Morningstar

Truist Earnings: Mostly Steady Performance, Outlook Essentially Unchanged

While average loans grew sequentially and were healthy, the firm did see some deposit pressure.

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Securities in This Article
Truist Financial Corp
(TFC)

Key Morningstar Metrics for Truist Financial

What We Thought of Truist Financial’s Earnings

Truist Financial TFC reported adjusted second-quarter earnings per share of $0.91, up from $0.87 in the first quarter and flat from the year-ago period. Net interest income of $3.64 billion was up 2% year over year.

Why it matters: Truist’s results were mostly in line with the FactSet consensus estimate, and the firm reiterated its revenue outlook for 2025.

  • While average loans grew 2% sequentially and were healthy, in our view, the firm did see some deposit pressure as its interest-bearing deposit rate rose 6 basis points sequentially. In addition, the company’s mix of non-interest-bearing deposits was 26.6%, down from 27.0% in the first quarter.
  • As a result, the net interest margin of 3.02% was essentially flat relative to 3.01% in the first quarter and 3.02% in the year-ago period. The firm’s growth in NII is generally driven by asset (loan) growth.

The bottom line: Overall, there was little in Truist’s earnings release that would alter our long-term view of the firm. We are maintaining our narrow moat rating and $46 per share fair value estimate. We regard the stock as fairly valued.

Key stats: Adjusted net interest income was up 2% sequentially but down 2% from the year-ago quarter, as investment banking activity has remained weak. Adjusted non-interest income was up 3% and essentially in line with our expectations.

  • Credit remains healthy, in our view. Non-performing loans as a percent of total loans declined in the quarter, and net chargeoffs of 0.51% were also an improvement. As a result, Truist now expects 2025 net chargeoffs to be in a range of 0.55%-0.60%, versus a previous expectation of about 0.60%.

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

This article was generated with the help of automation and reviewed by Morningstar editors. Learn more about Morningstar’s use of automation.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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