Truist Financial's Q1 Earnings Beat Estimates on Higher NII, Stock Up

Core Viewpoint - Truist Financial reported better-than-expected earnings for the first quarter of 2025, with adjusted earnings of 87 cents per share, beating estimates by a penny, although this represents a 3.3% decline year over year [1] Financial Performance - The company's total quarterly revenues reached $4.90 billion, a 1.7% increase year over year, but fell short of the Zacks Consensus Estimate of $4.92 billion [4] - Net interest income (NII) rose 3.8% to $3.56 billion, driven by balance sheet repositioning, although it slightly missed the estimate of $3.57 billion [4] - Non-interest income decreased by 3.7% to $1.40 billion, primarily due to declines in most components except for service charges on deposits and mortgage banking income [5] - Non-interest expenses were $2.91 billion, down 1.6%, attributed to lower personnel and regulatory costs, while adjusted non-interest expenses rose 1.5% to $2.87 billion [6] Credit Quality - Net charge-offs were 0.60% of average loans and leases, a decrease of 4 basis points, while provisions for credit losses were $458 million, down 8.4% from the previous year [8] - Total non-performing assets (NPAs) increased by 9.6% to $1.62 billion, exceeding expectations [9] Profitability and Capital Ratios - The return on average common equity was 8.1%, down from 8.4% in the prior year [10] - The Tier 1 risk-based capital ratio improved to 12.7% from 11.7% year over year, and the common equity Tier 1 ratio rose to 11.3% from 10.1% [10] Share Repurchase Activity - During the reported quarter, Truist Financial repurchased shares worth $500 million [11] Outlook - The company anticipates that decent loan demand, business restructuring initiatives, and efforts to bolster fee income will support its top line, despite challenges from elevated expenses and weak asset quality [12]