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Mortgage banking income is projected to have jumped more than 34% y/y.
Costs are expected to rise above 5% on tech investments and inflation, partly offset by a rally in fee income.
Truist Financial (TFC - Free Report) is scheduled to announce second-quarter 2025 results on July 18 before the opening bell. Despite an uncertain macroeconomic backdrop, the overall lending scenario was good in the quarter.
Per the Federal Reserve’s latest data, growth in commercial and industrial (C&I) loans (accounting for almost 50% of TFC’s total loans and leases held for investment) was strong. Moreover, the demand for consumer loans (almost 40% of total loans and leases held for investment) was decent.
The Zacks Consensus Estimate for TFC’s average earning assets for the second quarter is pegged at $478.4 billion, which indicates a marginal rise from the prior-year quarter’s actual. We project the metric to be $478.6 billion.
Moreover, the Federal Reserve kept interest rates unchanged at 4.25-4.5% in the to-be-reported quarter. Thus, amid gradually stabilizing funding/deposit costs, TFC’s net interest income (NII) and net interest margin are expected to have improved, supported by higher rates and loan growth.
The consensus estimate for second-quarter NII is pegged at $3.58 billion, which implies a 1.4% year-over-year rise. Our estimate for the metric is pegged at $3.56 billion.
Management anticipates NII to be up 1.5% sequentially, primarily driven by an additional day relative to the prior quarter, some loan growth and the benefits of fixed asset repricing.
TFC’s Other Key Factors & Estimates for Q2
Non-Interest Income: The Zacks Consensus Estimate for service charges on deposits of $234 million suggests a marginal rise from the prior-year quarter’s reported figure. Our estimate for the metric is pegged at $228 million.
The Zacks Consensus Estimate for card and payment-related fees of $225 million suggests a year-over-year decline of 2.2%. Our estimate for the metric is $228.7 million.
In the second quarter, mortgage rates did not decline significantly. The quarter saw rates fluctuate, but they remained in the mid-to-upper 6% range. Hence, refinancing activities and origination volumes were decent. Truist’s residential mortgage income is expected to have risen to some extent. The consensus estimate for the metric of $113 million indicates a 34.5% jump from the prior-year quarter. Our estimate for mortgage banking income is $114.8 million.
Higher client activity and volatility in the capital markets in the to-be-reported quarter are expected to have supported TFC’s corresponding fee income, while headwinds related to tariffs are likely to have weighed on it. The consensus estimate for the company’s investment banking and trading income of $266 million indicates a year-over-year fall of 7%.
The decent lending scenario is likely to have supported TFC’s lending-related fees. The Zacks Consensus Estimate for the same of $93 million indicates a rise of 4.5%. We anticipate the metric to be $90.5 million.
The Zacks Consensus Estimate for second-quarter wealth management income of $342 million suggests a decline of 5.3% from the prior-year quarter’s actual. Our estimate for the metric is $351.9 million.
Overall, the Zacks Consensus Estimate for total non-interest income is pegged at $1.41 billion, which indicates growth from the prior-year quarter’s reported figure. In the prior-year quarter, the company reported negative fee income. We project non-interest income of $1.40 billion for the to-be-reported quarter.
Management expects non-interest income to be up 1-3% sequentially, primarily driven by higher other income.
Expenses: Truist has been witnessing a continued rise in overall non-interest expenses over the past several quarters because of investments in technology, inflationary pressure and strategic expansion efforts. A similar trend is expected to have continued in the second quarter.
Our estimate for total adjusted non-interest expenses is pegged at $2.96 billion, implying an increase of 5.5% from the prior-year quarter’s actual.
Management expects adjusted expenses, including core deposit intangible (CDI) and amortization expenses, to rise 2-3% sequentially due to higher personnel costs.
Asset Quality: Truist is likely to have set aside a substantial amount of money for potential delinquent loans (mainly commercial loan defaults), given the expectations of higher for longer interest rates and the impacts of Trump’s tariffs on inflation.
Our estimate for provision for credit losses is pegged at $407.9 million, reflecting a 9.6% year-over-year decline.
The Zacks Consensus Estimate for total non-accrual loans and leases of $1.56 billion suggests a 9.6% year-over-year increase. We project total non-accrual loans and leases to be $1.41 billion.
What the Zacks Model Unveils for TFC
According to our quantitative model, the chances of Truist beating the Zacks Consensus Estimate for earnings this time are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Truist is +0.97%.
Zacks Rank: The company currently carries a Zacks Rank #3.
Truist’s Q2 Earnings & Sales Expectations
The Zacks Consensus Estimate for TFC’s earnings of 92 cents per share has been revised 1.1% lower over the past seven days. The estimate indicates a rise of 1.1% from the year-ago reported number.
Truist Financial Corporation Price and EPS Surprise
The consensus estimate for sales is pegged at $4.98 billion, which implies a marginal year-over-year rise.
Management expects second-quarter 2025 adjusted revenues to rise 1.5% sequentially.
TFC’s Peers Worth Considering
Here are a couple of other bank stocks that you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat this time:
Over the past seven days, the Zacks Consensus Estimate for Northern Trust’s quarterly earnings has been revised upward to $2.07.
Prosperity Bancshares, Inc. (PB - Free Report) is also scheduled to announce second-quarter 2025 results on July 23. The company has a Zacks Rank #3 and an Earnings ESP of +1.33% at present. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Quarterly earnings estimates for Prosperity Bancshares have been unchanged at $1.40 over the past week.
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Loan Growth, Higher Rates to Support Truist's Q2 Earnings
Key Takeaways
Truist Financial (TFC - Free Report) is scheduled to announce second-quarter 2025 results on July 18 before the opening bell. Despite an uncertain macroeconomic backdrop, the overall lending scenario was good in the quarter.
Per the Federal Reserve’s latest data, growth in commercial and industrial (C&I) loans (accounting for almost 50% of TFC’s total loans and leases held for investment) was strong. Moreover, the demand for consumer loans (almost 40% of total loans and leases held for investment) was decent.
The Zacks Consensus Estimate for TFC’s average earning assets for the second quarter is pegged at $478.4 billion, which indicates a marginal rise from the prior-year quarter’s actual. We project the metric to be $478.6 billion.
Moreover, the Federal Reserve kept interest rates unchanged at 4.25-4.5% in the to-be-reported quarter. Thus, amid gradually stabilizing funding/deposit costs, TFC’s net interest income (NII) and net interest margin are expected to have improved, supported by higher rates and loan growth.
The consensus estimate for second-quarter NII is pegged at $3.58 billion, which implies a 1.4% year-over-year rise. Our estimate for the metric is pegged at $3.56 billion.
Management anticipates NII to be up 1.5% sequentially, primarily driven by an additional day relative to the prior quarter, some loan growth and the benefits of fixed asset repricing.
TFC’s Other Key Factors & Estimates for Q2
Non-Interest Income: The Zacks Consensus Estimate for service charges on deposits of $234 million suggests a marginal rise from the prior-year quarter’s reported figure. Our estimate for the metric is pegged at $228 million.
The Zacks Consensus Estimate for card and payment-related fees of $225 million suggests a year-over-year decline of 2.2%. Our estimate for the metric is $228.7 million.
In the second quarter, mortgage rates did not decline significantly. The quarter saw rates fluctuate, but they remained in the mid-to-upper 6% range. Hence, refinancing activities and origination volumes were decent. Truist’s residential mortgage income is expected to have risen to some extent. The consensus estimate for the metric of $113 million indicates a 34.5% jump from the prior-year quarter. Our estimate for mortgage banking income is $114.8 million.
Higher client activity and volatility in the capital markets in the to-be-reported quarter are expected to have supported TFC’s corresponding fee income, while headwinds related to tariffs are likely to have weighed on it. The consensus estimate for the company’s investment banking and trading income of $266 million indicates a year-over-year fall of 7%.
The decent lending scenario is likely to have supported TFC’s lending-related fees. The Zacks Consensus Estimate for the same of $93 million indicates a rise of 4.5%. We anticipate the metric to be $90.5 million.
The Zacks Consensus Estimate for second-quarter wealth management income of $342 million suggests a decline of 5.3% from the prior-year quarter’s actual. Our estimate for the metric is $351.9 million.
Overall, the Zacks Consensus Estimate for total non-interest income is pegged at $1.41 billion, which indicates growth from the prior-year quarter’s reported figure. In the prior-year quarter, the company reported negative fee income. We project non-interest income of $1.40 billion for the to-be-reported quarter.
Management expects non-interest income to be up 1-3% sequentially, primarily driven by higher other income.
Expenses: Truist has been witnessing a continued rise in overall non-interest expenses over the past several quarters because of investments in technology, inflationary pressure and strategic expansion efforts. A similar trend is expected to have continued in the second quarter.
Our estimate for total adjusted non-interest expenses is pegged at $2.96 billion, implying an increase of 5.5% from the prior-year quarter’s actual.
Management expects adjusted expenses, including core deposit intangible (CDI) and amortization expenses, to rise 2-3% sequentially due to higher personnel costs.
Asset Quality: Truist is likely to have set aside a substantial amount of money for potential delinquent loans (mainly commercial loan defaults), given the expectations of higher for longer interest rates and the impacts of Trump’s tariffs on inflation.
Our estimate for provision for credit losses is pegged at $407.9 million, reflecting a 9.6% year-over-year decline.
The Zacks Consensus Estimate for total non-accrual loans and leases of $1.56 billion suggests a 9.6% year-over-year increase. We project total non-accrual loans and leases to be $1.41 billion.
What the Zacks Model Unveils for TFC
According to our quantitative model, the chances of Truist beating the Zacks Consensus Estimate for earnings this time are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Truist is +0.97%.
Zacks Rank: The company currently carries a Zacks Rank #3.
Truist’s Q2 Earnings & Sales Expectations
The Zacks Consensus Estimate for TFC’s earnings of 92 cents per share has been revised 1.1% lower over the past seven days. The estimate indicates a rise of 1.1% from the year-ago reported number.
Truist Financial Corporation Price and EPS Surprise
Truist Financial Corporation price-eps-surprise | Truist Financial Corporation Quote
The consensus estimate for sales is pegged at $4.98 billion, which implies a marginal year-over-year rise.
Management expects second-quarter 2025 adjusted revenues to rise 1.5% sequentially.
TFC’s Peers Worth Considering
Here are a couple of other bank stocks that you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat this time:
The Earnings ESP for Northern Trust Corporation (NTRS - Free Report) is +0.58% and it sports a Zacks Rank #1 (Strong Buy) at present. The company is slated to report second-quarter 2025 results on July 23. You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past seven days, the Zacks Consensus Estimate for Northern Trust’s quarterly earnings has been revised upward to $2.07.
Prosperity Bancshares, Inc. (PB - Free Report) is also scheduled to announce second-quarter 2025 results on July 23. The company has a Zacks Rank #3 and an Earnings ESP of +1.33% at present. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Quarterly earnings estimates for Prosperity Bancshares have been unchanged at $1.40 over the past week.