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TRUIST FINANCIAL CORP (TFC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 was operationally solid: NII and deposits held up, asset quality stayed stable, and capital was strong; GAAP and adjusted EPS were both $0.91, with TE revenue $5.11B and NIM 3.07% .
  • Management guided Q1 2025 down on normal seasonality/day-count (revenue ~-2%, NII ~-2%, adjusted expenses ~-3%), but expects an uptrend in NII beginning Q2 and positive operating leverage for FY 2025 (revenue +3.0–3.5%, expenses ~+1.5%) .
  • Capital return is active: CET1 ended at 11.5% with $500M of Q4 buybacks and another ~$500M planned for Q1 2025; full-year 2024 capital returned was $3.8B .
  • Key 2025 NII drivers are fixed-rate asset repricing (≈$13B securities cash flows, ≈$42B fixed loans) and swaps that protect against lower short rates; deposit costs fell 19 bps in Q4 and cumulative interest-bearing beta reached ~40% (total ~29%) .
  • Wall Street S&P Global consensus for Q4 2024 was unavailable at the time of this report due to data access limits; we cannot formally score beats/misses vs consensus (will update once available).

What Went Well and What Went Wrong

  • What Went Well

    • Deposit mix/costs improved: average deposits rose 1.5% q/q to $390.0B while total deposit costs fell 19 bps to 1.89%; NIBD ticked up to 27.7% of deposits .
    • Fee momentum quality: investment banking/trading rose 58.8% y/y; service charges and mortgage banking were also higher q/q, underscoring diversification .
    • Management reinforced 2025 upward NII trajectory and positive operating leverage, citing $13B securities cash flows to reinvest at higher yields and ~$42B of fixed-rate loans to reprice; swaps protect NII if short rates fall .
    • Quote: “We see a significant opportunity to improve our profitability over the medium term… and we would expect to show progress in 2025.” — CEO Bill Rogers .

  • What Went Wrong

    • Q4 adjusted efficiency ratio deteriorated 250 bps q/q to 57.7% on higher professional fees and equipment expense; adjusted noninterest expense rose 4% q/q .
    • NIM compressed 5 bps q/q to 3.07% as asset yields lagged and the securities book grew; management also guided Q1 NII down ~2% on day count/seasonality .
    • Credit normalization persisted: NCO ratio rose 4 bps q/q to 0.59% (driven by C&I and seasonal indirect auto) though overall asset quality remained in a narrow, stable band .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Total Revenue (TE, $B)4.940 5.140 5.111
Net Interest Income (TE, $B)3.577 3.657 3.641
Noninterest Income ($B)1.363 1.483 1.470
Diluted EPS ($)(3.87) 0.99 0.91
NIM (TE, %)2.95% 3.12% 3.07%
Adjusted Efficiency Ratio (%)55.0% 55.2% 57.7%
Average Loans ($B)313.832 304.578 304.609
Average Deposits ($B)395.333 384.344 390.042
NCO Ratio (%)0.57% 0.55% 0.59%
CET1 (%)10.1% 11.6% 11.5%

Segment snapshot (earnings and operating expense mix)

Segment (USD mm)Q3 2024Q4 2024
Consumer & Small Business – NII2,656 2,591
Consumer & Small Business – Noninterest Income506 535
Consumer & Small Business – Total Noninterest Expense1,663 1,741
Consumer & Small Business – Segment Net Income872 792
Wholesale – NII1,636 1,636
Wholesale – Noninterest Income1,048 1,038
Wholesale – Total Noninterest Expense1,235 1,299
Wholesale – Segment Net Income1,080 1,001

Key KPIs

KPIQ4 2023Q3 2024Q4 2024
Avg Total Deposit Cost (%)1.92% 2.08% 1.89%
NPLs / Loans HFI (%)0.44% 0.48% 0.47%
ALLL / Loans HFI (%)1.54% 1.60% 1.59%
LCR (%)112% 112% 109%
TBVPS ($)21.83 30.64 30.01

Non-GAAP note: Adjusted EPS was also $0.91 in Q4; selected items included $11M restructuring charges and an $8M FDIC special assessment reduction .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted Revenue (TE)Q1 2025 vs Q4 2024n/aDown ~2%New guide
Net Interest IncomeQ1 2025 vs Q4 2024n/aDown ~2%New guide
Noninterest IncomeQ1 2025 vs Q4 2024n/aDown ~2.5%New guide
Adjusted Expenses (incl. amort.)Q1 2025 vs Q4 2024n/aDown ~3%New guide
Avg DepositsQ1 2025n/a~-1% (seasonal muni outflows)New guide
Adjusted Revenue (TE)FY 2025 vs FY 2024“Expect positive op leverage in 2025” (qualitative) Up 3.0–3.5% vs $20.1B 2024Raised to quantified range
Adjusted Expenses (incl. amort.)FY 2025 vs FY 2024“Manage to positive op leverage” (qualitative) Up ~1.5%New quantification
Net Charge-OffsFY 2025~60 bps (implied from 2024) ~60 bpsMaintained
Effective Tax RateFY 2025n/a~17% (~20% FTE)New guide
Share RepurchasesQ1 2025~$500M per quarter (implied ongoing) ~$500M planned in Q1Maintained

For reference, prior Q4 2024 (from Q3 call) guidance was: revenue -1.5% q/q, NII -1.5% q/q, noninterest income -2% q/q, and adjusted expenses +4% q/q; full-year 2024 revenue ~-0.5% to -1%, expenses slightly lower y/y .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
Digital & tech executionQ2: Strong digital adoption; 180k new accounts; Zelle +39% y/y . Q3: Launched One View enhancements; 200k new digital accounts; digital apps ↑, conversion ↑ .7.1M active digital users; 730k new digital loan/deposit accounts in 2024; digital txns +13% y/y; launched electronic bill presentment .Improving scale and monetization
Deposit betas & NIMQ2: Rate-neutral profile; early benefit from repositioning . Q3: Guided NIM -~1.5% q/q with betas catching up; improvement expected in 2025 .Deposit costs -19 bps q/q; total beta ~29% and interest-bearing beta ~40%; Q1 NII day-count headwind then uptrend .Pressure easing; setup for 2025 NII growth
Capital & buybacksQ2: Announced $5B authorization; targeting ~$500M/qtr . Q3: Executed $500M; reiterated cadence .Q4 executed $500M; CET1 11.5%; plan ~$500M in Q1 2025 .Consistent capital return
Regional growth focusQ2/Q3: Build-out in middle market; talent adds .Emphasized NJ/PA/TX growth; +25 bankers; ~$3.5B production in Philly/TX; +5k net new TX clients .Expanding beyond core SE footprint
CRE office riskQ2: Office ~1.6% of loans; reserves increased . Q3: Office reserve 10.4% .Office 1.5% of loans, reserve 11.1%; NPLs stable; stress manageable with proactive resolution .Stable/manageable with high reserves
2025 NII driversQ2: Securities yields reset higher; repositioning impact . Q3: Expected NII growth with betas catching up .~$13B securities cash flows to reinvest; ~$42B fixed loans to reprice; receive-fixed swaps peak ~$63B in Q4’25 .Clear multi-pronged tailwinds

Management Commentary

  • Profitability path: “We see a significant opportunity to improve our profitability over the medium term, and we would expect to show progress in 2025.” — CEO Bill Rogers .
  • NII cadence: “Q1… a little bit of a step back… really just day count driven. From there, we would expect to begin to see positive trend… modest loan and deposit growth… betas… on our way to 50 next year.” — CFO Mike Maguire .
  • Rate sensitivity: Two cuts (Mar/Sep) in base case; later/fewer cuts a modest headwind but “manageable… inside of our guide” .
  • Deposit costs/betas: Total deposit cost fell to 1.89% (interest-bearing 2.62%); cumulative total deposit beta ~29%, interest-bearing ~40% .
  • Regional expansion: NJ/PA/TX investments; ~25 new bankers; ~$3.5B production in Philadelphia/TX; +5k net new clients in TX .
  • Office CRE: Portfolio 1.5% of loans; reserve ↑ to 11.1%; proactive management; manageable size .
  • Capital return: CET1 11.5%; Q4 buyback $500M; targeting ~$500M in Q1 2025 .

Q&A Highlights

  • NII path and betas: After Q1 day-count headwind, NII should trend higher with modest balance growth and betas largely caught up; base case assumes two 2025 cuts (Mar/Sep) .
  • Loan growth: Expect low single-digit end-of-period growth in 2025; production improved in key consumer (mortgage, indirect auto, Sheffield, Service Finance) and middle market; quality emphasized .
  • Regional strategy: Strong organic push in NJ/PA/TX; talent adds and potential branch investments; organic vs bank M&A preference .
  • Capital targets: Longer-term CET1 target ~10% under evolving rules; current 11.5% offers flexibility to grow and repurchase .
  • Swaps timeline: Receive-fixed effective ~$45B in Q4’24, rising toward ~$63B by Q4’25; NII hedge impact expected to be relatively stable through 2025 .

Estimates Context

  • We attempted to retrieve S&P Global consensus for Q4 2024 (EPS and revenue), prior two quarters, and next quarter, but the S&P API returned an access limit error; therefore, we cannot formally benchmark against consensus in this report. We will update once S&P Global estimates are available.
  • Management noted internal outperformance on NII versus expectations due to disciplined deposit pricing and end-of-period loan growth .

Key Takeaways for Investors

  • Setup for 2025 NII growth is clear: higher reinvestment yields on securities, fixed-rate loan repricing, and swaps that mitigate downside from short-rate cuts .
  • Positive operating leverage in 2025 is now quantified (revenue +3.0–3.5% vs expenses ~+1.5%), with Q1 a seasonal trough on day count/seasonality .
  • Deposit costs are inflecting down (1.89% Q4, -19 bps q/q) with improving mix; this is a tailwind for margins as betas catch up .
  • Capital return continues alongside balance sheet growth: CET1 11.5%, $500M buybacks in Q4 and planned again in Q1 2025 .
  • Credit normalization manageable: NCOs at 0.59%; office CRE is small (1.5% of loans) and well-reserved (11.1%) with proactive resolution .
  • Execution priorities (NJ/PA/TX, middle market, payments/wealth, digital) underpin fee growth and primacy gains across cycles .
  • Near-term trading: Q1 guide implies a softer print (day count, seasonal deposits), but trajectory turns more constructive into Q2 and beyond as repricing and mix benefits accrue .

Sources: Truist Q4 2024 8‑K, Quarterly Performance Summary and earnings deck ; Q4 2024 earnings call transcript ; Q3 2024 call (context) ; Q2 2024 call (context) .