### Title: Truist Financial Earnings: EPS Misses Expectations ### Promo: Truist Financial's latest earnings report reveals EPS shortfall but strong adjusted revenue results. --- - **EPS below analyst expectations at $0.62.** - **Adjusted revenue surpasses estimates at $4.87 billion.** - **Continued stability in asset quality and rise in digital transactions.**
Truist Financial, one of the top commercial banks in the United States, released its Q2 2024 financials on July 22. The primary news is that the company's reported Earnings Per Share (EPS) missed analyst estimates. Truist reported a $0.62 EPS against an anticipated $0.66. However, when adjusted, the EPS was $0.91, meeting expectations. Additionally, it recorded adjusted total revenue of $4.87 billion, which slightly surpassed the mean analyst estimate of $4.83 billion by around $44 million. Overall, the quarter demonstrated stability and a focused forward growth outlook.
Overview of Truist Financial
| Metric | Q2 2024 | Analyst Estimate | Q2 2023 | % Change Y/Y |
|---|---|---|---|---|
| Earnings Per Share (EPS) | $0.62 | $0.66 | $0.92 | -32.6% |
| Adjusted EPS | $0.91 | $0.91 | $0.92 | -1.1% |
| Total Revenue | $4.87 billion | $4.83 billion | $5.04 billion | -3.4% |
| Book Value Per Share (BVPS) | $42.71 | — | $42.68 | 0.07% |
| Net Income | $919 million | — | $1.35 billion | -31.9% |
| Source: Analyst estimates for the quarter provided by FactSet. |
Source: Analyst estimates for the quarter provided by FactSet.
Truist Financial is one of the United States’ top ten commercial banks. It boasts extensive operations with over 2,000 branches, predominantly situated in high-growth states such as Florida, Georgia, and Virginia. The bank offers a wide range of products and services, including consumer banking, wealth management, investment banking, and insurance.
Recently, Truist Financial has been focusing on enhancing its market position in key regions, improving digital platforms, and maintaining regulatory compliance. The bank's diverse offerings provide stable revenue streams, which is vital for its competitive edge and customer reach.
Quarter Performance: Financials and Business Actions
During Q2 2024, Truist Financial saw mixed results across various segments. On the positive side, wealth management income rose by 1.4% quarter-over-quarter and 9.4% year-over-year to $356 million. Wealth management continued to be a strong performer, indicating robust assets under management.
Investment banking and trading revenues, however, presented a more complex scenario. Despite the quarter-over-quarter decline of 11.5%, resulting in $323 million, these revenues surged by 35.5% year-over-year. This annual rise highlights strong occupational performance in capital markets.
Another notable change was the decline in service charges on deposits, which fell by 1.7% quarter-over-quarter to $225 million and decrease of 10% year-over-year. However, card and payment-related fees, which reached $224 million, demonstrated a 2.7% increase compared to Q1 2024 albeit down by 2.5% from Q2 2023.
Adjusted noninterest expense for Q2 2024 saw a marginal increase of 0.7% quarter-over-quarter, primarily driven by higher personnel costs and an uptick in professional fees. Total non-interest expenses amounted to $3.09 billion, compared to $3.02 billion a year earlier. Notably, the bank made a charitable contribution of $150 million, affecting the overall expense levels.
On the capital expenditure front, Truist completed the divestiture of Truist Insurance Holdings, generating significant capital. The Common Equity Tier 1 (CET1) ratio improved to 11.6%, compared to 9.6% a year ago, reflecting a more robust capital position.
Looking Ahead: Strategic Outlook and Growth Factors
The management at Truist Financial remains optimistic about future growth. They commenced a share repurchase program, with plans to repurchase up to $5 billion in shares through 2026, starting from Q3 2024. This share buyback indicates confidence in the company's long-term performance and aims to return value to shareholders.
The financial outlook for the upcoming quarter and the year continues to emphasize discipline in expense management and strategic investments in core banking growth. Truist's focus will also remain on enhancing its digital platforms to maintain competitiveness and address the changing needs of its clients. Investors should monitor these technological advancements, as well as any shifts in core banking and digital transaction metrics in the following quarters.