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Jun 30, 2021
Truist Q2 2021 Earnings Report
Truist reported strong second-quarter earnings, driven by a negative loan loss provision and strong fee income.
Key Takeaways
Truist Financial Corporation reported a net income of $1.6 billion for the second quarter of 2021, a 73% increase compared to the same period last year. Adjusted net income was $2.1 billion. The results reflect a diverse business mix, strong fee income, and solid expense management. Excellent credit quality and improving economic conditions drove a negative provision.
Earnings per diluted common share were $1.16; adjusted diluted earnings per share were $1.55, up 31% compared to first quarter 2021 and 89% compared to second quarter 2020.
Taxable-equivalent revenue was $5.7 billion; adjusted taxable-equivalent revenue, excluding securities gains and a gain on sale of a business in the prior quarter, was up 3.7% compared to first quarter 2021 and 1.4% compared to second quarter 2020.
Adjusted efficiency ratio improved to 56.1%, compared to 56.9% for first quarter 2021.
Asset quality ratios improved reflecting improving economic conditions and effective problem asset resolution.
Forward Guidance
Truist plans to target a CET1 ratio of approximately 9.75% over the near-term, and accordingly, the Company expects to be able to deploy approximately $4 billion to $5 billion of capital (either in the form of share repurchases or acquisitions) over the next 5 quarters (3Q21-3Q22).
Positive Outlook
- Plans to propose a 7% increase in dividend to $0.48 per share.
- Successful completion of the acquisition of Constellation Affiliated Partners.
- Lower near-term CET1 target to approximately 9.75%, giving additional capacity to deploy incremental capital.
- Strong deposit growth resulting from fiscal and monetary stimulus.
- Improving economic outlook.
Challenges Ahead
- Merger-related and restructuring charges.
- Incremental operating expenses related to the merger.
- Lower purchase accounting accretion.
- Lower rates on earning assets.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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