
The bank is looking for stronger commercial-and-industrial loan demand in 2025, citing improved business owner confidence and expectations for lower taxes and lighter regulation.
President-elect Donald Trump, who retakes the White House helm on Monday, campaigned on a pro-business platform.
But overall growth for the year could continue to prove challenging, given modest demand across several consumer segments amid lingering high interest rates and the bank's conservative posture on commercial real estate. CRE loans were a source of rising charge-offs for the bank in the fourth quarter. Additionally, some business clients remain flush with cash and, as such, are not drawing on credit lines,
In total,
"We have some headwinds that are generated by the fact that the real estate business is not growing today…due to cost of insurance, cost of borrowing money, cost of supplies and construction. All those things have been a headwind to new originations within real estate,"
"Consumers are still spending money, but probably a little more cautiously than they were," he added. "And so while we're seeing some growth in our card portfolio, other consumer businesses are fairly stable. I think we have to see some other things besides C&I…to experience real overall growth in the portfolio."
The
As such, Turner said,
"We're committed to generating positive operating leverage," the chief executive said. Investments, however, come "with the assumption that we're going to reduce expenses somewhere else."
"On the good side, they're keeping expenses pretty tight," said Truist Securities analyst Brian Foran.
Net loan charge-offs rose to $119 million, or 49 basis points of average loans for the fourth quarter. That was up 1 basis point from the previous quarter and up 5 basis points from a year earlier. The company cited lingering challenges in office and senior housing loans – sore spots across the industry.
"The charge-off ratio could drift a little higher than the 40 to 50 basis point range in a given quarter, given that we have handful of large credits primarily in office and senior housing and in transportation, which we've signaled," Turner said. "In fact, roughly half of our nonaccruals are in those three portfolios. And so as you think about resolutions, they might be somewhat episodic. We could experience a quarter when charge-offs were a little higher."
But
The company reported $1.8 billion in total revenue for the quarter, in line with the final quarter of 2023. Its top line included $1.2 billion in net interest income, down slightly from a year earlier. But its non-interest income of $585 million was up from $580 million in the year-ago quarter, bolstered by increased capital markets activity and deal advisory fees.
Its net interest margin of 3.55% increased by 1 basis point from the prior quarter but contracted 5 basis points from a year earlier.