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TFC Q3 Earnings Beat as Fee Income Rises, Provisions Fall, Stock Gains
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Key Takeaways
Truist Financial's Q3 EPS of $1.04 beat estimates and rose from 97 cents a year earlier.
Revenues grew 2% to $5.19B on stronger fee income, though non-interest expenses climbed 3%.
Credit provisions fell 2.7%, with net charge-offs and loan loss allowances also declining.
Truist Financial’s (TFC - Free Report) third-quarter 2025 earnings of $1.04 per share beat the Zacks Consensus Estimate of 99 cents. The bottom line grew from adjusted earnings of 97 cents in the prior-year quarter. Results in the reported quarter included a pre-tax restructuring charge of $27 million.
Shares of Truist gained almost 3% in pre-market trading as investors cheered better-than-expected results.
Results benefited from a slight rise in net interest income (NII) and a solid fee income performance. Further, a higher average loan balance and a fall in provisions offered support. However, lower average deposit balance and an increase in non-interest expenses were the major headwinds.
Net income available to common shareholders was $1.35 billion, up almost 1% from the prior-year quarter. Our estimate for net income was $1.24 billion.
TFC’s Revenues Improve, Expenses Rise
Total revenues in the quarter were $5.19 billion, up 2% year over year. The top line marginally beat the Zacks Consensus Estimate of $5.15 billion.
Tax-equivalent NII increased nominally year over year to $3.68 billion. Our estimate for NII (FTE) was $3.72 billion.
Net interest margin (NIM) declined 11 basis points (bps) to 3.01%.
Non-interest income was $1.56 billion, up 5.1%. The rise was mainly driven by higher mortgage banking income, wealth management income, service charges on deposits and lending-related fees. Our estimate for non-interest income was $1.47 billion.
Non-interest expenses were $3.01 billion, up 3%. The increase was mainly due to higher personnel expenses, equipment expenses and restructuring costs. Our estimate for non-interest expenses was $2.99 billion.
The adjusted efficiency ratio was 55.7%, up from 55.2% in the prior-year quarter. A rise in the efficiency ratio indicates a decline in profitability.
As of Sept. 30, 2025, total average deposits were $396.6 billion, down 1% on a sequential basis. Average loans and leases held for investment of $320.5 billion rose 2.5%.
TFC’s Credit Quality: A Mixed Bag
Provision for credit losses was $436 million, down 2.7% from the prior-year quarter. Our estimate for provisions was $516.9 million.
Also, net charge-offs were 0.48% of average loans and leases, down 7 bps from the prior-year quarter. The allowance for loan and lease losses was 1.54% of total loans and leases held for investment, which declined 6 bps.
As of Sept. 30, 2025, total non-performing assets (NPAs) were $1.63 billion, up 6.6% from a year ago. We had expected NPAs to be $1.43 billion.
TFC’s Profitability & Capital Ratios Solid
At the end of the reported quarter, the return on average common equity was 9% compared with 9.1% in the third quarter of 2024.
As of Sept. 30, 2025, the Tier 1 risk-based capital ratio was 12.3% compared with 13.2% in the prior-year quarter. The common equity Tier 1 ratio was 11% as of Sept. 30, 2025, down from 11.6% as of Sept. 30, 2024.
TFC’s Share Repurchases
In the reported quarter, Truist Financial repurchased shares worth $500 million.
Our Take on Truist Financial
A decent loan demand and TFC’s business restructuring/expansion initiatives are expected to continue supporting its top line. Also, a solid balance sheet position is a positive. However, elevated expenses, given a tough operating environment, are a major headwind.
Truist Financial Corporation Price, Consensus and EPS Surprise
U.S. Bancorp’s (USB - Free Report) third-quarter 2025 earnings per share of $1.22 beat the Zacks Consensus Estimate of $1.11. The bottom line increased 18.4% from the prior-year quarter.
Results benefited from lower expenses and higher non-interest income. Also, a rise in NII and improvement in loan and deposit balances were tailwinds for USB. However, a rise in provision was concerning.
The PNC Financial Services Group, Inc.’s (PNC - Free Report) third-quarter 2025 earnings per share of $4.35 surpassed the Zacks Consensus Estimate of $4.05. In the prior-year quarter, the company reported earnings of $3.49.
Results were aided by a rise in NII and fee income. Rising loan and deposit balances, along with a decline in provisions for credit losses, were other positives. However, an increase in expenses acted as a spoilsport for PNC.
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TFC Q3 Earnings Beat as Fee Income Rises, Provisions Fall, Stock Gains
Key Takeaways
Truist Financial’s (TFC - Free Report) third-quarter 2025 earnings of $1.04 per share beat the Zacks Consensus Estimate of 99 cents. The bottom line grew from adjusted earnings of 97 cents in the prior-year quarter. Results in the reported quarter included a pre-tax restructuring charge of $27 million.
Shares of Truist gained almost 3% in pre-market trading as investors cheered better-than-expected results.
Results benefited from a slight rise in net interest income (NII) and a solid fee income performance. Further, a higher average loan balance and a fall in provisions offered support. However, lower average deposit balance and an increase in non-interest expenses were the major headwinds.
Net income available to common shareholders was $1.35 billion, up almost 1% from the prior-year quarter. Our estimate for net income was $1.24 billion.
TFC’s Revenues Improve, Expenses Rise
Total revenues in the quarter were $5.19 billion, up 2% year over year. The top line marginally beat the Zacks Consensus Estimate of $5.15 billion.
Tax-equivalent NII increased nominally year over year to $3.68 billion. Our estimate for NII (FTE) was $3.72 billion.
Net interest margin (NIM) declined 11 basis points (bps) to 3.01%.
Non-interest income was $1.56 billion, up 5.1%. The rise was mainly driven by higher mortgage banking income, wealth management income, service charges on deposits and lending-related fees. Our estimate for non-interest income was $1.47 billion.
Non-interest expenses were $3.01 billion, up 3%. The increase was mainly due to higher personnel expenses, equipment expenses and restructuring costs. Our estimate for non-interest expenses was $2.99 billion.
The adjusted efficiency ratio was 55.7%, up from 55.2% in the prior-year quarter. A rise in the efficiency ratio indicates a decline in profitability.
As of Sept. 30, 2025, total average deposits were $396.6 billion, down 1% on a sequential basis. Average loans and leases held for investment of $320.5 billion rose 2.5%.
TFC’s Credit Quality: A Mixed Bag
Provision for credit losses was $436 million, down 2.7% from the prior-year quarter. Our estimate for provisions was $516.9 million.
Also, net charge-offs were 0.48% of average loans and leases, down 7 bps from the prior-year quarter. The allowance for loan and lease losses was 1.54% of total loans and leases held for investment, which declined 6 bps.
As of Sept. 30, 2025, total non-performing assets (NPAs) were $1.63 billion, up 6.6% from a year ago. We had expected NPAs to be $1.43 billion.
TFC’s Profitability & Capital Ratios Solid
At the end of the reported quarter, the return on average common equity was 9% compared with 9.1% in the third quarter of 2024.
As of Sept. 30, 2025, the Tier 1 risk-based capital ratio was 12.3% compared with 13.2% in the prior-year quarter. The common equity Tier 1 ratio was 11% as of Sept. 30, 2025, down from 11.6% as of Sept. 30, 2024.
TFC’s Share Repurchases
In the reported quarter, Truist Financial repurchased shares worth $500 million.
Our Take on Truist Financial
A decent loan demand and TFC’s business restructuring/expansion initiatives are expected to continue supporting its top line. Also, a solid balance sheet position is a positive. However, elevated expenses, given a tough operating environment, are a major headwind.
Truist Financial Corporation Price, Consensus and EPS Surprise
Truist Financial Corporation price-consensus-eps-surprise-chart | Truist Financial Corporation Quote
Truist Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of TFC’s Peers
U.S. Bancorp’s (USB - Free Report) third-quarter 2025 earnings per share of $1.22 beat the Zacks Consensus Estimate of $1.11. The bottom line increased 18.4% from the prior-year quarter.
Results benefited from lower expenses and higher non-interest income. Also, a rise in NII and improvement in loan and deposit balances were tailwinds for USB. However, a rise in provision was concerning.
The PNC Financial Services Group, Inc.’s (PNC - Free Report) third-quarter 2025 earnings per share of $4.35 surpassed the Zacks Consensus Estimate of $4.05. In the prior-year quarter, the company reported earnings of $3.49.
Results were aided by a rise in NII and fee income. Rising loan and deposit balances, along with a decline in provisions for credit losses, were other positives. However, an increase in expenses acted as a spoilsport for PNC.