Truist Financial's (TFC) financial performance for the second quarter displayed a decline year-over-year, primarily driven by significant securities losses that offset an accounting gain realized from the divestiture of a business unit. Adjusted earnings per share decreased slightly to $0.91 from $0.92 during the same period last year, but it outperformed the consensus estimate reported by Capital IQ, which stood at $0.83. On a Generally Accepted Accounting Principles (GAAP) basis, the net income saw a more substantial drop, declining to $0.62 per share compared to $0.92 recorded in the previous year.
This figure incorporated a substantial $6.9 billion profit attributed to the sale of Truist’s remaining interest in Truist Insurance Brokerage, juxtaposed against $6.7 billion in losses on securities. Bill Rogers, the Chief Executive Officer, remarked on the company's strategy, stating, "We utilized a portion of the capital created from the sale of Truist Insurance Holdings to reposition our balance sheet, which is expected to replace TIH's earnings contribution, creates additional liquidity and improves our interest rate risk profile." Assessing the overall revenue picture, Truist reported a $6.5 billion decline, primarily attributed to these securities losses.
Adjusted revenues reached $5.02 billion, indicating a sequential growth of 3%, though it reflected a slight decrease of 0.4% year-over-year. With regards to net interest income, the figure fell by 2.1%, landing at $3.58 billion, largely due to heightened funding costs and a decrease in earning assets.
In a striking contrast, noninterest income plummeted to a negative $5.21 billion, reversing from a positive $1.38 billion recorded last year, primarily due to securities sold at a loss. The company's balance sheet reflected a downturn as average loans and leases held for investment decreased to approximately $306 billion from $326 billion year-over-year.
Similarly, average deposits dropped to $388 billion, down from $400 billion during the prior year's timeframe. Looking ahead, Truist has forecasted that adjusted revenues for 2024, on a taxable equivalent basis, will slip by about 0.5% to 1%, a slight improvement from the 0.5% to 1.5% decrease projected in their May outlook. For the ongoing quarter, the financial institution anticipates a sequential increase in adjusted revenues in the range of 1% to 2%.
However, it is also expecting adjusted expenses to see a rise of 3%. Further highlighting the company's commitment to returning value to its shareholders, Rogers announced, "In addition, our board authorized the repurchase of up to $5 billion of shares of our common stock through the end of 2026 with repurchases expected to begin during the third quarter." As of the latest market data, Truist's stock price stands at $43.21, with a change of +0.80, equivalent to a percent change of +1.89..