Truist Financial (TFC) Q2 2024 earnings summary

Executive summary

• Adjusted net income available to common shareholders was $1.2 billion ($0.91 per share), excluding significant one-time items such as the gain on the sale of Truist Insurance Holdings (TIH), securities losses, and restructuring charges.

• Completed the sale of TIH, generating $10.1 billion in after-tax cash proceeds and a $4.8 billion after-tax gain, significantly strengthening capital and enabling future growth and capital return.

• Announced a $5 billion share repurchase authorization through 2026, with buybacks expected to begin in Q3 2024.

• Net income available to common shareholders was $826 million ($0.62 per share), reflecting a $3.9-$4.0 billion net loss from continuing operations and $4.8 billion net income from discontinued operations.

• Continued focus on digital growth, with mobile app users up 7% and digital transactions up 13% year-over-year.

Financial highlights

• Adjusted revenue grew 3% sequentially to $5.02 billion, driven by a 4.5% increase in net interest income and a 14 bps rise in net interest margin to 3.03%.

• Adjusted expenses increased 2.6% sequentially but declined 3% year-over-year, reflecting ongoing expense discipline.

• Noninterest expense included a $150 million charitable contribution and higher personnel and professional fees.

• CET1 capital ratio rose to 11.6%, up 150 basis points sequentially, primarily due to the TIH sale and balance sheet actions.

• Tangible book value per share increased by 33-34%.

Outlook and guidance

• Q3 2024 adjusted revenue expected to increase 1%-2% sequentially; adjusted expenses to rise 3% due to higher professional fees, software, and marketing costs.

• Full-year 2024 adjusted revenue expected to decline 0.5%-1% year-over-year; adjusted expenses to remain flat versus 2023.

• Net charge-off ratio for 2024 projected at about 58-65 basis points.

• Effective tax rate expected at 16% (19% taxable equivalent) for Q3 and Q4.

• Share repurchases to begin in Q3 2024, with a $5 billion program through 2026.