Modest loan growth to help Truist Financial (TFC) third quarter results – October 14, 2021


Truist Financial (TFC Free Report) is expected to announce third quarter 2021 results on October 15, before the market opens. According to the latest from the Fed The data, commercial and industrial loan balances (accounting for nearly 50% of the Company’s total investment loans and leases) continued to decline while overall lending activity improved slightly.

Zacks’ consensus estimate for average productive assets for the reportable quarter is set at $ 458.3 billion, indicating a marginal increase from the previous quarter’s reported figure.

While the persistently low interest rate environment remained a headwind, the steepening of the yield curve during the quarter and subdued loan demand should have provided some support to the net interest margin (NIM ) and net interest income (NII) of Truist Financial. Management expects the reported NIM to decrease due to the decrease in the accounting build-up of purchases, while the base NIM is expected to be relatively stable.

By direction, the NII is expected to be relatively stable due to balance sheet growth. NII’s consensus estimate for the reportable quarter is $ 3.24 billion. This implies relatively stable performance on a sequential basis.

Other major factors at play

Non-interest income: As in previous quarters, the deposit balance continued to improve in the third quarter. This has likely resulted in increased revenue from service charges on deposits. Zacks’ consensus estimate of $ 260 million for the same suggests a 2.8% increase from the previous quarter.

Improving consumer confidence during the quarter and a strong economic outlook likely helped Truist Financial’s card business. Zacks’ consensus estimate for card and payment related fees of $ 234 million implies a 4% increase.

The consensus mark for bank-owned life insurance revenue is $ 47 million, which suggests a 2.2% increase from the figure released in the previous quarter. In addition, a modest increase in loan demand should have supported the company’s loan costs. Zacks Consensus Estimate for Same $ 95 Million Shows 1.1% Increase

However, the consensus estimate for investment banking and brokerage fees and commissions of $ 307 million indicates a decrease of 3.2% from the previous quarter.

Mortgage production is likely to have remained relatively strong, but not as strong as last year. In addition, the moderation in refinancing activity should have offset the support from mortgage income. Thus, the consensus estimate of mortgage banking income of $ 113 million suggests a drop of 3.4% sequentially.

The consensus estimate for the insurance commission is set at $ 647 million, indicating a decline of 6.2% sequentially.

The consensus estimate of total non-interest income of $ 2.3 billion implies a 5% decline on a sequential basis.

Expenses: Although the company has seen a continuous increase in overall spending in recent quarters due to investments in technology upgrades and merger integration, management expects base non-interest expenses (excluding merger costs and amortization) for the quarter will be relatively stable on a sequential basis.

Asset quality: Continuing the trend of the last quarters, and driven by an improvement in the macroeconomic context and stable credit market conditions, Truist Financial is likely to have released the reserves it had taken to cover losses due to the effects of the pandemic of coronavirus that she had received. the first half of last year to cover losses due to the effects of the coronavirus pandemic.

Zacks’ consensus estimate for non-performing assets is set at $ 1.11 billion, which indicates a decrease of 7.2% from last quarter. The consensus estimate of total unrecorded loans and leases of $ 1.05 billion suggests a decline of 7.5%.

Management expects net charges in the range of 25 to 35 basis points.

Whispers of gains

According to our quantitative model, the chances of Truist Financial beating Zacks’ consensus estimate this time are low. That’s because he doesn’t have the right combination of the two key ingredients – a positive Income ESP and a Zacks (Hold) Rank 3 or higher.

You can discover the best stocks to buy or sell before they are flagged with our ESP Earnings Filter.

ESP on income: The PSE of earnings for Truist Financial is -0.95%.

Zack Rank: The company currently holds a Zacks Rank # 3.

Zacks’ consensus estimate of $ 1.20 a share has risen nearly 1% in the past seven days. The figure indicates an increase of 23.7% from the number reported a year ago.

The consensus sales estimate is set at $ 5.52 billion, indicating a decline of nearly 1%.

Banks to consider

Here are a few bank stocks you might want to consider, as our model shows they have the right mix of elements to show a beaten profit this time around:

ESP gains for PNC Financial (PNC Free Report) is + 2.17% and it currently carries a Zacks rank of 3. The company is expected to release quarterly numbers on October 15.

Zions Bancorporation (IF WE Free Report) is expected to release its quarterly results on October 18. The company has an ESP on earnings of + 2.49% and currently has a Zacks rank of 3. You can see The full list of Zacks # 1 Rank (Strong Buy) stocks today here.

Fifth Third Bancorp (FITB Free Report) is expected to release its quarterly results on October 19. The company, which currently has a Zacks ranking of 2 (Buy), has an ESP of + 0.46%.


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