Truist Financial Corp. (TFC.N): 3Q Revs Slightly Worse; ROTCE Targets Reiterated; More Loan Exits

EPS of $1.16 vs consensus of $1.12. Results included the impact of the previously announced sale of TFC's non prime auto lending business (RAC) and subsequent securities restructuring. Ex this, EPS was $1.16. Net II and fees were both lower than expected, offset by lower cost of credit and expenses. Net II rose 1.1% vs. guidance to be up 1.5%; fees declined 2.9% vs. guidance to be relatively stable. Share buybacks were $1.2b, in line with expectations and mgmt. expects $1b of buybacks in 4Q. TCE/RWAs was 8.9% at 9/30 vs. 9.4% at 6/30 mostly on rate drag (reported CET1 declined just 20bps to 10.7%). The sale of LightStream will boost capital by 20bps. 4Q guidance implies total revenue of $5.35b, with net II of $3.65-3.7b, costs (ex items) to rise 2.5%, 45bps of NCOs vs. DBe of 60bps prior to exits, $1b buybacks and a 13.5% tax rate. Mgmt reiterated that TFC is on track to achieve its near and longer term ROTCE targets. Post the quarter, TFC entered a deal to sell another $8b of loans re