• Net Income: $1.2 billion or $0.87 per share for Q1 2025.
• Revenue: Decreased 3.2% linked quarter.
• Adjusted Expenses: Decreased 5.4% linked quarter.
• Loan Growth: Average loans increased 1.1% linked quarter.
• Deposit Growth: Average deposits increased $2.2 billion or 0.6% sequentially.
• Net Interest Margin: Decreased 6 basis points to 3.01% linked quarter.
• Share Repurchases: $500 million in Q1 2025, with plans for up to $750 million in Q2 2025.
• Efficiency Ratio: Improved by 130 basis points linked quarter.
• Net Charge-Offs: Increased to 60 basis points linked quarter.
• CET1 Ratio: Declined 20 basis points to 11.3% linked quarter.
• Digital Account Growth: 195,000 new digital accounts opened in Q1 2025, a 13% increase year-over-year.

• Warning! GuruFocus has detected 3 Warning Signs with TFC.

Release Date: April 17, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Truist Financial Corp (NYSE:TFC) reported net income available to common shareholders of $1.2 billion or $0.87 per share for the first quarter of 2025.
• The company experienced positive loan and deposit growth momentum, with average loans and deposits increasing late in the quarter.
• Truist Financial Corp (NYSE:TFC) is maintaining strong expense discipline, achieving a 130 basis point improvement in their efficiency ratio on a linked quarter basis.
• The company is investing in digital capabilities, with 195,000 new digital accounts opened in the first quarter, reflecting a 13% increase over the previous year.
• Truist Financial Corp (NYSE:TFC) has a strong capital position, allowing for continued share repurchases and dividend payments, with $500 million of share repurchases completed in the first quarter and plans for an additional $750 million in the second quarter.

Negative Points

• Truist Financial Corp (NYSE:TFC) has reduced its revenue outlook due to market volatility and economic uncertainty, with expectations for flat year-over-year investment banking and trading revenue.
• The company reported a 3.2% decrease in total revenue linked quarter, with declines in both net interest income and non-interest income.
• Non-interest income decreased by 5.3% versus the fourth quarter, primarily due to a decline in other income related to certain equity investments.
• Truist Financial Corp (NYSE:TFC) has adjusted its net interest income outlook, now expecting a 3% increase in 2025 versus 2024, impacted by lower medium-term interest rates.
• The company faces challenges in investment banking and capital markets, with lower overall M&A and equity capital markets activity resulting in less than expected growth.

Q & A Highlights

Q: How does Truist's strong capital position influence its decision on share buybacks, especially in light of a potentially slower loan environment? A: William Rogers, CEO, explained that Truist's strong capital position allows the company to capitalize on growth, be opportunistic, and weather any potential storms. The decision to increase buybacks was opportunistic, given the current share price, and reflects confidence in the company's ability to support growth and maintain a strong capital position.

Q: What is Truist's strategy for managing deposit costs in the context of potential lower interest rates? A: Michael Maguire, CFO, stated that Truist has been managing deposit costs with a client-centric and disciplined approach. The company has been proactive in managing its CD portfolio and maturities, and has invested in tools to be more surgical in deposit pricing, which has improved their ability to manage costs effectively.

Q: Can you provide more details on the loan growth outlook and any areas of strength or concern? A: William Rogers, CEO, noted that Truist feels positive about its investments and the resulting loan growth. Commitments are up, and while utilization is slightly up, the growth is driven by production across various sectors like consumer, FIG, energy, healthcare, and middle market. The pipelines are strong, particularly in consumer loans, and the company is seeing growth with new and existing clients.

Q: How is Truist's investment banking and capital markets business performing, and what is the outlook given current market conditions? A: William Rogers, CEO, expressed confidence in the investment banking business, citing strong talent and alignment with corporate and commercial banking. While there is a delay in pipeline pull-through, particularly in M&A, the business is well-positioned for when the market recovers. The trading business is client-focused, which limits its volatility-related gains.

Q: What is the impact of the current economic environment on Truist's net interest income (NII) outlook? A: Michael Maguire, CFO, indicated that the NII outlook has been revised slightly downward due to changes in the interest rate curve, particularly medium-term rates. The expected increase in NII for 2025 is now around 3%, primarily impacted by the curve rather than balance sheet size.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.