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Muted Loan Growth to Mar Truist Financial (TFC) Q3 Earnings

Muted Loan Growth to Mar Truist Financial (TFC) Q3 Earnings

Truist Financial Corporation TFC is slated to announce third-quarter 2020 results on Oct 15, before market open. Per the Fed’s latest data, commercial and industrial loan (C&I) balances (accounting for almost 50% of the company’s total loans and leases held for investment) declined in the third quarter as overall lending activities remained muted due to continued fears related to the coronavirus outbreak.

Moreover, the Zacks Consensus Estimate for average earning assets for the to-be-reported quarter is pegged at $435.2 billion, indicating a 2.6% decline from the prior quarter’s reported figure.

Thus, because of muted growth in loans along with near-zero interest rates, Truist Financial’s net interest margin (NIM) and net interest income (NII) are expected to have been hurt in the third quarter. Management anticipates NIM to be flat sequentially.

The consensus estimate for NII for the to-be-reported quarter of $3.31 billion indicates a 4.1% decline sequentially.

Other Key Estimates for Q3

Non-interest Income: The consensus estimate for insurance commission is pegged at $513 million, indicating a fall of 11.7% sequentially. The consensus mark for income from bank-owned life insurance is $45 million, suggesting no change from the previous quarter’s reported number.

The Zacks Consensus Estimate for service charges on deposits of $225 million suggests a rise of 11.4% from the prior quarter. However, the consensus estimate for operating lease income of $78 million indicates a decline of 6% from the previous quarter’s reported figure.

The consensus estimate for total non-interest income of $2.03 billion points to a 16.3% decline on a sequential basis.

Expenses: While the company has been witnessing a continued rise in overall expenses over the past several quarters because of investments in technology upgrades and merger integration, management anticipates core non-interest expenses (excluding merger costs and amortization) for the to-be-reported quarter to be down

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Strict rules keep business out of New Mexico loan program

Strict rules keep business out of New Mexico loan program

SANTA FE, N.M. (AP) — Only about $20 million of a $400 million loan program for New Mexico small businesses hit by the pandemic has been approved to send out since the program began in August, according to the state agency running the program.

“We created the program, believing that about 5,000 applications would be processed. And it’s a much smaller volume than that,” said New Mexico Finance Authority CEO Marquita Russel at a presentation to state legislators Tuesday.

Low participation has saved the agency money on contractors, Russel said.

But it’s also a sign that the legislation isn’t reaching many small businesses. Fewer than 900 businesses have applied for loans under the program, which range from $500 to $75,000.


That’s despite ongoing pain in the New Mexico economy where the 11.3% August unemployment rate was far higher than the national average of 8.4%, and businesses face occupancy limits ranging from 75% for hotels to 25% for restaurants.

Hundreds of applications have been rejected.

Around 85% of those businesses that didn’t qualify for the Small Business Recovery Loan Fund failed to meet the requirement of showing a loss of at least 30% of revenue in April and May compared with the same period in 2019.

That included for-profit companies that already had “business in the hopper,” Russel said, even if they’re going broke now.

It also includes nonprofits that raise the bulk of their money during other times of the year, and there’s no flexibility in the program for businesses that are less than a year old and therefore can’t compare revenues.

The fund gives two months’ worth of operating expenses to eligible entities owned by residents at an interest rate of around 2%, with no payments required in the first year.

Investment and Pension Oversight Committee Chairman Sen. George

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BoA Goes Micro With Consumer Loan Up To $500

BoA Goes Micro With Consumer Loan Up To $500

Bank of America (BoA) is muscling into the payday loan business, minus the sky-high fees, as the pandemic continues to upend the financial landscape, according to a post on the company website.

BoA on Thursday (Oct. 8) unveiled a new short-term loan program called Balance Assist aimed at customers in need of a few hundred dollars to make ends meet. Customers can apply for up to $500, in increments of $100, for a flat, $5 fee, with repayment in three equal installments over a three-month period.

The move comes as federal regulatory agencies urge banks and other lenders to pony up small loans to consumers to help them navigate the coronavirus-driven downturn.

BoA joins U.S. Bank and KeyBank, the only other major banks to offer such a small loan program, according to The Charlotte Observer.

“Balance Assist is the latest in a powerful set of transparent, easy-to-use solutions to help our clients budget, save, spend and borrow carefully and confidently,” said D. Steve Boland, president of Retail at Bank of America, said in the post. “People want the power to achieve financial freedom and stability, and are seeking simple, clear solutions and advice to help them along the way.”

BoA said in the post that it will begin offering the new, small-loan product in “select states” by January, followed by a larger rollout across the country early next year. The bank is limiting eligibility to customers who have had a BoA checking account for a year.

In March, five federal regulatory agencies — the Federal Reserve’s Board of Governors, Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corp. (FDIC), National Credit Union Administration and Office of the Comptroller of the Currency — urged bankers to begin offering such small-dollar loans to help consumers

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