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Wednesday, June 19, 2024

Truist shares dip on earnings report

Shares of Charlotte-based Truist Financial declined 7% Thursday after the sixth-largest U.S. bank reported a profit of $1.2 billion, or 92 cents per share, in the second quarter. That compared with $1.5 billion, or $1.09 per share, a year earlier. A consensus of analysts  expected earnings of $1.01 per share.

Truist said it set aside more money for potential loan losses, while expenses rose. Revenue increased 5% to $5.97 billion, up from $5.68 billion a year ago.

“Second-quarter financial results were mixed as revenue headwinds from higher funding costs and lower-than-anticipated capital markets activity were partially offset by record insurance income,” CEO Bill Rogers said in a prepared statement. “We prudently increased our provision and allowance amid the uncertain economic backdrop.”

BB&T of Winston-Salem and Atlanta’s SunTrust merged in late 2019 to create Truist. It had $566 billion in assets as of June 30, trailing JPMorgan Chase, Bank of America, Citi, Wells Fargo and US Bancorp.

Truist said its provision for credit losses was $538 million, which compares with $171 million a year earlier. Some losses relate to commercial real estate loans because of declining occupancy rates and reduced property values.

Deposits declined to $400 billion, compared with $424 billion a year earlier and $408 billion in the previous quarter. Truist is paying an average of 1.5% on its deposits, compared with 0.1% a year ago. Interest rates have shot up at the fastest pace in decades.

The bank also said its non interest expense increased 9.9% to $3.7 billion over the past year, citing increased minimum wage, new hires and investments in technology and infrastructure.

The bank’s loan portfolio was flat at $326 billion compared with the previous quarter as consumer and credit card loans declined while commercial loans increased.

Shares of Truist declined to $33.06. The stock has traded between $25.50 and $52 in the past year. The stock now yields 6.3%, an unusually high payout.

David Mildenberg
David Mildenberg
David Mildenberg is editor of Business North Carolina. Reach him at dmildenberg@businessnc.com.

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