UPDATE: Truist Financial Corp. (TFC) Tops Q4 EPS by 10c
Truist Financial Corp. (NYSE: TFC) reported Q4 EPS of $1.12, $0.10 better than the analyst estimate of $1.02. Revenue for the quarter came in at $3.7 billion versus the consensus estimate of $3.6 billion.
Fourth Quarter 2019 Performance Highlights
- Earnings per diluted common share were $0.75
- Adjusted diluted earnings per share were $1.12
- ROA was 0.95 percent; adjusted ROA was 1.40 percent
- ROCE was 7.33 percent; adjusted ROCE was 10.84 percent
- ROTCE was 12.91 percent; adjusted ROTCE was 18.60 percent
- Completed merger of equals on December 6, 2019
- Merged loans of $154.0 billion, net of $4.5 billion mark
- Merged deposits of $170.7 billion, including an $83 million mark for time deposits
- Assumed long-term debt of $19.5 billion, including a $309 million mark
- Recorded core deposit and other intangibles of $2.5 billion
- Restructured balance sheet to enhance credit quality and improve liquidity, interest-sensitivity and return on capital
- Sold $33.2 billion of lower yielding securities to improve yield and lower premium amortization risk
- Transferred $17.9 billion of securities from HTM to AFS in response to changes in regulatory capital rules
- Maintained more than $10 billion in excess reserve balances for stronger liquidity and to meet LCR requirements under the new tailoring rule as a Category III Bank
- Identified $4.2 billion of lending exposures to sell to reduce credit and interest-rate risk
- Taxable-equivalent revenue was $3.7 billion for the fourth quarter of 2019
- Fee income ratio was 38.6 percent, compared to 42.0 percent for fourth quarter 2018
- Net interest margin was 3.41 percent, up four basis points from the third quarter of 2019
- Core net interest margin was 3.14 percent, down 15 basis points from the third quarter of 2019
- Noninterest expense was $2.6 billion for the fourth quarter of 2019
- Noninterest expense includes $223 million of merger-related and restructuring charges and $101 million of incremental operating expenses related to the merger
- GAAP efficiency ratio was 71.0 percent, compared to 60.7 percent for fourth quarter 2018
- Adjusted efficiency ratio was 57.5 percent, compared to 56.5 percent for fourth quarter 2018
- Asset quality remains strong; economic and political uncertainty presents risk
- Nonperforming assets were 0.14 percent of total assets; ratio benefited from pooled basis of accounting for PCI loans
- Loans 90 days or more past due and still accruing were 0.66 percent of loans held for investment, up from 0.27 percent for the prior quarter
- Excluding government guaranteed loans and PCI loans, loans 90 days or more past due and still accruing were 0.03 percent of loans held for investment
- Net charge-offs were 0.40 percent of average loans and leases, down one basis point compared to the prior quarter
- The allowance for loan and lease losses was 0.52 percent of loans and leases held for investment; merged loans were recorded at fair value with no initial allowance
- The allowance for loan loss coverage ratio was 3.41 times nonperforming loans and leases held for investment, versus 3.52 times in the prior quarter
- Capital levels remained strong compared to regulatory levels for well capitalized banks
- Common equity tier 1 to risk-weighted assets was 9.4 percent
- Tier 1 risk-based capital was 10.8 percent
- Total capital was 12.6 percent
"The successful completion of our merger was due to the hard work of thousands of Truist teammates and I am truly grateful for their efforts. Our integration and execution efforts are underway and going smoothly. While the fourth quarter of 2019 includes a number of costs necessary to complete the merger, our underlying performance is strong. Taxable-equivalent revenue for the fourth quarter of 2019 totaled $3.7 billion and adjusted net income was $1.0 billion," said Truist Chairman and Chief Executive Officer Kelly S. King.
"This month, we continued to hit key milestones that will bring Truist to life for our clients and teammates. We shared Truist's purpose, mission, and values, which was positively embraced by our teammates. Our purpose to inspire and build better lives and communities is the reason Truist exists and the starting point for every decision we will make," said King. "Our purpose is embedded in our visual brand identity, which was rolled out this month as well. Within our new monogram logo and colors, you can see elements that acknowledge our heritage companies and signal how we\'ll deliver a distinctive blend of touch and technology to build deeper trust with our clients."
For earnings history and earnings-related data on Shelton Greater China Fund (TFC) click here.