Truist Financial Corporation, a purpose-driven financial services company, has reported net income of $1.3 billion and adjusted net income of $1.6 billion for the first-quarter of 2021, driven in part by the record performance of its insurance operation in the period.
Year-on-year, net income and adjusted net income increased by 35.3% and 42%, respectively, in Q1 2021.
“This growth resulted from a record performance in our insurance business, record results from investment banking and a significantly lower provision for credit losses.
“We also demonstrated strong expense discipline by reducing expense,” said the firm’s Chairman and Chief Executive Officer (CEO), Kelly S. King.
When compared with the prior year first quarter, Truist’s insurance income increased by $77 million in 2021, driven by new business and higher retention, alongside acquisitions.
Truist’s Insurance Holdings segment, which is one of the largest insurance brokers in the world, saw its net income increase by $26 million in Q1 2021 to $131 million, against $105 million in the prior year quarter.
Within this segment, Truist has reported that non-interest income increased by $76 million primarily as a result of higher property and casualty insurance production as well as acquisitions.
Additionally, non-interest expense increased $39 million primarily due to higher performance-based incentives and amortization of intangibles related to the acquisitions.
“Truist and our teammates have a lot to be proud of in the first quarter, including a strong financial performance and several significant milestones reflective of our purpose in action.
“We advanced our ESG strategy with the issuance of our first social bond—becoming the first U.S. regional bank to do so—and became the lead investor for Greenwood, an innovative digital banking platform designed for Black and Latinx consumers and business owners. In addition, we received an ‘Outstanding’ CRA rating for our community development efforts, and continued to make great progress towards our Community Benefits Plan, after ending 2020 at 114 percent of our annual target. These achievements reflect our continued commitment to support and invest in the diverse communities we’re proud to serve,” said King.
Adding: “We continue to make important progress on our integration efforts, including completing the wealth brokerage transition earlier this quarter. Through our unique Integrated Relationship Management approach, we continued to deepen client relationships across our investment banking and insurance businesses, significantly increasing referral volumes.
“We were also honored to be recognized for our commitment to stand for better by the Human Rights Campaign’s Corporate Equality Index with a perfect 100 score, by ‘FORTUNE’ as one of the world’s most admired companies and as a top 50 employer by both ‘Equal Opportunity’ and ‘CAREERS & the disABLED’ magazines.”
As noted by King, the firm’s strong Q1 2021 net income was also supported by record results from investment banking and lower provision for credit losses.
In Q1 2021, investment banking and trading income jumped by $222 million as a result of the impact from CVA recoveries in the current period compared to losses in the earlier quarter.
The provision for credit losses came in significantly lower in Q1 2021 when compared with the prior year quarter, at $48 million versus $893 million. Truist explains that Q1 2020 included substantial uncertainty related to the pandemic.