Through the end of March, investment banking and trading fees totaled $323 million, up 23.8% year over year, the Charlotte, North Carolina, company said. It was a marked improvement from previous quarters in which investment banking and trading revenues slumped amid an industrywide downturn in capital markets activities.

The upturn reflected strength in equity capital and mergers-and-acquisitions specifically, Truist CEO Bill Rogers told analysts during a conference call to discuss results.

But that's not all, he said. Internally, the $531 billion-asset company is making progress in growing its investment banking and trading business. It is having success in cross-selling through its commercial bank, and it has added more than 30 investment bankers at the "managing director" level who bring "great expertise and great access," Rogers said.

As capital markets activity resumes, Truist is gaining market share in certain capital-markets products and expanding into industries "that are primed for growth," Rogers added.

"A lot of it, obviously, is from market improvement, but … we've been investing in this business for quite some time," Rogers said. "Our existing team is really sort of rising to the challenge."

The boost in investment banking and trading fees helped lift Truist's first-quarter noninterest income to $1.4 billion for the quarter, representing a 1.8% increase year over year. Higher wealth management fees also contributed to the lift, which was partially offset by a slowdown in mortgage banking income and fewer service-related charges on deposits.

Truist is one of several U.S. regional banks with larger capital markets businesses that reported year-over-year increases in fee income for the first quarter. U.S. Bancorp in Minneapolis, KeyCorp in Cleveland and Citizens Financial Group in Providence, Rhode Island, all reported high single-digit increases in fee income for the quarter, according to a Fitch Ratings report.

The boost in fee income comes as banks are facing the possibility that trends in net interest income will remain weak, with growth hampered by the potential for higher-for-longer interest rates. The Federal Reserve has recently signaled that it may keep interest rates elevated for a longer period than many banks assumed in their 2024 outlooks, which could further compress margins.

At Truist, net interest income fell 12.6% year over year due to higher funding costs and lower earning assets, the company said. Outside of banks that have big credit card businesses, such as JPMorgan Chase and Citigroup, net interest income has declined across most banks, Fitch said in its report.

As a result of potential ongoing pressure on net interest income, Truist on Monday revised its full-year revenue guidance downward. It is now calling for a year-over-year revenue decline of 4% to 5%. 

In January, it forecasted a year-over-year revenue decline of 1% to 3%, but that range would have been around 3% to 5% if anticipated earnings from the insurance business had been excluded. Trust has since agreed to sell Truist Insurance Holdings to two private-equity firms and other investors.

During the second quarter, Truist is predicting that net interest income will decline by 2% to 3%.

Truist is currently assuming that the Fed will cut rates three times in 2024, Chief Financial Officer Mike Maguire said on the call. While the firm still expects net interest income to "trough" in the second quarter and then "modestly improve" in the back half of the year, a scenario with fewer than three rate cuts this year would "add pressure" to the net interest income outlook and lead to full-year revenues "coming in at the lower end of our range," Maguire cautioned.

The company noted that its revised revenue guidance does not include earnings from the highly profitable insurance business that it has agreed to sell. The sale, which is expected to generate $10.1 billion of after-tax cash proceeds, is on track to close in the second quarter, Rogers said on the call.

The proceeds will be divvied up in a few different buckets — one for balance sheet repositioning that involves selling securities, a second for facilitating loan growth and a third for potential share repurchases.

The company did not provide details Monday about how many shares it would like to repurchase, though executives said they hope to "resume meaningful share repurchases later in the year." 

For the quarter, Truist reported net income of $1.1 billion, or 81 cents per share. That was down from net income of $1.4 billion, or $1.05 per share, in the same quarter last year.

The results included a trio of notable items, including a Federal Deposit Insurance Corp. special assessment of $75 million and restructuring charges of $70 million. Last fall, Truist began a $750 million cost-cutting program that included reductions in branches and headcount.

Noninterest expenses for the quarter totaled nearly $3 billion, down about 2% from the year-ago period. Excluding the three notable items, noninterest expenses were down about 4% year over year.

Expenses have been a focal point at Truist since it was created in late 2019 through the merger of BB&T and SunTrust Bank. On Monday, the company revised its 2024 expense guidance downward, saying that it now expects total expenses to be flat compared with last year. 

In January, Truist had predicted that its expenses would be flat or rise 1% for the year.

Overall, the company reported "good expense control," Wells Fargo analyst Mike Mayo said in a research note. Excluding software and compensation costs, most areas of expenses showed declines on both a quarter-over-quarter and a year-over-year basis, he added.