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Tuesday, February 18, 2025

Truist first-quarter results match expectations

Truist Financial said it earned $1.2 billion in the first quarter, or 90 cents per share.

The profit included profit of 80 cents per share from continuing operations, plus 10 cents from discontinued businesses, including earnings from its insurance business that is being sold to private-equity companies.

The results matched expectations. In the same period last year, the company earned $1.09 per share.

Revenue declined 1.4% during the quarter, which officials said stemmed from reduced net interest income, which is the difference between payments on deposits and interest received from loans. Truist benefited from increased investment banking and trading-related revenue, similar to what other big banks have reported recently.

The company expects revenue this year to decline another 4% to 5% because of continued interest margin pressures, given expectations that the federal funds rate will be cut in coming months, CFO Mike Maguire said on a conference call with analysts. It previously had predicted a decline of 1% to 3%, including revenue from its insurance business.

Truist said it expects to report a $10 billion after-tax cash gain on its pending sale of Truist Insurance, which officials said may be completed before June 30.

During the conference call conversation about the earnings, Wells Fargo analyst Mike Mayo noted that Truist’s shares are down “one-fourth, the [bank index] BTX is flat, the S&P is up two-thirds” since the merger of Winston-Salem-based BB&T and Atlanta-based SunTrust Banks five years ago. He asked what Truist was doing to “bring shareholders along a little bit more?”

Truist CEO Bill Rogers responded that shareholders are a key component of the company, the bank’s “purpose and performance are inextricably linked,” and that “the actions we’ve taken in the fall, the actions that we’re taking now, the momentum we’ve created are solid evidence of our focus on our shareholders as well.”

Rogers said loan demand remains “relatively muted” although the company saw some increased activity in commercial lending. Consumer loan balances increased for the first time since the fall of 2022, officials said. Rogers said the first quarter “included solid underlying earnings, improved momentum” along with the Truist Insurance sale announcement.

Charlotte-based Truist charged off 0.6% of its loans during the quarter, compared with 0.4% in the same period last year.

Shares of Truist gained 3.5% to $38.12 in late afternoon trading. Shares have ranged between $25.56 and $39.29 in the past year. They have not cracked $40 since March 2023, after trading for more than $50 during late 2021 and all of 2022.

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