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Truist Financial Corp.’s Stock Rises Despite Fourth-Quarter Loss


Truist Financial Corp. saw an increase in its stock value on Thursday, with Wall Street largely disregarding the bank’s loss in the fourth quarter. Despite this loss, the bank reported stronger-than-expected revenue.

The Numbers

Truist Financial (TFC, +2.03%) announced that it recorded a fourth-quarter loss of $5.17 billion, equivalent to $3.85 per share. In comparison, the bank earned $1.07 billion, or 80 cents per share, during the same period the previous year.

However, when adjusted for certain factors, the bank’s net income for the fourth quarter came out to be 81 cents per share, surpassing the FactSet consensus estimates of 68 cents per share.

Rise in Stock Value

Despite the loss, Truist Financial’s stock increased by 2% on Thursday morning.

Factors Behind the Loss

The bank’s fourth-quarter loss can be attributed to a noncash goodwill impairment of $6.1 billion (equivalent to $4.53 per share). Truist Financial primarily attributed this impairment to the continued impact of higher interest rates and discount rates, as well as a sustained decline in banking industry share prices.

Federal Deposit Insurance Corp. Assessment

Truist Financial also disclosed an assessment of $507 million (or 29 cents per share) by the Federal Deposit Insurance Corp. This assessment is related to bank failures in 2023 and amounts to $387 million after taxes.

However, the bank clarified that this charge will not affect its regulatory capital ratios, liquidity, dividend payments, or its ability to provide services to its clients.

Positive Underlying Results

Despite the loss and assessments, Truist Financial emphasized that its underlying results were positive. The bank’s ongoing transformation aims to create a simpler, more efficient, and profitable company, according to Chief Executive Bill Rogers.

Truist Financial Reports Better-Than-Expected Fourth-Quarter Results

Truist Financial, based in Charlotte, N.C., has announced its fourth-quarter revenue, which exceeded analysts’ expectations. Despite a slight drop from the previous year, the bank reported revenue of $5.76 billion, beating the estimated $5.7 billion.

Citi analyst Keith Horowitz, who has a buy rating on Truist, noted that the bank surpassed the consensus estimate for preprovision net revenue by 8 cents per share. Additionally, Truist Financial achieved stronger-than-expected net interest income, which contributed to its positive performance.

The net interest margin also experienced growth, increasing by 0.03% to 2.98%, surpassing expense estimates by 4 cents per share. Horowitz predicts that Truist’s projected 2024 preprovision net revenue performance will further enhance the bank’s position by reducing expenses.

Preprovision net revenue is a crucial measure for banks as it encompasses both net interest income and non-interest income while accounting for operational risk losses and expenses from other real estate owned.

Despite a 23.5% decline in Truist Financial’s stock in 2023, the S&P 500 index presented a gain of 22% during that same period.

Truist Financial was established in 2020 through the merger of SunTrust Robinson Humphrey and BB&T Capital Markets.

Also read: Truist raising $1.75 billion in bond offering, making it the latest bank to raise capital

The Numbers

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