Truist Financial : 1Q25 Earnings Release

Published: 2025-04-17 06:24:10 ET TFC

News Release

Truist reports first quarter 2025 results

Net income available to common shareholders of

$1.2 billion, or $0.87 per share

Average loans increased $3.3 billion, or 1.1%

Repurchased $500 million in common shares; Dividend and total payout ratios of 59% and 102%

1Q25 Key Financial Data

1Q25 Performance Highlights(4)

(Dollars in billions, except per share data)

1Q25

4Q24

1Q24

•

Net income available to common shareholders was $1.2 billion,

or $0.87 per diluted share

Summary Income Statement

Net interest income - TE

3.56

3.64

3.43

•

Total TE revenues were down 3.2%

Noninterest income

1.39

1.47

1.45

◦

TE net interest income decreased 2.4%; net interest margin

Total revenue - TE

4.95

5.11

4.87

was down six basis points

Noninterest expense

2.91

3.04

2.95

◦

Noninterest income was down 5.3% due to lower other

Net income from continuing operations

1.26

1.29

1.13

income

Net income (loss) from discontinued operations

(0.01)

0.07

Net income

1.26

1.28

1.20

•

Noninterest expense was down 4.3%. Adjusted noninterest

Net income available to common shareholders

1.16

1.22

1.09

expense(1) was down 5.4%, reflecting lower other expense,

Adjusted net income available to common

1.16

1.21

1.22

lower professional fees and outside processing expense, and

shareholders(1)

PPNR - unadjusted(1)(2)

2.04

2.08

1.92

lower equipment expense

PPNR - adjusted(1)(2)

2.08

2.04

•

Average loans and leases HFI were up 1.1% due to increases

Key Metrics

in the commercial and industrial, residential mortgage, and

Diluted EPS

0.87

0.91

0.81

indirect auto portfolios

Adjusted diluted EPS(1)

0.87

0.91

0.90

◦

End of period loans and leases HFI were $308.6 billion, up

BVPS

44.85

43.90

38.97

$2.3 billion, or 0.7%

TBVPS(1)

30.95

30.01

21.64

•

Average deposits increased 0.6% due to increases in time

ROCE

8.1 %

8.4 %

ROTCE(1)

12.3

12.9

16.3

deposits and interest checking, partially offset by declines in

Efficiency ratio - unadjusted(1)(2)

59.3

60.0

61.3

noninterest-bearing deposits and money market and savings

Efficiency ratio - adjusted(1)(2)

56.4

57.7

56.2

accounts

Fee income ratio - unadjusted(1)(2)

28.4

29.0

30.0

◦

The average cost of total deposits was 1.79%, down ten

Fee income ratio - adjusted(1)(2)

28.2

28.8

29.7

basis points, due to the impact of deposit repricing

NIM - TE(2)

3.01

3.07

2.88

•

Asset quality remained strong

NCO ratio

0.60

0.59

0.64

ALLL ratio

1.58

1.59

1.56

◦

Nonperforming loans HFI to HFI loans were up one basis

point

CET1 ratio(3)

11.3

11.5

10.1

◦

Loans 90 days or more past due HFI to HFI loans were up

Average Balances

one basis point, or flat excluding government guaranteed

Assets

532

527

531

loans

Securities

124

125

132

◦ ALLL ratio decreased one basis point

Loans and leases

308

305

309

◦ Net charge-off ratio of 60 basis points, up one basis point

Deposits

392

390

389

Amounts may not foot due to rounding.

CEO Commentary

"We delivered solid first quarter results as we remain focused on executing on our strategy amidst market volatility. We continue to utilize our robust capital position to support the growth needs of our clients, while maintaining effective risk controls. Both average loans and deposits are higher to begin the year, and our expense discipline was evident again this quarter, while asset-quality metrics remained stable and capital ratios strong.

We continue to invest in talent and technology, while our strong capital and liquidity profile leave us well positioned to succeed in a variety of economic environments and continue capitalizing on opportunities for our shareholders.

I am confident that our clear strategic focus and unwavering commitment to our purpose to inspire and build better lives and communities enable us to navigate the uncertainties of the current environment and continue to drive improved performance."

- Bill Rogers, Truist Chairman & CEO

Contact:

Investors:

Brad Milsaps

[email protected]

Media:

Shelley Miller

[email protected]

Net Interest Income, Net Interest Margin, and Average Balances

(Dollars in millions)

Quarter Ended

Change

1Q25

4Q24

1Q24

Link

Interest income(1)

6,036

6,230

6,237

(194)

(3.1)%

(201)

(3.2)%

Interest expense

2,481

2,589

2,812

(108)

(4.2)

(331)

(11.8)

Net interest income(1)

3,555

3,641

3,425

(86)

(2.4)

130

3.8

Net interest margin(1)

3.01 %

3.07 %

2.88 %

(6) bps

13 bps

Average Balances(2)

Total earning assets

476,214

472,639

476,497

3,575

0.8 %

(283)

(0.1)%

Total interest-bearing liabilities

349,059

341,213

347,121

7,846

2.3

1,938

0.6

Yields / Rates(1)

Total earning assets

5.12 %

5.25 %

(13) bps

Total interest-bearing liabilities

2.88

3.02

3.26

(14) bps

(38) bps

Taxable-equivalent net interest income for the first quarter of 2025 was down $86 million, or 2.4%, compared to the fourth quarter of 2024 primarily due to two fewer days. Net interest margin was 3.01%, down six basis points.

Taxable-equivalent net interest income for the first quarter of 2025 was up $130 million, or 3.8%, compared to the first quarter of 2024 primarily due to the balance sheet repositioning in the second quarter of 2024. Net interest margin was 3.01%, up 13 basis points.

- 2 -

Noninterest Income

(Dollars in millions)

Quarter Ended

Change

1Q25

4Q24

1Q24

Link

Wealth management income

344

345

356

(1)

(0.3)%

(12)

(3.4)%

Investment banking and trading income

273

262

323

4.2

(50)

(15.5)

Card and payment related fees

220

231

224

(11)

(4.8)

(4)

(1.8)

Service charges on deposits

230

237

225

(7)

(3.0)

2.2

Mortgage banking income

108

117

(9)

(7.7)

11.3

Lending related fees

2.2

(1)

(1.0)

Operating lease income

12.8

(6)

(10.2)

Securities gains (losses)

(1)

Other income

139

(69)

(49.6)

6.1

Total noninterest income

1,392

1,470

1,446

(78)

(5.3)

(54)

(3.7)

Noninterest income was down $78 million, or 5.3%, compared to the fourth quarter of 2024 primarily due to lower other income, partially offset by higher investment banking and trading income.

Noninterest income was down $54 million, or 3.7%, compared to the first quarter of 2024 primarily due to lower investment banking and trading income and wealth management income.

- 3 -

Noninterest Expense

(Dollars in millions)

Quarter Ended

Change

1Q25

4Q24

1Q24

Link

Personnel expense

1,587

1,630

- %

(43)

(2.6)%

Professional fees and outside processing

364

415

278

(51)

(12.3)

30.9

Software expense

230

232

224

(2)

(0.9)

2.7

Net occupancy expense

163

179

160

(16)

(8.9)

1.9

Equipment expense

112

(30)

(26.8)

(6)

(6.8)

Amortization of intangibles

(9)

(10.7)

(13)

(14.8)

Marketing and customer development

1.4

33.9

Operating lease depreciation

(1)

(2.8)

(5)

(12.5)

Regulatory costs

152

23.2

(83)

(54.6)

Restructuring charges

(13)

(25.5)

Other expense

188

249

186

(61)

(24.5)

1.1

Total noninterest expense

2,906

3,035

2,953

(129)

(4.3)

(47)

(1.6)

Noninterest expense was down $129 million, or 4.3%, compared to the fourth quarter of 2024 due to lower other expense, professional fees and outside processing expense, and equipment expense, partially offset by higher restructuring charges. Restructuring charges increased $27 million driven by higher costs associated with facilities optimization initiatives. Adjusted noninterest expense, which excludes the FDIC special assessment adjustment and restructuring charges, decreased $164 million, or 5.4%, compared to the prior quarter.

Noninterest expense was down $47 million, or 1.6%, compared to the first quarter of 2024 due to lower regulatory costs driven by the prior period FDIC special assessment adjustment of $75 million and lower personnel expense, partially offset higher professional fees and outside processing expense. Restructuring charges for both quarters include severance charges as well as costs associated with facilities optimization initiatives. Adjusted noninterest expense, which excludes the FDIC special assessment adjustment and restructuring charges, increased $41 million, or 1.5%, compared to the earlier quarter.

- 4 -

Provision for Income Taxes

(Dollars in millions)

Quarter Ended

Change

1Q25

4Q24

1Q24

Link

Provision for income taxes

274

265

232

3.4%

18.1%

Effective tax rate

17.9 %

17.1 %

17.0 %

80 bps

90 bps

The higher effective tax rate for the first quarter of 2025 compared to the fourth quarter of 2024 is primarily due to higher discrete tax expense.

The higher effective tax rate for the first quarter of 2025 compared to the first quarter of 2024 is primarily due to higher forecasted 2025 pre-tax earnings, partially offset by lower discrete tax expense.

Average Loans and Leases

(Dollars in millions)

1Q25

4Q24

Change

% Change

Commercial:

Commercial and industrial

155,214

153,209

2,005

1.3 %

CRE

19,832

20,504

(672)

(3.3)

Commercial construction

8,734

8,261

473

5.7

Total commercial

183,780

181,974

1,806

1.0

Consumer:

Residential mortgage

55,658

54,390

1,268

2.3

Home equity

9,569

9,675

(106)

(1.1)

Indirect auto

23,248

22,790

458

2.0

Other consumer

29,291

29,355

(64)

(0.2)

Total consumer

117,766

116,210

1,556

1.3

Credit card

4,849

4,926

(77)

(1.6)

Total loans and leases held for investment

306,395

303,110

3,285

1.1

Average loans and leases HFI were $306.4 billion, an increase of $3.3 billion, or 1.1%, compared to the prior quarter.

End of period loans and leases HFI were $308.6 billion, up $2.3 billion, or 0.7%, primarily due to increases in the commercial and industrial, indirect auto, and residential mortgage portfolios, partially offset by a decline in the CRE portfolio.

Average Deposits

(Dollars in millions)

1Q25

4Q24

Change

% Change

Noninterest-bearing deposits

105,895

107,968

(2,073)

(1.9)%

Interest checking

109,208

107,075

2,133

2.0

Money market and savings

136,897

138,242

(1,345)

(1.0)

Time deposits

40,204

36,757

3,447

9.4

Total deposits

392,204

390,042

2,162

0.6

Average deposits for the first quarter of 2025 were $392.2 billion, an increase of $2.2 billion, or 0.6%, compared to the prior quarter.

Average noninterest-bearing deposits decreased 1.9% compared to the prior quarter and represented 27.0% of total deposits for the first quarter of 2025 compared to 27.7% for the fourth quarter of 2024. Average interest checking increased 2.0%. Average money market and savings accounts decreased 1.0%. Average time deposits increased 9.4%.

- 5 -

Capital Ratios

1Q25

4Q24

3Q24

2Q24

1Q24

Risk-based:

(preliminary)

CET1

11.3 %

11.5 %

11.6 %

10.1 %

Tier 1

12.7

12.9

13.2

11.7

Total

14.7

15.0

15.3

15.4

13.9

Leverage

10.3

10.5

10.8

10.5

9.5

Supplementary leverage

8.7

8.8

9.1

8.9

8.0

Capital ratios remained strong compared to the regulatory requirements for well capitalized banks. Truist's CET1 ratio was 11.3% as of March 31, 2025, down 20 basis points compared to December 31, 2024 due to capital returned to shareholders, an increase in risk-weighted assets, and the final CECL phase-in, partially offset by current quarter earnings.

Truist declared common dividends of $0.52 per share during the first quarter of 2025 and repurchased $500 million of common stock. The dividend and total payout ratios for the first quarter of 2025 were 59% and 102%, respectively.

Truist's average consolidated LCR was 111% for the three months ended March 31, 2025, compared to the regulatory minimum of 100%.

- 6 -

Asset Quality

(Dollars in millions)

1Q25

4Q24

3Q24

2Q24

1Q24

Total nonperforming assets

$ 1,618

$ 1,477

$ 1,528

$ 1,476

Total loans 90 days past due and still accruing

616

587

518

489

538

Total loans 30-89 days past due and still accruing

1,619

1,949

1,769

1,791

1,716

Nonperforming loans and leases as a percentage of loans and leases held for investment

0.48 %

0.47 %

0.48 %

0.46 %

0.45 %

Loans 30-89 days past due and still accruing as a percentage of loans and leases

0.52

0.64

0.58

0.59

0.56

Loans 90 days or more past due and still accruing as a percentage of loans and leases

0.20

0.19

0.17

0.16

0.18

Loans 90 days or more past due and still accruing as a percentage of loans and leases, excluding

0.05

0.04

government guaranteed

Allowance for loan and lease losses as a percentage of loans and leases held for investment

1.58

1.59

1.60

1.57

1.56

Ratio of allowance for loan and lease losses to net charge-offs

2.6x

2.7x

2.9x

2.7x

2.4x

Ratio of allowance for loan and lease losses to nonperforming loans and leases held for investment

3.3x

3.4x

3.3x

3.4x

Applicable ratios are annualized.

Nonperforming assets totaled $1.6 billion at March 31, 2025, up $141 million compared to December 31, 2024, due to increases in the commercial and industrial and the LHFS portfolios. Nonperforming loans and leases held for investment were 0.48% of loans and leases held for investment at March 31, 2025, up one basis point compared to December 31, 2024.

Loans 90 days or more past due and still accruing totaled $616 million at March 31, 2025, up one basis point as a percentage of loans and leases compared with the prior quarter. Excluding government guaranteed loans, the ratio of loans 90 days or more past due and still accruing as a percentage of loans and leases was 0.05% at March 31, 2025, flat compared to December 31, 2024.

Loans 30-89 days past due and still accruing totaled $1.6 billion at March 31, 2025, down $330 million, or 12 basis points, as a percentage of loans and leases, compared to the prior quarter primarily due to a decrease in the indirect auto, residential mortgage, commercial and industrial, and CRE portfolios.

The allowance for credit losses was $5.2 billion at March 31, 2025 and included $4.9 billion for the allowance for loan and lease losses and $296 million for the reserve for unfunded commitments. The ALLL ratio was 1.58%, down one basis point compared with December 31, 2024. The ALLL covered nonperforming loans and leases held for investment 3.3x, compared to 3.4x at December 31, 2024. At March 31, 2025, the ALLL was 2.6x annualized net charge-offs, compared to 2.7x at December 31, 2024.

Provision for Credit Losses

(Dollars in millions)

Quarter Ended

Change

1Q25

4Q24

1Q24

Link

Provision for credit losses

458

471

500

(13)

(2.8)% $

(42)

(8.4)%

Net charge-offs

454

453

490

0.2

(36)

(7.3)

Net charge-offs as a percentage of average loans and leases

0.60 %

0.59 %

0.64 %

1 bps

(4) bps

Applicable ratios are annualized.

The provision for credit losses was $458 million for the first quarter of 2025 compared to $471 million for the fourth quarter of 2024.

The provision for credit losses was $458 million for the first quarter of 2025 compared to $500 million for the first quarter of 2024.

- 7 -

Earnings Presentation and Quarterly Performance Summary

Investors can access the live first quarter 2025 earnings call at 8 a.m. ET today by webcast or dial-in as follows:

Webcast: app.webinar.net/KNd8VGQjew3

Dial-in: 1-877-883-0383, passcode 0999346

Additional details: The news release and presentation materials are available at ir.truist.comunder "Events & Presentations." A replay of the call will be available on the website for 30 days.

The presentation, including an appendix reconciling non-GAAP disclosures, and Truist's First Quarter 2025 Quarterly Performance Summary, which contains detailed financial schedules, are available at https://ir.truist.com/ earnings.

About Truist

Truist Financial Corporation is a purpose-driven financial services company committed to inspiring and building better lives and communities. Headquartered in Charlotte, North Carolina, Truist has leading market share in many of the high-growth markets in the U.S. and offers a wide range of products and services through wholesale and consumer businesses, including consumer and small business banking, commercial and corporate banking, investment banking and capital markets, wealth management, payments, and specialized lending businesses. Truist is a top-10 commercial bank with total assets of $536 billion as of March 31, 2025. Truist Bank, Member FDIC. Learn more at Truist.com.

#-#-#

Glossary of Defined Terms

Term

Definition

ALLL

Allowance for loan and lease losses

BVPS

Book value (common equity) per share

CECL

Current expected credit loss model

CEO

Chief Executive Officer

CET1

Common equity tier 1

CRE

Commercial real estate

FDIC

Federal Deposit Insurance Corporation

GAAP

Accounting principles generally accepted in the United States of America

HFI

Held for investment

LCR

Liquidity Coverage Ratio

LHFS

Loans held for sale

Compared to first quarter of 2024

Link

Compared to fourth quarter of 2024

NCO

Net charge-offs

NIM

Net interest margin, computed on a TE basis

Not meaningful

PPNR

Pre-provision net revenue

ROCE

Return on average common equity

ROTCE

Return on average tangible common equity

TBVPS

Tangible book value per common share

Taxable-equivalent

- 8 -

Non-GAAP Financial Information

This news release contains financial information and performance measures determined by methods other than in accordance with GAAP. Truist's management uses these "non-GAAP" measures in their analysis of Truist's performance and the efficiency of its operations. Management believes these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results with prior periods and demonstrate the effects of significant items in the current period. Truist believes a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Below is a listing of the types of non-GAAP measures used in this news release:

A reconciliation of each of these non-GAAP measures to the most directly comparable GAAP measure is included in the appendix to Truist's First Quarter 2025 Earnings Presentation, which is available at https://ir.truist.com/earnings.

- 9 -

Forward Looking Statements

From time to time we have made, and in the future will make, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as "believe," "expect," "anticipate," "intend," "pursue," "seek," "continue," "estimate," "project," "outlook," "forecast," "potential," "target," "objective," "trend," "plan," "goal," "initiative," "priorities," or other words of comparable meaning or future-tense or conditional verbs such as "may," "will," "should," "would," or "could." Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, or results.

This news release, including any information incorporated by reference herein, contains forward-looking statements. We also may make forward-looking statements in other documents that are filed or furnished with the SEC. In addition, we may make forward-looking statements orally or in writing to investors, analysts, members of the media, and others. All forward- looking statements, by their nature, are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Actual future objectives, strategies, plans, prospects, performance, conditions, and results may differ materially from those set forth in any forward-looking statement. While no list of assumptions, risks, and uncertainties could be complete, some of the factors that may cause actual results or other future events or circumstances to differ from those in forward-looking statements include:

Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except as required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, or Current Report on Form 8-K.

- 10 -

Disclaimer

Truist Financial Corporation published this content on April 17, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 17, 2025 at 10:23 UTC.