01/18/2022 | Press release | Distributed by Public on 01/18/2022 04:48
CHARLOTTE, N.C., Jan. 18, 2022/PRNewswire/ -- Truist Financial Corporation (NYSE: TFC) today reported earnings for the fourth quarter and full year of 2021.
Net income available to common shareholders was $1.5 billion, up 24%, compared to the fourth quarter last year. Earnings per diluted common share were $1.13, an increase of 26% compared with the same period last year. Results for the fourth quarter produced an annualized return on average assets (ROA) of 1.19%, an annualized return on average common shareholders' equity (ROCE) of 9.8%, and an annualized return on tangible common shareholders' equity (ROTCE) of 18.9%.
Adjusted net income available to common shareholders was $1.9 billion, or $1.38per diluted share, excluding merger-related and restructuring charges of $212 million($163 millionafter-tax) and incremental operating expenses related to the merger of $215 million($165 millionafter-tax). Adjusted results produced an annualized ROA of 1.43%, an annualized ROCE of 11.9%, and an annualized ROTCE of 22.6%. Adjusted earnings per diluted share were up 17% compared to the prior year.
For the full year 2021, net income available to common shareholders was $6.0 billioncompared to $4.2 billionfor 2020. Earnings per diluted share were $4.47for 2021, up 45%, compared to $3.08for 2020. Results for 2021 produced an ROA of 1.23%, an ROCE of 9.7%, and an ROTCE of 18.4%.
Adjusted net income available to common shareholders for the full year 2021, which excludes merger-related charges, incremental operating expenses related to the merger and certain other items as detailed in our non-GAAP reconciliations was $7.5 billioncompared to $5.2 billionfor 2020. Adjusted diluted earnings per share was a record $5.53, up 46%, compared to $3.80for 2020. Adjusted results for 2021 produced an ROA of 1.50%, an ROCE of 11.9%, and an ROTCE of 22.0%.
"Our fourth quarter results reflect a strong finish to an impactful year for Truist," said Chief Executive Officer Bill Rogers. "The quarter reflects improved revenue momentum and excellent credit quality, as well as significant capital deployment, and the achievement of our cost savings targets. Our diverse business model and progress on the merger, combined with a better economic environment drove stronger 2021 performance compared with 2020. In addition to our financial performance, we also made critical progress integrating our systems, activating our purpose, and expanding ESG and diversity initiatives.
"During the year, we lived our purpose to inspire and build better lives and communities in countless ways. We invested in key businesses and digital products to help drive greater financial success for our clients. Our Paycheck Protection Program lending helped small businesses, non-profits, and commercial clients receive critical funding and we ranked as the 4th largest PPP lender. We increased access to financial education for our clients through our partnership with Operation HOPE, issued our first social bond, and were recognized in JUST Capital's 'JUST 100' list for our ongoing efforts around good corporate citizenship.
"Truist has much to look forward to in 2022. In February, we will complete our largest client conversion and will eliminate merger costs by year end. We have strong momentum heading into the year with an improving loan growth trajectory and growing fee income businesses. We will shift from an integration mindset to an operating mindset focused on executional excellence and growth, accelerate investments in our businesses, all underpinned by our unwavering purpose. Our successes in 2021 reflect the efforts of tens of thousands of hardworking, purposeful teammates and I applaud them for their accomplishments as we continue building Truist."
Fourth Quarter and Full year 2021 Performance Highlights
EARNINGS HIGHLIGHTS |
|
|
|
Change 4Q21 vs. |
|
(dollars in millions, except per share data) |
4Q21 |
3Q21 |
4Q20 |
3Q21 |
4Q20 |
Net income available to common shareholders |
$ 1,524 |
$ 1,616 |
$ 1,228 |
$ (92) |
$ 296 |
Diluted earnings per common share |
1.13 |
1.20 |
0.90 |
(0.07) |
0.23 |
|
|
|
|
|
|
Net interest income - taxable equivalent |
$ 3,267 |
$ 3,261 |
$ 3,394 |
$ 6 |
$ (127) |
Noninterest income |
2,323 |
2,365 |
2,285 |
(42) |
38 |
Total taxable-equivalent revenue |
$ 5,590 |
$ 5,626 |
$ 5,679 |
$ (36) |
$ (89) |
Less taxable-equivalent adjustment |
24 |
28 |
28 |
|
|
Total revenue |
$ 5,566 |
$ 5,598 |
$ 5,651 |
|
|
|
|
|
|
|
|
Return on average assets |
1.19% |
1.28% |
1.05% |
(0.09)% |
0.14% |
Return on average risk-weighted assets (current quarter is preliminary) |
1.64 |
1.77 |
1.40 |
(0.13) |
0.24 |
Return on average common shareholders' equity |
9.8 |
10.2 |
7.9 |
(0.4) |
1.9 |
Return on average tangible common shareholders' equity (1) |
18.9 |
19.3 |
15.0 |
(0.4) |
3.9 |
Net interest margin - taxable equivalent |
2.76 |
2.81 |
3.08 |
(0.05) |
(0.32) |
(1) |
Excludes certain items as detailed in the non-GAAP reconciliations in the Quarterly Performance Summary. |
Fourth Quarter 2021 compared to Third Quarter 2021
Total taxable-equivalent revenue was $5.6 billionfor the fourth quarter of 2021, a decrease of $36 million, or 0.6%, compared to the prior quarter.
Net interest income for the fourth quarter of 2021 was up slightly compared to the prior quarter due primarily to growth in the securities portfolio and lower funding costs, partially offset by lower purchase accounting accretion and lower fees from PPP loans. Average earning assets increased $9.1 billion, or 2.0%, compared to the prior quarter. Average securities increased $7.1 billion, or 4.9%, driven by strong deposit growth. In addition, average trading assets increased $1.0 billionor 16.6%, and average total loans increased $736 million, or 0.3%. Average deposits increased $8.2 billion, or 2.0%, primarily due to the ongoing impacts of fiscal and monetary stimulus and a seasonal increase for public funds.
The net interest margin was 2.76% for the fourth quarter, down five basis points compared to the prior quarter. The decline in the net interest margin was primarily due to lower purchase accounting accretion, lower fees from PPP loans and higher levels of liquidity. The yield on the total loan portfolio for the fourth quarter was 3.79%, down 11 basis points compared to the prior quarter primarily due to lower purchase accounting accretion, lower fees from PPP, and loan mix changes. The yield on the average securities portfolio for the fourth quarter was 1.57%, up seven basis points compared to the prior quarter. Core net interest margin was 2.55%, for the fourth quarter, down three basis points compared to the prior quarter driven by lower PPP fees and higher levels of liquidity.
The average cost of total deposits was 0.03%, flat compared to the prior quarter. The average cost on long-term debt was 1.35%, down 26 basis points compared to the prior quarter resulting from new hedging activity.
The provision for credit losses was a benefit of $103 millionand net charge-offs were $182 millionfor the fourth quarter, compared to a benefit of $324 millionand net charge-offs of $135 million, respectively, for the prior quarter. The net charge-off rate for the current quarter of 0.25% was up six basis points compared to third quarter 2021 due primarily to seasonally higher net losses in the consumer portfolio in the current period coupled with lower recoveries in the commercial portfolio.
Noninterest income was $2.3 billion, a decrease of $42 million, or 1.8%, compared to the prior quarter. Other income decreased $107 millionprimarily due to valuation changes from assets held for certain post-retirement benefits, which is primarily offset by lower personnel expense, and lower investment income from the Company's SBIC investments, and a valuation decrease for derivatives related to Visa shares. Residential mortgage income decreased $20 million, or 11%, primarily due to lower production income (due to lower volumes and margins). These decreases were partially offset by a $61 million, or 19%, increase in investment banking and trading income due to higher syndication fees, structured real estate, and merger and acquisition fees, partially offset by lower bond and equity origination fees. Additionally, insurance income increased $21 million, or 3.3%, primarily due to seasonality.
Noninterest expense was $3.7 billionfor the fourth quarter, down $95 million, or 2.5%, compared to the prior quarter. Merger-related and restructuring charges increased $40 millionprimarily due to costs in connection with system conversions and data center migrations. Incremental operating expenses related to the merger increased $24 millioncompared to third quarter 2021 primarily reflected in personnel expense. The prior quarter also included a $30 millionprofessional fee to develop an ongoing program to identify, prioritize, and roadmap teammate generated revenue growth and expense savings opportunities beyond the merger. Excluding the aforementioned items and the amortization of intangibles, adjusted noninterest expense was down $126 million, or 3.9%, compared to the prior quarter. Personnel expense decreased $91 million, or 4.2%, compared to third quarter 2021 due to lower incentives (primarily equity-based compensation due to retirement eligible teammates being fully expensed by the end of the third quarter), lower medical insurance claims, lower salaries driven by fewer FTEs, and lower other employee benefits due to the decrease in noninterest income for post-retirement benefits. Equipment expense decreased $30 million, or 19%, primarily due to lower equipment purchases. Marketing and customer development expense decreased $26 million, or 28%, due to advertising campaigns in the prior quarter to expand Truist brand awareness. Other expense increased $29 millionprimarily due to increased operating losses.
The provision for income taxes was $367 millionfor the fourth quarter of 2021, compared to $423 millionfor the prior quarter. The effective tax rate for the fourth quarter of 2021 was 18.6%, compared to 19.9% for the prior quarter, primarily due to discrete tax benefits in the current quarter.
Fourth Quarter 2021 compared to Fourth Quarter 2020
Total taxable-equivalent revenues were $5.6 billionfor the fourth quarter of 2021, a decrease of $89 million, or 1.6%, compared to the earlier quarter.
Net interest income for the fourth quarter of 2021 was down $127 million, or 3.7%, compared to the earlier quarter due to lower purchase accounting accretion, lower rates on earning assets, lower PPP fees, and a decrease in loan balances. These decreases were partially offset by growth in the securities portfolio and lower funding costs. Average earning assets increased $32.2 billion, or 7.3%, compared to the earlier quarter. The increase in average earning assets reflects a $51.4 billion, or 50%, increase in average securities, while average total loans and leases decreased $17.1 billion, or 5.6%, and average other earning assets decreased $4.3 billion, or 18%. The growth in average earning assets is a result of an increase in investment securities driven by strong deposit growth resulting from fiscal and monetary stimulus. Average deposits increased $35.7 billion, or 9.5%, compared to the earlier quarter, while average long-term debt decreased $2.7 billion, or 6.6%.
Net interest margin was 2.76%, down 32 basis points compared to the earlier quarter. The yield on the total loan portfolio for the fourth quarter of 2021 was 3.79%, down 33 basis points compared to the earlier quarter, reflecting the impact of lower purchase accounting accretion and a lower rate environment. The yield on the average securities portfolio was 1.57%, down three basis points compared to the earlier quarter primarily due to higher premium amortization.
The average cost of total deposits was 0.03%, down four basis points compared to the earlier quarter. The average cost on short-term borrowings was 0.55%, down 22 basis points compared to the earlier quarter. The average cost on long-term debt was 1.35%, down 29 basis points compared to the earlier quarter. The lower rates on interest-bearing liabilities reflect the lower rate environment.
The provision for credit losses was a benefit of $103 million, compared to a cost of $177 millionfor the earlier quarter. The current quarter includes a reserve release due to the improving economic outlook. Net charge-offs for the fourth quarter of 2021 totaled $182 millioncompared to $205 millionin the earlier quarter. The net charge-off ratio for the current quarter of 0.25% was down 2 basis points compared to the earlier quarter.
Noninterest income for the fourth quarter of 2021 increased $38 million, or 1.7%, compared to the earlier quarter. Insurance income increased $121 million, or 22%, due to acquisitions, as well as organic growth. Investment banking and trading income increased $23 million, or 6.5%, due to higher syndication fees and merger and acquisition fees, partially offset by lower trading income. Other income decreased $67 millionprimarily due to valuation changes from assets held for certain post-retirement benefits, which is primarily offset by lower personnel expense, and a valuation decrease for derivatives related to Visa shares. Residential mortgage banking income decreased $34 million, or 18%, primarily due to lower production related revenues as a result of lower gain on sale margins and volumes, partially offset by higher servicing income due to lower prepayment rates.
Noninterest expense for the fourth quarter of 2021 was down $133 million, or 3.5%, compared to the earlier quarter. Merger-related and restructuring charges decreased $96 millionprimarily due to facilities impairments in the earlier quarter, partially offset by costs in connection with a voluntary separation and retirement program in the current period. Incremental operating expenses related to the merger increased $36 million, primarily reflected in professional fees and outside processing. Excluding the aforementioned items and the amortization of intangibles, adjusted noninterest expense was down $43 million, or 1.4%, compared to the earlier quarter. Personnel expense decreased $12 million, or 0.6%, as higher incentive expenses due to variable compensation from higher revenues and improved overall performance relative to targets were largely offset by lower salaries due to fewer FTEs and lower other employee benefits due to the decrease in noninterest income for post-retirement benefits. Additionally, net occupancy expense decreased $21 million, or 10%, primarily due to branch and property consolidations. Other expense increased $20 milliondue to higher operating losses, teammate travel and other costs, partially offset by a decrease of $42 millionfor non-service-related pension cost components.
The provision for income taxes was $367 millionfor the fourth quarter of 2021, compared to $311 millionfor the earlier quarter. This produced an effective tax rate for the fourth quarter of 2021 of 18.6%, compared to 19.0% for the earlier quarter. The effective tax rate for both the fourth quarter of 2021 and 2020 reflect the impact of discrete tax benefits.
LOANS AND LEASES |
|
|
|
|
|
(dollars in millions) |
|
|
|
|
|
Average balances |
4Q21 |
3Q21 |
Change |
% Change |
|
Commercial: |
|
|
|
|
|
Commercial and industrial |
$ 134,804 |
$ 134,942 |
$ (138) |
(0.1)% |
|
CRE |
24,396 |
24,849 |
(453) |
(1.8) |
|
Commercial construction |
5,341 |
5,969 |
(628) |
(10.5) |
|
Total commercial |
164,541 |
165,760 |
(1,219) |
(0.7) |
|
Consumer: |
|
|
|
|
|
Residential mortgage |
47,185 |
45,369 |
1,816 |
4.0 |
|
Residential home equity and direct |
25,146 |
25,242 |
(96) |
(0.4) |
|
Indirect auto |
26,841 |
26,830 |
11 |
- |
|
Indirect other |
10,978 |
11,112 |
(134) |
(1.2) |
|
Student |
6,884 |
7,214 |
(330) |
(4.6) |
|
Total consumer |
117,034 |
115,767 |
1,267 |
1.1 |
|
Credit card |
4,769 |
4,632 |
137 |
3.0 |
|
Total loans and leases held for investment |
$ 286,344 |
$ 286,159 |
$ 185 |
0.1 |
|
In 4Q21, the Company reclassified the lease financing portfolio to the commercial and industrial portfolio. Prior periods were reclassified to conform to the current presentation. |
Average loans and leases held for investment for the fourth quarter of 2021 were $286.3 billion, up $185 million, or 0.1%, compared to the third quarter of 2021. Excluding a $2.0 billiondecrease in average PPP loans, average loans held for investment were up $2.2 billion, or 0.8%.
Average commercial loans decreased $1.2 billion, or 0.7%, as $1.8 billion, or 1.4%, growth within the commercial and industrial portfolio, excluding PPP, was more than offset by a $2.0 billiondecrease in average PPP loans (commercial and industrial), a $628 million decrease in average commercial construction loans, and a $453 million decrease in average CRE loans.
Average consumer loans increased $1.3 billion, or 1.1%, primarily due to a $1.8 billionincrease in residential mortgages due to the continued strategy to put certain correspondent channel production onto the balance sheet and lower prepayments. Student loans declined $330 million primarily due to paydowns on government guaranteed loans. Indirect other was down $134 million due to a seasonal decline in Sheffield.
DEPOSITS |
|
|
|
|
(dollars in millions) |
|
|
|
|
Average balances |
4Q21 |
3Q21 |
Change |
% Change |
Noninterest-bearing deposits |
$ 146,492 |
$ 141,738 |
$ 4,754 |
3.4% |
Interest checking |
110,506 |
107,802 |
2,704 |
2.5 |
Money market and savings |
137,676 |
136,094 |
1,582 |
1.2 |
Time deposits |
16,292 |
17,094 |
(802) |
(4.7) |
Total deposits |
$ 410,966 |
$ 402,728 |
$ 8,238 |
2.0 |
Average deposits for the fourth quarter of 2021 were $411.0 billion, an increase of $8.2 billion, or 2.0%, compared to the prior quarter. Average noninterest bearing deposits grew 3.4% compared to the prior quarter and represented 35.6% of total deposits for the fourth quarter of 2021, compared to 35.2% for the prior quarter. Average interest checking and money market and savings grew 2.5% and 1.2%, respectively, compared to the prior quarter.
Average time deposits decreased 4.7% primarily due to the maturity of higher-cost personal accounts.
CAPITAL RATIOS |
4Q21 |
3Q21 |
2Q21 |
1Q21 |
4Q20 |
Risk-based: |
(preliminary) |
|
|
|
|
Common equity Tier 1 |
9.6% |
10.1% |
10.2% |
10.1% |
10.0% |
Tier 1 |
11.3 |
11.9 |
12.0 |
12.0 |
12.1 |
Total |
13.2 |
13.9 |
14.2 |
14.3 |
14.5 |
Leverage |
8.7 |
9.0 |
9.1 |
9.4 |
9.6 |
Supplementary leverage |
7.4 |
7.8 |
7.9 |
8.3 |
8.7 |
Capital ratios remained strong compared to the regulatory requirements for well capitalized banks. Truist declared common dividends of $0.48per share during the fourth quarter of 2021 and repurchased $500 millionof common stock. The dividend and total payout ratios for the fourth quarter of 2021 were 42% and 75%, respectively.
Truist CET1 ratio was 9.6% as of December 31, 2021. The decline compared to the third quarter 2021 CET1 ratio reflects the $1.8 billionof capital deployed through the acquisition of Service Finance, LLC, the repurchase of $500 millionin common stock and strong loan growth driving an increase in risk-weighted assets.
Truist's average LCR was 114% for the three months ended December 31, 2021, compared to the regulatory minimum of 100%. Truist continues to maintain a strong liquidity position and is prepared to meet the funding needs of clients.
ASSET QUALITY |
|
|
|
|
|
(dollars in millions) |
4Q21 |
3Q21 |
2Q21 |
1Q21 |
4Q20 |
Total nonperforming assets |
$ 1,163 |
$ 1,204 |
$ 1,192 |
$ 1,299 |
$ 1,387 |
Total performing TDRs |
1,390 |
1,475 |
1,501 |
1,539 |
1,361 |
Total loans 90 days past due and still accruing |
1,930 |
1,872 |
2,068 |
2,072 |
2,008 |
Total loans 30-89 days past due |
2,044 |
1,823 |
1,824 |
1,788 |
2,220 |
Nonperforming loans and leases as a percentage of loans and leases held for investment |
0.38% |
0.38% |
0.37% |
0.40% |
0.44% |
Nonperforming loans and leases as a percentage of loans and leases, including loans held for sale |
0.38 |
0.40 |
0.39 |
0.42 |
0.44 |
Nonperforming assets as a percentage of total assets |
0.21 |
0.23 |
0.23 |
0.25 |
0.27 |
Loans 30-89 days past due and still accruing as a percentage of loans and leases |
0.71 |
0.64 |
0.64 |
0.61 |
0.74 |
Loans 90 days or more past due and still accruing as a percentage of loans and leases |
0.67 |
0.66 |
0.72 |
0.71 |
0.67 |
Loans 90 days or more past due and still accruing as a percentage of loans and leases, excluding PPP and other government guaranteed |
0.03 |
0.03 |
0.04 |
0.04 |
0.04 |
Allowance for loan and lease losses as a percentage of loans and leases held for investment |
1.53 |
1.65 |
1.79 |
1.94 |
1.95 |
Net charge-offs as a percentage of average loans and leases, annualized |
0.25 |
0.19 |
0.20 |
0.33 |
0.27 |
Ratio of allowance for loan and lease losses to net charge-offs, annualized |
6.14x |
8.79x |
8.98x |
5.87x |
7.15x |
Ratio of allowance for loan and lease losses to nonperforming loans and leases held for investment |
4.07x |
4.35x |
4.83x |
4.84x |
4.39x |
Nonperforming assets totaled $1.2 billionat December 31, 2021, down $41 millioncompared to September 30, 2021 due to declines in nonperforming loans held for sale and commercial loans, partially offset by an increase in indirect auto. Nonperforming loans and leases represented 0.38% of total loans and leases, down two basis points compared to September 30, 2021, primarily due to a decline in nonperforming loans held for sale. Nonperforming loans and leases held for investment were 0.38% of loans and leases held for investment at December 31, 2021, unchanged from the prior quarter.
Performing TDRs were down $85 millioncompared to the prior quarter primarily due to declines in the commercial and industrial and residential mortgage portfolios.
Loans 90 days or more past due and still accruing totaled $1.9 billionat December 31, 2021, up $58 millioncompared to the prior quarter. The ratio of loans 90 days or more past due and still accruing as a percentage of loans and leases was 0.67% at December 31, 2021, up one basis point from the prior quarter. Excluding government guaranteed loans, the ratio of loans 90 days or more past due and still accruing as a percentage of loans and leases was 0.03% at December 31, 2021, unchanged from September 30, 2021.
Loans 30-89 days past due and still accruing of $2.0 billionat December 31, 2021 were up seven basis points compared to the prior quarter due to a seasonal increase in the consumer portfolios.
Net charge-offs during the fourth quarter totaled $182 million, up $47 millioncompared to the prior quarter. The net charge-off ratio was 0.25%, up six basis points compared to the prior quarter due primarily to seasonally higher net losses in the consumer portfolio in the current period coupled with lower recoveries in the commercial portfolio.
The allowance for credit losses was $4.7 billionand includes $4.4 billionfor the allowance for loan and lease losses and $260 millionfor the reserve for unfunded commitments. The ALLL ratio was 1.53% compared to 1.65% at September 30, 2021. The ALLL covered nonperforming loans and leases held for investment 4.07X compared to 4.35X at September 30, 2021. At December 31, 2021, the ALLL was 6.14X annualized net charge-offs, compared to 8.79X at September 30, 2021.
SEGMENT RESULTS |
|
|
|
Change 4Q21 vs. |
|
(dollars in millions) |
|
|
|
||
Segment Net Income |
4Q21 |
3Q21 |
4Q20 |
3Q21 |
4Q20 |
Consumer Banking and Wealth |
$ 734 |
$ 869 |
$ 848 |
$ (135) |
$ (114) |
Corporate and Commercial Banking |
1,024 |
1,074 |
922 |
(50) |
102 |
Insurance Holdings |
117 |
105 |
99 |
12 |
18 |
Other, Treasury & Corporate |
(273) |
(344) |
(539) |
71 |
266 |
Total net income |
$ 1,602 |
$ 1,704 |
$ 1,330 |
$ (102) |
$ 272 |
Truist operates and measures business activity across three segments: Consumer Banking and Wealth, Corporate and Commercial Banking, and Insurance Holdings, with functional activities included in Other, Treasury and Corporate. The Company's business segment structure is based on the manner in which financial information is evaluated by management as well as the products and services provided or the type of client served. For additional information, see "Note 21. Operating Segments" of the Annual Report on Form 10-K for the year ended December 31, 2020.
Fourth Quarter 2021 compared to Third Quarter 2021
Consumer Banking and Wealth ("CB&W")
CB&W net income was $734 millionfor the fourth quarter of 2021, a decrease of $135 millioncompared to the prior quarter. Segment net interest income decreased $53 millionprimarily driven by a decline in the funding credit on deposits and lower purchase accounting accretion. The allocated provision for credit losses increased $64 millionwhich reflects a lower reserve release than the prior quarter and seasonally higher charge offs. Noninterest income decreased $36 milliondriven by lower residential mortgage income due to lower production income (due to lower volumes and margins), as well as lower wealth income driven by lower brokerage volumes and increased fee waivers. Noninterest expense increased $21 millionprimarily due to higher operating losses and higher professional fees and outside processing, partially offset by lower personnel expenses.
Average loans held for investment increased $702 million, or 0.5%, compared to the prior quarter primarily due to higher residential mortgage, partially offset by lower mortgage warehouse lending and student loans. Average total deposits increased $5.8 billion, or 2.4%, compared to the prior quarter primarily due to the ongoing impacts of fiscal and monetary stimulus.
Corporate and Commercial Banking ("C&CB")
C&CB net income was $1.0 billionfor the fourth quarter of 2021, a decrease of $50 millioncompared to the prior quarter. Segment net interest income decreased $32 milliondue to lower fee income associated with PPP loan forgiveness, lower purchase accounting accretion, and lower funding credit on non-interest bearing deposits, partially offset by growth in core loan and deposit balances. The allocated provision for credit losses increased $81 millionprimarily due to a lower reserve release than the prior quarter and decreased recoveries. Noninterest income increased $37 millionprimarily due to strong investment banking results (2nd highest quarter) driven by higher syndicated finance, structured real estate, and record merger and acquisition fees in the quarter, partially offset by lower investment income from the Company's SBIC and other equity investments. Noninterest expense remained stable.
Average loans held for investment decreased $435 million, or 0.3%, compared to the prior quarter primarily due to a decline in PPP loans (commercial and industrial) and CRE loans, partially offset by increases in core commercial and industrial loans. Average total deposits increased $3.3 billion, or 2.2%, compared to the prior quarter primarily due to the inflows of seasonal municipal tax related deposits.
Insurance Holdings ("IH")
IH net income was $117 millionfor the fourth quarter of 2021, an increase of $12 millioncompared to the prior quarter. Noninterest income increased $29 millionprimarily due to seasonality in property and casualty insurance commissions. Noninterest expense increased $10 millionprimarily due to fee income based incentive expense increases along with higher merger related expenses in the quarter.
Other, Treasury & Corporate ("OT&C")
OT&C generated a net loss of $273 millionfor the fourth quarter of 2021, compared to a net loss of $344 millionfor the prior quarter. Segment net interest income increased $100 millionprimarily due to lower net funding credits on liabilities to other segments and higher earnings in the securities portfolio from purchases to utilize excess liquidity. The allocated provision for credit losses increased $78 millionwhich reflects a reserve release in the prior quarter and a smaller release in the reserve for unfunded commitments in the current quarter. Noninterest income decreased $72 millionprimarily due to valuation changes from assets held for certain post-retirement benefits, which is primarily offset by lower personnel expense and a valuation decrease for derivatives related to Visa shares as well as lower investment income from Truist Ventures related partnerships in the current quarter. Noninterest expense decreased $120 millionprimarily due to lower equipment and marketing expenses and lower executive incentive expenses and benefits, partially offset by higher merger related and restructuring charges in the current quarter.
Fourth Quarter 2021 compared to Fourth Quarter 2020
Consumer Banking and Wealth
CB&W net income was $734 millionfor the fourth quarter of 2021, a decrease of $114 millioncompared to the earlier quarter. Segment net interest income decreased $206 millionprimarily due to a decline in the funding credit provided on deposits, lower purchase accounting accretion, and a decline in average loans. The allocated provision for credit losses decreased $57 millionwhich reflects the impact of an allowance build in the earlier quarter. Noninterest income and noninterest expense were stable compared to earlier quarter.
Corporate and Commercial Banking
C&CB net income was $1.0 billionfor the fourth quarter of 2021, an increase of $102 millioncompared to the earlier quarter. Segment net interest income decreased $144 millionprimarily due to lower fee income associated with PPP loan forgiveness, reduced funding credit on deposits, lower purchase accounting accretion, and a decline in average loans, partially offset by higher spreads on loans. The allocated provision for credit losses decreased $243 millionprimarily reflecting an reserve release in the current quarter, whereas the earlier quarter included a reserve build. The earlier quarter reflected significant uncertainty related to the economic impacts resulting from the pandemic, whereas the current quarter includes a reserve release due to the improving economic outlook. Noninterest income was stable compared to the earlier quarter with higher investment banking and trading income offset by lower commercial mortgage income and lower lease related disposition gains. Noninterest expense decreased $22 millionprimarily due to lower merger related and restructuring charges in the current quarter as well as lower operating lease depreciation and lower amortization of intangibles in the current quarter.
Insurance Holdings
IH net income was $117 millionfor the fourth quarter of 2021, an increase of $18 millioncompared to the earlier quarter. Noninterest income increased $119 millionprimarily due to acquisitions and higher property and casualty insurance production from strong organic growth. Noninterest expense increased $96 millionprimarily due to higher performance-based incentives and amortization of intangibles related to acquisitions.
Other, Treasury & Corporate
OT&C generated a net loss of $273 millionin the fourth quarter of 2021, compared to a net loss of $539 millionin the earlier quarter. Segment net interest income increased $229 millionprimarily due to lower net funding credits on liabilities to other segments and higher earnings in the securities portfolio from purchases to utilize excess liquidity. The allocated provision for credit losses increased $23 millionwhich reflects a reserve release in the earlier quarter. Noninterest income decreased $78 millionprimarily due to valuation changes from assets held for certain post-retirement benefits, which is primarily offset by lower personnel expense, and a valuation decrease for derivatives related to Visa shares. Noninterest expense decreased $202 millionprimarily due to lower merger related charges in the current quarter and lower other employee benefits expense due to the decrease in noninterest income for post-retirement benefits.
Earnings Presentation and Quarterly Performance Summary
To listen to Truist's live fourth quarter 2021 earnings conference call at 8:30 a.m. ETtoday, please call 855-303-0072 and enter the participant code 100038. A presentation will be used during the earnings conference call and is available on our website at https://ir.truist.com/events-and-presentation. Replays of the conference call will be available for 30 days by dialing 888-203-1112 (access code 100038).
The presentation, including an appendix reconciling non-GAAP disclosures, and Truist's Fourth Quarter 2021 Quarterly Performance Summary, which contains detailed financial schedules, are available at https://ir.truist.com/earnings.
About Truist
Truist Financial Corporation is a purpose-driven financial services company committed to inspiring and building better lives and communities. Formed by the historic merger of equals of BB&T and SunTrust, Truist has leading market share in many high-growth markets in the country. The company offers a wide range of services including retail, small business and commercial banking; asset management; capital markets; commercial real estate; corporate and institutional banking; insurance; mortgage; payments; specialized lending; and wealth management. Headquartered in Charlotte, North Carolina, Truist is a top 10 U.S. commercial bank with total assets of $541 billionas of December 31, 2021. Truist Bank, Member FDIC. Learn more at Truist.com.
Capital ratios and return on risk-weighted assets are preliminary.
This news release contains financial information and performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America("GAAP"). Truist's management uses these "non-GAAP" measures in their analysis of the Corporation's performance and the efficiency of its operations. Management believes these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results with prior periods and demonstrate the effects of significant items in the current period. The Corporation believes a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. Truist's management believes investors may find these non-GAAP financial measures useful. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Below is a listing of the types of non-GAAP measures used in this news release:
A reconciliation of each of these non-GAAP measures to the most directly comparable GAAP measure is included in the appendix to Truist's Fourth Quarter 2021 Earnings Presentation, which is available at https://ir.truist.com/earnings.
This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, regarding the financial condition, results of operations, business plans and the future performance of Truist. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "projects," "may," "will," "should," "would," "could" and other similar expressions are intended to identify these forward-looking statements.
Forward-looking statements are not based on historical facts but instead represent management's expectations and assumptions regarding Truist's business, the economy, and other future conditions. Such statements involve inherent uncertainties, risks, and changes in circumstances that are difficult to predict. As such, Truist's actual results may differ materially from those contemplated by forward-looking statements. While there can be no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those contemplated by forward-looking statements include the following, without limitation, as well as the risks and uncertainties more fully discussed under Part I, Item 1A-Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2020 and in Truist's subsequent filings with the Securities and Exchange Commission:
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Except to the extent required by applicable law or regulation, Truist undertakes no obligation to revise or update any forward-looking statements.
SOURCE Truist Financial Corporation