future performance. Words like "anticipates", "believes", "estimates", "expects", "forecast", "intends", "plans", "projected", "can", "may", "will", "should", “Would”, “could” and other similar expressions are used to identify these forward-looking statements.
Forward-looking statements are not based on historical facts but rather represent management's expectations and beliefs about Truist's business, the economy and other future conditions. Such statements involve inherent uncertainties, risks, and changes in circumstances that are difficult to predict. As a result, Truist's actual results could differ materially from those contemplated in any forward-looking statements. While there can be no guarantee that the list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those contemplated in any forward-looking statement include the The following factors, without limitation, and the risks and uncertainties discussed in more detail under Item 1A Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and in Truist's subsequent filings with the Securities and Exchange Commission:
- Risks and uncertainties related to the merger of BB&T and heritage SunTrust, including the ability to successfully integrate the companies or realize the anticipated benefits of the merger;
- Expenses related to the merger and integration of heritage BB&T and heritage SunTrust;
- Deposits, lost customers, or lost revenue following a merger or acquisition may be greater than expected;
- the COVID-19 pandemic has disrupted the global economy, negatively impacting Truist's financial position and results of operations, including increased spending, decreased fee income and net interest margins, and increases in loan loss allowances, and maintaining current conditions could exacerbate those effects, and so do the Adversely affect Truist's capital and liquidity position or cost of capital, adversely affect borrowers' ability to repay outstanding loans, cause an outflow of deposits and adversely affect goodwill or other assets;
- Truist is exposed to credit risk from lending or loan approval and may have higher credit risk and credit losses where loans are concentrated by loan type, industry segment, borrower type or borrower location or collateral;
- Changes in the interest rate environment, including the replacement of LIBOR as an interest rate measure and the potential for negative interest rates that could adversely affect Truist's income and expenses, the value of assets and liabilities, and the availability and costs of capital, cash flows and liquidity ;
- Inability to access short term funding or liquidity, loss of customer deposits, changes in Truist's credit ratings that could increase funding costs or limit access to capital markets;
- The risk management supervisory functions may not identify or adequately address risk;
- Risks that arise from the extensive use of models in Truist's business operations and that may affect decisions by company management and regulatory authorities;
- Failure to execute strategic or operational plans, including the ability to successfully complete or integrate mergers and acquisitions;
- increased competition, including from new or existing competitors who have greater financial resources or may be subject to different regulatory standards, including increased competition from products and services offered by non-bank financial technology companies, may reduce Truist's customer base, Induce Truist to lower the prices of its products and services in order to maintain its market share or otherwise adversely affect Truist's business or results of operations;
- If Truist fails to maintain or improve its competitive position in relation to new products, services or technologies, be it because it does not anticipate the expectations of its customers or that its technological developments do not perform as desired or are not accepted by the market or Failure to obtain regulatory approvals or for any other reason may result in Truist losing or losing market share
causes additional costs;
- negative public opinion, which could damage Truist's reputation;
- a reinforced review of Truist's consumer sales practices, training practices, incentive pay design and corporate governance;
- Governmental matters, litigation, or other legal action that could result in, among other things, costs, fines, penalties, restrictions on Truist's business activities, reputational damage, negative publicity, or other adverse consequences;
- The evolving legal, accounting and regulatory standards, including with regard to capital and liquidity requirements, and the results of regulatory reviews can adversely affect Truist's financial position and results of operations;
- the monetary and fiscal policies of the federal government and its agencies could have a significant negative impact on profitability;
- Accounting policies and processes require management to make estimates of matters that are uncertain, including the potential amortization of goodwill if the market value of Truist shares declines over an extended period of time and adverse economic conditions persist for an extended period;
- General economic or business conditions, be it international, national or regional, may be less favorable than expected and instability in international geopolitical affairs or volatility in financial markets may, among other things, result in slower growth in deposits or assets, deterioration in credit quality or lower demand for credit, insurance, or others
- Risks associated with the creation and sale of mortgages, including repurchase and indemnification requests from buyers related to representations and guarantees on loans sold, which could increase loan repurchase losses;
- Risks related to Truist's role as an administrator of loans, including an increase in the scope or cost of the services Truist is required to provide without a corresponding increase in the service fee, or a breach of Truist's obligations as an administrator;
- Truist's success depends on the ability to attract and retain core staff, and if those individuals leave or change roles without effective replacements, it could adversely affect Truist's operations and integration activities. This could be exacerbated with the integration of the Heritage BB&T and Heritage SunTrust management teams.
- Fraud or misconduct by internal or external parties that Truist may not be able to prevent, detect or mitigate;
- Security risks, including denial-of-service attacks, hacking, social engineering attacks targeting Truist teammates and customers, malware intrusions or attempts to corrupt data, as well as system breaches, cyber attacks and identity theft, could result in the disclosure of confidential information, adversely affect Truist's business or reputation, or create a significant legal or financial hazard
- Extensive failures of operational, communication or other systems, regardless of whether they are provided internally or by third parties, natural or other disasters (including terrorist attacks and pandemics) as well as the effects of climate change could have a detrimental effect on the financial position and results of operations of Truist or a material limitation of Truist's operations or the ability or willingness of customers to access Truist
Products and services to receive, lead.
Readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this press release. Other than to the extent required by applicable law or regulation, Truist assumes no obligation to revise or update any forward-looking statements.
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