Truist Financial beat analysts’ profit expectations in the third quarter, spurred by higher income from investment banking and trading. The Charlotte-based bank said today adjusted earnings per share were 97 cents, topping an estimate of 91 cents.
Still, shares of Truist declined about 3.5% to $42.95. The stock has ranged between $27 and $45 in the past year. It traded for more than $60 in late 2021.
The stronger performance of investment banking and trading led to higher revenue of $5.14 billion, also topping estimates. Lower personnel costs and restructuring charges contributed to a 2.3% decline in year-over-year adjusted noninterest expenses, as CEO Bill Rogers focuses on controlling costs.
On the revenue side, he said, the bank is selling more to existing customers and attracting new ones with improvements in branch and digital banking. “We don’t need to experiment with new products or expand into new markets to achieve our goals,” Rogers told analysts today on a conference call.
Saying “it’s too early” to provide specific earnings guidance for next year, he predicted “positive operating leverage” in 2025. Truist emerged as the nation’s sixth-largest bank in 2019 from the merger of Winston-Salem’s BB&T and Atlanta-based SunTrust. Combining the institutions has taken longer than executives had expected, due to what analysts blamed as unfulfilled pledges for increased growth and cost-cutting.
Rogers cited “considerable progress” in boosting revenue while holding the line on costs. Restructuring costs tumbled to $25 million in the third quarter from $61 million a year earlier.
The bank said it’s doing a better job retaining customers and adding new ones. It reported the addition of 108,000 net new checking accounts and 545,000 new digital account openings in the first three quarters.
Lending activity was weak in the third quarter, as average loans declined 1% from the earlier quarter. Consumer lending was relatively flat while commercial loans sank 1.7%.
Rounding out 2024, Truist projects adjusted revenue to decline 1.5% from $5.1 billion in the fourth quarter compared with the same period last year. For the year, the bank forecasts revenue will slip 0.5-1% from $20.2 billion in 2023.
Truist’s third-quarter results mirrored higher quarterly profits by Bank of America Corp., which reported earlier this week, and Wells Fargo & Co., reporting last week. Earnings from both banks benefited from strong investment banking results.
