Q4 2024 Earnings Summary
- Truist expects revenue to increase by 3% to 3.5% in 2025, while keeping expense growth at only 1.5%, implying positive operating leverage of 150 to 200 basis points. The company plans to achieve this by leveraging prior investments and focusing on expanding with existing clients, leading to high returns and good leverage.
- Truist has a strong capital position, enabling them to continue share repurchases at the pace of $500 million per quarter, while also accommodating loan growth. The CEO stated that they are in a unique position to grow and distribute capital, emphasizing their ability to reward shareholders along the way.
- The company is seeing progress in deposit growth and momentum in markets affected by the merger, and plans to expand offensively in other markets like Texas, Pennsylvania, and New Jersey, which are also their markets. This provides opportunities to gain disproportionately and quickly, not only defending existing market share but also growing incrementally.
- Net Interest Income Growth Depends on Rate Cuts: The company's net interest income growth outlook assumes two reductions in the Fed funds rate in 2025, one in March and another in September. If these rate cuts do not occur as expected, it could present a headwind to net interest income growth and challenge the ability to achieve the projected 3% to 3.5% revenue increase.
- Intense Competition in Key Markets: The company acknowledges operating in highly competitive markets. Competition in core markets like the Southeast is intense, and expanding into markets like Pennsylvania, New Jersey, and Texas may present challenges. This could impact Truist's ability to grow deposits and loans, potentially limiting market share gains. ,
- Risk of Higher Expense Growth: While the company expects to limit expense growth to approximately 1.5% in 2025, variable compensation tied to stronger-than-expected revenue, particularly in investment banking and wealth management, could cause expenses to exceed projections. This may negatively affect the company's efficiency ratio and profitability targets. ,
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | Declined from $8,421M in Q4 2023 to $5,111M in Q4 2024 (–39%) | Revenue declined sharply; this drop suggests that revenue drivers in Q4 2023—possibly including higher noninterest income or one‐off items—were not repeated in Q4 2024. The steep decrease points to weakened core revenue channels, emphasizing the need to assess underlying market or business shifts. |
Operating Income (EBIT) | Turned from a loss of –$5,154M in Q4 2023 to a gain of $1,554M in Q4 2024 | EBIT reversed dramatically; the turnaround is likely due to significant cost adjustments including an 87% reduction in D&A and improved expense management, which offset the revenue pressures. The improvement from a deep loss shows that prior period operating challenges were addressed through strategic actions. |
Net Income | Rebounded from –$5,090M in Q4 2023 to $1,276M in Q4 2024 | Net income recovered strongly; the reversal from a significant loss to a positive figure was driven by the turnaround in operating income and tighter cost control, reversing previous period profitability issues. |
Earnings Per Share (EPS) | Improved from –$3.88 in Q4 2023 to $0.92 in Q4 2024 (up by $0.19 or 24%) | EPS improvement mirrors the net income recovery; the movement from a negative to a positive EPS underscores the effect of operational turnarounds and cost discipline taken since Q4 2023, driving shareholder value enhancement. |
Depreciation & Amortization | Dropped from $639M in Q4 2023 to $84M in Q4 2024 (87% decline) | D&A expenses fell dramatically; the 87% decline suggests that significant amortization expense incurred in Q4 2023 was nonrecurring or due to a higher base of intangible assets then, and that the asset base or related adjustments were lower in Q4 2024, reflecting deliberate cost adjustments. |
Interest Expense | Decreased by approximately 5% from $2,723M in Q4 2023 to $2,589M in Q4 2024 | Interest costs declined modestly; a 5% reduction indicates improvements in funding costs and possibly a lower reliance on high‑cost debt, contributing to overall improved profitability despite continued revenue challenges. |
Shareholder Returns & Cash Flow | In Q4 2024: $500M in share repurchases and $761M in dividends; Net cash change of $128M | Capital return initiatives remained robust; despite a steep revenue decline, the company maintained solid cash flow to support $500M in share buybacks and $761M in dividend payments, reflecting confidence in liquidity and a strategic focus on rewarding shareholders. |
Balance Sheet Highlights | As of Q4 2024: Cash & Cash Equivalents at $39,768M; Short-term Debt $29,205M; Long-term Debt $34,956M; Shareholders’ Equity at $63,679M | The balance sheet shows a strong liquidity and capital structure; high cash levels and robust equity provide a cushion against revenue pressures, indicating that the measures taken to improve operations and reduce costs have also supported overall financial stability compared to previous periods. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue | Q4 2024 | decrease 1.5% from Q3 ‘24 revenue of $5.1B | no current guidance | no current guidance |
Net interest income | Q4 2024 | decrease 1.5% | no current guidance | no current guidance |
Noninterest income | Q4 2024 | decline 2% | no current guidance | no current guidance |
Adjusted expenses | Q4 2024 | increase 4% from Q3 ’24 expenses of $2.8B | no current guidance | no current guidance |
Net interest margin | Q4 2024 | 3.05–3.06% | no current guidance | no current guidance |
Effective tax rate | Q4 2024 | 17.5% or 20% on TE basis | no current guidance | no current guidance |
Share repurchases | Q4 2024 | $500M | no current guidance | no current guidance |
Revenue | FY 2024 | decline 0.5% to 1% | no current guidance | no current guidance |
Adjusted expenses | FY 2024 | slightly lower than 2023 | no current guidance | no current guidance |
Net charge-offs | FY 2024 | closer to 60 bps | no current guidance | no current guidance |
Revenue | Q1 2025 | no prior guidance | decrease 2% from Q4 ’24 revenue of $5.1B | no prior guidance |
Net interest income | Q1 2025 | no prior guidance | decrease 2% | no prior guidance |
Noninterest income | Q1 2025 | no prior guidance | decrease 2.5% | no prior guidance |
Adjusted expenses | Q1 2025 | no prior guidance | decline 3% vs. Q4 ’24 | no prior guidance |
Revenue growth | FY 2025 | no prior guidance | 3% to 3.5% | no prior guidance |
Net interest income | FY 2025 | no prior guidance | low single-digit EOP loan growth, 2 Fed rate cuts assumed | no prior guidance |
Noninterest income | FY 2025 | no prior guidance | low single-digit growth | no prior guidance |
Adjusted expenses | FY 2025 | no prior guidance | increase ~1.5% | no prior guidance |
Operating leverage | FY 2025 | no prior guidance | +150 to +200 bps | no prior guidance |
Net charge-offs | FY 2025 | no prior guidance | ~60 bps | no prior guidance |
Effective tax rate | FY 2025 | no prior guidance | ~17% or 20% on TE basis | no prior guidance |
Share repurchases | FY 2025 | no prior guidance | ~$500M in Q1 2025, similar pace thereafter | no prior guidance |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Revenue | Q4 2024 | Expected to decrease 1.5% from Q3 2024 adjusted revenue of $5.1 billion(≈$5.024B) | $5,111 million | Beat |
Share Repurchases | Q4 2024 | Targeting approximately $500 million in share repurchases | $500 million | Met |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Revenue Growth and Guidance | Q3 2024: Forecasted a 1.5% decrease in Q4 2024 revenue. Q2 2024: Anticipated 1–2% Q3 revenue increase. Q1 2024: Projected full-year decline of 1–3%. | Expects 3%–3.5% revenue growth in 2025, driven by net interest income and noninterest income, assuming two Fed rate cuts. | Transitioning from mild declines in 2024 to modest growth in 2025. |
Positive Operating Leverage | Q3 & Q2 2024: Highlighted intent to achieve positive operating leverage in 2025. Not specifically mentioned in Q1 2024. | Expects 150–200 bps of positive operating leverage in 2025, supported by disciplined expense growth of 1.5%. | Recurring focus on achieving leverage, with more confidence in 2025 targets. |
Expense Management | Q3 2024: Expected year-over-year decrease. Q2 2024: Commitment to flat expenses. Q1 2024: Flat vs. 2023. | Projects expenses up 1.5% in 2025, balancing investments with discipline. | Consistently prioritizing cost discipline while allowing for strategic investments. |
Capital Position and Share Repurchases | Q3 2024: CET1 at 11.6% with $500M share repurchases each in Q3 and Q4. Q2 2024: Authorized $5B repurchase, supported by TIH sale. Q1 2024: CET1 at 10.1% pre-TIH-sale proceeds. | CET1 ratio 11.5%; repurchased $1B in 2024 and targets $500M in Q1 2025. | Strong capital deployment continues, aided by TIH sale proceeds. |
Loan Growth | Q3 2024: Average loans declined 1%. Q2 2024: Down 0.7% on weaker demand. Q1 2024: Muted overall but stronger consumer pipelines. | Low single-digit end-of-period loan growth forecast; current quarter-end loans up 1.1%. | Gradual improvement from earlier declines, still cautious outlook. |
Deposit Growth and Mix | Q3 2024: Deposits down 1%, stable outlook. Q2 2024: Slight 0.3% decline. Q1 2024: Costs up 11 bps, shift to higher-rate accounts. | Average deposits rose 1.5%; deposit costs down 19 bps sequentially. | Slight rebound in Q4, although deposit pricing remains competitive. |
Rate Environment and Net Interest Income | Q3 2024: Two Q4 2024 cuts, slight NIM compression. Q2 2024: One cut in November, 4.5% NII gain. Q1 2024: Assumed three cuts in 2024, NII pressured by deposit costs. | Guided by two Fed rate cuts in 2025, expects NIM improvement after Q1 day-count impact. | Moving from pressure on NII toward modest stability/improvement with anticipated rate cuts. |
Investment Banking Performance | Q3 2024: Drove 3.1% noninterest income growth. Q2 2024: Continued momentum, strong M&A/DCM. Q1 2024: Robust M&A and capital markets fees. | Up 46% year-over-year; highest since 2021, now 9% of total revenue. | Consistently strong, expanding across multiple capital markets products. |
Technology Platform and Investments | Q3 2024: 130 digital enhancements, 35% increase in new digital clients. Q2 2024: Ongoing platform builds, no large lump investments. Q1 2024: T3 strategy, significant digital deposit growth. | Continues to expand digital adoption (7.1M active users), focusing on client self-service. | Sustained digital investments yielding higher client adoption and efficiency gains. |
Competition in Key Markets | Q3 2024: Confident despite new entrants in Southeast. Q2 2024: No direct mention. Q1 2024: Markets remain rational; net new account growth. | Strong but rational, sees opportunities in established footprint; no “crazy” pricing. | Competition acknowledged but viewed as manageable in growth markets. |
Expansion into New Markets | Q3 2024: Asserted no need to enter entirely new regions. Q2 2024: No direct mention. Q1 2024: Mentioned new industry verticals, branch investments. | Focus on organic growth in existing geographies (NJ, PA, TX) with new bankers and significant production. | Mixed signals quarter-to-quarter, but currently emphasizing deeper expansion in selected regions. |
Sale of Truist Insurance Holdings (TIH) | Q3 2024: Provided $36M pretax gain. Q2 2024: Closed in May, raising $9.5B in capital. Q1 2024: Expected to close Q2, +230 bps CET1. | One-time fee revenues in 2024 will not recur; contributed to year-end capital ratio of 11.5%. | Completed in Q2, fueling capital strength and affecting fee income comparisons. |
Underperformance of Stock Price | Q3 2024: Analyst concern over lagging share performance. Q2 2024: No mention. Q1 2024: Addressed shareholder dissatisfaction vs. peers. | No direct mention. | Topic not discussed in the current period; was sporadically raised in prior quarters. |
Risk Infrastructure | Q3 2024: Ongoing enhancements in data, AI, and cybersecurity. Q2 2024: Emphasis on durable risk framework. Q1 2024: Strengthening credit risk, raised office loan reserves. | Invests in cybersecurity, new CRO appointed; balancing growth with strong risk controls. | Consistent buildup of risk capabilities to meet evolving regulatory and operational needs. |
Merger Integration | Q3 2024: Declared full transition beyond merger tasks. Q2 2024: Focused on post-merger technology platform competitiveness. Q1 2024: Returned to pre-merger satisfaction levels. | Leveraging merger-era investments for higher returns; major integration efforts considered complete. | Integration largely finished, shifting attention to refining and optimizing the unified platform. |