ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management’s discussion and analysis of the financial condition and operating results of Truist, which should be read in conjunction with the Consolidated Financial Statements and the accompanying Notes to the Consolidated Financial Statements in this Form 10-Q, as well as with Truist’s Annual Report on Form 10-K for the year ended December 31, 2025.
A description of certain factors that may affect our future results and risk factors is set forth in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.
MD&A includes certain non-GAAP measures, including NII-TE, NIM-TE, Revenue-TE, TBVPS, and ROTCE. For reconciliations of TBVPS and ROTCE to the most directly comparable GAAP measures, see the “Non-GAAP Financial Measures” section in MD&A. Reconciliations of TE non-GAAP measures to the most directly comparable GAAP measures are included within Table 1: Earnings Highlights, Table 2-1: Taxable-Equivalent Net Interest Income and Rate / Volume Analysis, and Table 2-2: Taxable-Equivalent Net Interest Income and Rate / Volume Analysis. NIM – TE is calculated using net interest income on a TE basis to determine the total yield on interest-earning assets.
Executive Overview
We delivered strong results in the second-quarter of 2026, with earnings per share increasing 37% year over year, driven by disciplined execution against our strategic priorities, higher fee income, strong credit performance, and the return of capital to shareholders.
Truist’s results of operations for the second-quarter of 2026 produced an annualized return on average assets of 1.1%, an annualized return on average common shareholders’ equity of 10.4%, and ROTCE of 15.4% compared to prior year returns of 0.9%, 8.1%, and 12.3%,respectively.
We continued to deepen client relationships, grow in attractive markets, and improve operating efficiency and profitability.
T1During the second quarter of 2026, we returned $1.8 billion of capital to our common shareholders through $636 million of common stock dividends and $1.2 billion in common share repurchases. As of June 30, 2026, we had $7.7 billion remaining under our $10.0 billion common share-repurchase authorization.
T2On June 15, 2026, the Company announced a leadership succession plan where, effective September 1, 2026, Michael P. Lyons will become President and CEO of Truist Financial Corporation and Truist Bank and will join the Boards of Directors of Truist Financial Corporation and Truist Bank. William H. Rogers, Jr. will retire as President and CEO effective September 1, 2026 and will serve as Executive Chair of Truist Financial Corporation and Truist Bank and continue to serve on the respective Boards through Truist's 2027 annual meeting of shareholders in order to support an orderly leadership transition.
Table 1: Earnings Highlights
(Dollars in millions)
Three Months Ended June 30,
Change
Six Months Ended June 30,
Change
2026
2025
2026 vs. 2025
2026
2025
2026 vs. 2025
Net interest income
$
3,621
$
3,587
$
34
$
7,220
$
7,094
$
126
TE adjustment(1)
46
48
(2)
91
96
(5)
Net interest income - TE(1)
3,667
3,635
32
7,311
7,190
121
Noninterest income
1,644
1,400
244
3,197
2,792
405
Total revenue
5,265
4,987
278
10,417
9,886
531
Total revenue - TE(1)
5,311
5,035
276
10,508
9,982
526
Noninterest expense
3,055
2,986
69
6,038
5,892
146
Income before income taxes
1,815
1,513
302
3,505
3,048
457
Provision for income taxes
262
273
(11)
471
547
(76)
Net income
1,553
1,240
313
3,034
2,501
533
Net income available to common shareholders
1,519
1,180
339
2,896
2,337
559
Diluted earnings per common share
$
1.23
$
0.90
$
0.33
$
2.31
$
1.78
$
0.53
Return on average assets
1.1
%
0.9
%
20 bps
1.1
%
0.9
%
20 bps
Return on average common shareholders’ equity
10.4
8.1
230 bps
9.9
8.1
180 bps
ROTCE(1)
15.4
12.3
310 bps
14.6
12.3
230 bps
NIM - TE(1)
2.98
3.02
(4) bps
3.00
3.02
(2) bps
(1)Represents a non-GAAP measure. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in the “Non-GAAP Financial Measures” section of this report or within the table above for TE measures. NIM – TE is calculated using net interest income on a TE basis to determine the total yield on interest-earning assets.
Truist Financial Corporation 49
Net income available to common shareholders was $1.5 billion for the second quarter of 2026, an increase of 29% compared to the second quarter of 2025.
Total revenue - TE was up 5.5% compared to the second quarter of 2025.
•TE net interest income increased $32 million, or 0.9%, compared to the second quarter of 2025, driven by higher earning assets and loan growth, partially offset by lower loan spreads and fixed-rate debt repricing. T3NIM - TE was 2.98%, down four basis points compared to the second quarter of 2025.
•T4Noninterest income increased $244 million, or 17%, compared to the second quarter of 2025, driven by increases in investment banking and trading income and wealth management income.
T5Noninterest expense was up $69 million, or 2.3%, compared to the second quarter of 2025, primarily due to higher personnel expense, partially offset by lower professional fees and outside processing expense.
Asset quality:
•Nonperforming loans and leases HFI were 0.51% of loans and leases HFI at June 30, 2026, up three basis points compared to December 31, 2025.
•T6Loans 90 days or more past due and still accruing totaled $698 million at June 30, 2026, stable compared to December 31, 2025. Excluding government guaranteed loans, the ratio of loans 90 days or more past due and still accruing was 0.04% as a percentage of loans and leases HFI at June 30, 2026, down one basis point compared to December 31, 2025.
•The ACL was $5.3 billion and included $5.0 billion for the ALLL and $333 million for the reserve for unfunded commitments. The ALLL as a percentage of loans and leases HFI was 1.51%, down two basis points compared to December 31, 2025.
•The provision for credit losses was $395 million compared to $488 million for the second quarter of 2025.
•NCOs as a percentage of loans and leases were 50 basis points, down one basis point compared to the second quarter of 2025.
Capital and liquidity:
•Truist’s preliminary CET1 ratio was 10.9% as of June 30, 2026, up 10 basis points compared to December 31, 2025, primarily due to current quarter earnings and a reduction in risk-weighted assets, partially offset by capital returned to shareholders.
•Truist declared common dividends of $0.52 per share during the second quarter of 2026, and repurchased $1.2 billion of common stock. For the second quarter of 2026, the dividend payout ratio was 42%, and the total payout ratio was 121%.
•Truist’s average consolidated LCR was 113% for the three months ended June 30, 2026, relative to the regulatory minimum of 100%.
•Truist’s book value per common share at June 30, 2026, was $48.04, compared to $47.74 at December 31, 2025. Truist’s TBVPS was $33.40 at June 30, 2026, compared to $33.48 at December 31, 2025.
•On May 15, 2026, Truist issued $500 million of Series S non-cumulative perpetual preferred stock with a stated dividend rate of 6.25% per annum for net proceeds of approximately $495 million.
50 Truist Financial Corporation
Analysis of Results of Operations
Net Interest Income
Three Months Ended June 30, 2026 compared to the Three Months Ended June 30, 2025
TE net interest income was up $32 million, or 0.9%, driven by higher earning assets and loan growth, partially offset by lower loan spreads and fixed-rate debt repricing. NIM - TE was 2.98%, down four basis points.
◦Average earning assets increased $11.5 billion, or 2.4%, primarily due to an increase in T7average total loans of $17.9 billion, or 5.7%, partially offset by a decline in average securities of $3.7 billion, or 3.0%, and average other earning assets (primarily cash at the Federal Reserve) of $2.5 billion, or 6.2%.
◦The yield on the average total loan portfolio was 5.68%, down 33 basis points. The yield on the average securities portfolio was 2.96%, down 20 basis points.
◦Average deposits increased $4.4 billion, or 1.1%, average short-term borrowings increased $2.7 billion, or 10%, and average long-term debt increased $6.4 billion, or 19%.
◦The average cost of total deposits was 1.56%, down 29 basis points. The average cost of short-term borrowings was 3.97%, down 50 basis points. The average cost of long-term debt was 4.77%, down 25 basis points.
Six Months Ended June 30, 2026 compared to the Six Months Ended June 30, 2025
TE net interest income for the six months ended June 30, 2026 was up $121 million, or 1.7%, driven by higher earning assets and loan growth, partially offset by lower loan spreads and fixed-rate debt repricing. NIM - TE was 3.0%, down two basis points.
•Average earning assets increased $10.8 billion, or 2.3%, primarily due to an increase in average total loans of $19.7 billion, or 6.3%, partially offset by declines in average securities of $5.8 billion, or 4.7%, and other earning assets (primarily cash at the Federal Reserve) of $3.0 billion, or 7.6%.
•The yield on the average total loan portfolio was 5.70%, down 29 basis points. The yield on the average securities portfolio was 2.95% for 2026, down 21 basis points.
•Average deposits increased $5.5 billion, or 1.4%, average short-term borrowings increased $1.5 billion, or 5.3%, and average long-term debt increased $5.6 billion, or 17%.
•The average cost of total deposits was 1.56%, down 26 basis points. The average cost of short-term borrowings was 3.87%, down 61 basis points. The average cost of long-term debt was 4.79%, down 25 basis points.
The major components of net interest income - TE and the related annualized yields as well as the variances between the periods caused by changes in interest rates versus changes in volumes are summarized below.
Truist Financial Corporation 51
Table 2-1: Taxable-Equivalent Net Interest Income and Rate / Volume Analysis
Three Months Ended June 30,
(Dollars in millions)
Average Balances(1)
Annualized Yield/Rate(2)
Income/Expense(2)
Incr.
(Decr.)
Change due to
2026
2025
2026
2025
2026
2025
Rate
Volume
Assets
AFS and HTM securities at amortized cost:
U.S. Treasury
$
13,454
$
14,034
4.32
%
5.20
%
$
145
$
181
$
(36)
$
(29)
$
(7)
GSE
464
463
3.84
3.73
4
5
(1)
(1)
—
Agency MBS
103,367
106,947
2.78
2.89
717
772
(55)
(30)
(25)
States and political subdivisions
347
370
4.27
4.20
4
4
—
—
—
Other
506
15
2.12
4.53
3
—
3
—
3
Total securities
118,138
121,829
2.96
3.16
873
962
(89)
(60)
(29)
Interest earning trading assets
5,618
5,896
5.32
5.98
75
88
(13)
(9)
(4)
Other earning assets(3)
36,956
39,417
3.89
4.51
363
448
(85)
(59)
(26)
Loans and leases, net of unearned income:
Commercial and industrial
168,817
158,491
5.25
5.72
2,211
2,262
(51)
(193)
142
CRE
24,938
19,687
5.56
6.22
349
308
41
(35)
76
Commercial construction
7,455
8,613
6.18
6.85
112
144
(32)
(14)
(18)
Residential mortgage
56,342
56,789
4.15
4.08
585
579
6
11
(5)
Home equity
9,656
9,586
7.02
7.47
169
178
(9)
(10)
1
Indirect auto
24,430
24,158
7.06
7.32
429
441
(12)
(17)
5
Other consumer
32,661
30,387
8.33
8.37
679
634
45
(3)
48
Credit card
4,863
4,890
10.93
11.35
133
139
(6)
(5)
(1)
Total loans and leases HFI
329,162
312,601
5.68
6.01
4,667
4,685
(18)
(266)
248
LHFS
2,587
1,240
5.54
6.15
35
19
16
(2)
18
Total loans and leases
331,749
313,841
5.68
6.01
4,702
4,704
(2)
(268)
266
Total earning assets
492,461
480,983
4.89
5.16
6,013
6,202
(189)
(396)
207
Nonearning assets
58,004
56,086
Total assets
$
550,465
$
537,069
Liabilities and Shareholders’ Equity
Interest-bearing deposits:
Interest-checking
$
123,556
$
116,193
2.12
2.51
652
726
(74)
(118)
44
Money market and savings
136,423
135,607
1.79
2.22
608
751
(143)
(147)
4
Time deposits
41,270
41,997
3.06
3.50
315
367
(52)
(46)
(6)
Total interest-bearing deposits
301,249
293,797
2.10
2.52
1,575
1,844
(269)
(311)
42
Short-term borrowings
28,893
26,241
3.97
4.47
286
292
(6)
(34)
28
Long-term debt
40,640
34,213
4.77
5.02
485
431
54
(22)
76
Total interest-bearing liabilities
370,782
354,251
2.54
2.91
2,346
2,567
(221)
(367)
146
Noninterest-bearing deposits
103,620
106,686
Other liabilities
12,275
11,897
Shareholders’ equity
63,788
64,235
Total liabilities and shareholders’ equity
$
550,465
$
537,069
Average interest-rate spread
2.35
%
2.25
%
NIM/net interest income - TE(2)
2.98
%
3.02
%
$
3,667
$
3,635
$
32
$
(29)
$
61
Less: TE adjustment
46
48
Net interest income
$
3,621
$
3,587
Memo: Total deposits
$
404,869
$
400,483
1.56
%
1.85
%
$
1,575
$
1,844
$
(269)
(1)Represents daily average balances. Unrealized gains and losses on AFS securities are included in nonearning assets. Active hedge basis adjustments for fair value hedges are included in nonearning assets and other liabilities.
(2)Amounts related to interest income and yields are on a TE basis, which represents a non-GAAP measure, utilizing the federal income tax rate of 21% for the periods presented. Interest income includes certain fees, deferred costs, and dividends. A reconciliation of net interest income - TE to net interest income is included within the table above. NIM – TE is calculated using net interest income on a TE basis to determine the total yield on interest-earning assets. The change in interest not solely due to changes in rate or volume has been allocated based on the pro-rata absolute dollar amount of each.
(3)Includes cash equivalents, interest-bearing deposits with banks, FHLB stock, and other earning assets.
52 Truist Financial Corporation
Table 2-2: Taxable-Equivalent Net Interest Income and Rate / Volume Analysis
Six Months Ended June 30,
(Dollars in millions)
Average Balances(1)
Annualized Yield/Rate(2)
Income/Expense(2)
Incr.
(Decr.)
Change due to
2026
2025
2026
2025
2026
2025
Rate
Volume
Assets
AFS and HTM securities at amortized cost:
U.S. Treasury
$
13,297
$
14,448
4.40
%
5.19
%
$
290
$
372
$
(82)
$
(54)
$
(28)
GSE
469
462
3.91
3.74
9
9
—
—
—
Agency MBS
102,732
107,643
2.75
2.88
1,413
1,549
(136)
(68)
(68)
States and political subdivisions
347
370
4.29
4.20
7
8
(1)
—
(1)
Other
289
16
2.06
4.63
3
—
3
—
3
Total securities
117,134
122,939
2.95
3.16
1,722
1,938
(216)
(122)
(94)
Interest earning trading assets
5,712
5,763
5.20
5.85
149
168
(19)
(18)
(1)
Other earning assets(3)
36,210
39,208
3.83
4.52
696
889
(193)
(128)
(65)
Loans and leases, net of unearned income:
Commercial and industrial
167,732
156,861
5.27
5.71
4,390
4,446
(56)
(354)
298
CRE
24,554
19,759
5.60
6.17
688
610
78
(60)
138
Commercial construction
7,649
8,673
6.20
6.84
229
289
(60)
(26)
(34)
Residential mortgage
56,400
56,226
4.14
4.06
1,167
1,141
26
22
4
Home equity
9,661
9,578
7.00
7.47
336
355
(19)
(22)
3
Indirect auto
24,884
23,705
7.07
7.26
872
853
19
(23)
42
Other consumer
32,358
29,843
8.36
8.35
1,341
1,236
105
1
104
Credit card
4,860
4,870
10.86
11.47
262
277
(15)
(14)
(1)
Total loans and leases HFI
328,098
309,515
5.70
5.99
9,285
9,207
78
(476)
554
LHFS
2,270
1,187
5.40
6.04
61
36
25
(4)
29
Total loans and leases
330,368
310,702
5.70
5.99
9,346
9,243
103
(480)
583
Total earning assets
489,424
478,612
4.89
5.14
11,913
12,238
(325)
(748)
423
Nonearning assets
57,887
55,753
Total assets
$
547,311
$
534,365
Liabilities and Shareholders’ Equity
Interest-bearing deposits:
Interest-checking
$
121,843
$
112,720
2.10
2.44
1,271
1,366
(95)
(200)
105
Money market and savings
136,265
136,249
1.80
2.21
1,217
1,494
(277)
(277)
—
Time deposits
40,309
41,104
3.06
3.53
612
720
(108)
(94)
(14)
Total interest-bearing deposits
298,417
290,073
2.09
2.49
3,100
3,580
(480)
(571)
91
Short-term borrowings
29,776
28,275
3.87
4.48
572
628
(56)
(88)
32
Long-term debt
38,900
33,320
4.79
5.04
930
840
90
(43)
133
Total interest-bearing liabilities
367,093
351,668
2.52
2.89
4,602
5,048
(446)
(702)
256
Noninterest-bearing deposits
103,496
106,293
Other liabilities
12,433
12,269
Shareholders’ equity
64,289
64,135
Total liabilities and shareholders’ equity
$
547,311
$
534,365
Average interest-rate spread
2.37
%
2.25
%
NIM/net interest income - TE(2)
3.00
%
3.02
%
$
7,311
$
7,190
$
121
$
(46)
$
167
Less: TE adjustment(2)
91
96
Net interest income
$
7,220
$
7,094
Memo: Total deposits
$
401,913
$
396,366
1.56
%
1.82
%
$
3,100
$
3,580
$
(480)
(1)Represents daily average balances. Unrealized gains and losses on AFS securities are included in nonearning assets. Active hedge basis adjustments for fair value hedges are included in nonearning assets and other liabilities.
(2)Amounts related to interest income and yields are on a TE basis, which represents a non-GAAP measure, utilizing the federal income tax rate of 21% for the periods presented. Interest income includes certain fees, deferred costs, and dividends. A reconciliation of net interest income - TE to net interest income is included within the table above. NIM – TE is calculated using net interest income on a TE basis to determine the total yield on interest-earning assets. The change in interest not solely due to changes in rate or volume has been allocated based on the pro-rata absolute dollar amount of each.
(3)Includes cash equivalents, interest-bearing deposits with banks, FHLB stock, and other earning assets.
Truist Financial Corporation 53
Noninterest Income
Noninterest income is a significant driver of Truist’s financial results. The Company has diversified its sources of revenue to reduce its reliance on traditional spread-based interest income, as certain fee-based activities are a relatively stable revenue source during periods of changing interest rates. The following table provides the components of Truist’s noninterest income:
Table 3: Noninterest Income
Three Months Ended June 30,
% Change
Six Months Ended June 30,
% Change
(Dollars in millions)
2026
2025
2026 vs. 2025
2026
2025
2026 vs. 2025
Wealth management income
$
375
$
348
7.8
%
$
745
$
692
7.7
%
Card and treasury management fees
353
351
0.6
691
684
1.0
Investment banking and trading income
352
205
71.7
724
478
51.5
Other deposit revenue
120
108
11.1
240
225
6.7
Mortgage banking income
116
107
8.4
249
215
15.8
Lending related fees
120
99
21.2
238
194
22.7
Securities gains (losses)
—
(18)
NM
—
(19)
NM
Other income
208
200
4.0
310
323
(4.0)
Total noninterest income
$
1,644
$
1,400
17.4
$
3,197
$
2,792
14.5
Three Months Ended June 30, 2026 compared to the Three Months Ended June 30, 2025
Noninterest income was up $244 million, or 17%, compared to the second quarter of 2025.
•Investment banking and trading income increased primarily due to higher trading income and capital markets revenue.
•Wealth management income increased primarily due to higher assets under management.
Six Months Ended June 30, 2026 compared to the Six Months Ended June 30, 2025
Noninterest income was up $405 million, or 15%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025.
•Investment banking and trading income increased primarily due to higher trading income and capital markets revenue.
•Wealth management income increased primarily due to higher assets under management.
•Lending related fees increased primarily due to higher leasing-related gains.
•Mortgage banking income increased primarily due to residential servicing portfolio acquisitions and higher commercial and residential production revenues, partially offset by higher prepayment speeds.
Noninterest Expense
The following table provides the components of Truist’s noninterest expense:
Table 4: Noninterest Expense
Three Months Ended June 30,
% Change
Six Months Ended June 30,
% Change
(Dollars in millions)
2026
2025
2026 vs. 2025
2026
2025
2026 vs. 2025
Personnel expense
$
1,792
$
1,678
6.8
%
$
3,519
$
3,282
7.2
%
Professional fees and outside processing
335
373
(10.2)
648
737
(12.1)
Software expense
239
231
3.5
469
461
1.7
Net occupancy expense
171
181
(5.5)
350
349
0.3
Equipment expense
79
89
(11.2)
164
171
(4.1)
Marketing and customer development
91
82
11.0
170
157
8.3
Amortization of intangibles
63
73
(13.7)
127
148
(14.2)
Regulatory costs
61
55
10.9
129
124
4.0
Other expense
224
224
—
462
463
(0.2)
Total noninterest expense
$
3,055
$
2,986
2.3
$
6,038
$
5,892
2.5
54 Truist Financial Corporation
Three Months Ended June 30, 2026 compared to the Three Months Ended June 30, 2025
Noninterest expense was up $69 million, or 2.3%, compared to the second quarter of 2025.
•Personnel expense increased primarily due to higher salaries and incentives, partially offset by lower benefit expenses.
•Professional fees and outside processing expense decreased primarily due to the completion of various projects.
Six Months Ended June 30, 2026 compared to the Six Months Ended June 30, 2025
Noninterest expense was up $146 million, or 2.5%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025.
•Personnel expense increased primarily due to higher salaries and incentives.
•Professional fees and outside processing expense decreased primarily due to the completion of various projects.
Income Taxes
The following table provides information about the effective tax rate:
Table 5: Effective Tax Rate
Three Months Ended June 30,
% Change
Six Months Ended June 30,
% Change
(Dollars in millions)
2026
2025
2026 vs. 2025
2026
2025
2026 vs. 2025
Income before income taxes
$
1,815
$
1,513
20.0
%
$
3,505
$
3,048
15.0
%
Provision for income taxes
262
273
(4.0)
471
547
(13.9)
Effective tax rate
14.4
%
18.0
%
(360) bps
13.4
%
17.9
%
(450) bps
During 2026, the IRS concluded its examination of the Company’s federal income tax returns for the 2022 tax year, with no material adjustments or impact on the Company’s financial condition or results of operations. The lower effective tax rates for 2026 were driven by renewable energy tax credit investing activity.
Segment Results
Truist operates and measures business activity across two reportable segments: Consumer and Small Business Banking (CSBB) and Wholesale Banking (WB), with functional activities included in Other, Treasury, and Corporate (OT&C). 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. Refer to “Note 16. Operating Segments” for additional information on the Company’s reportable segments.
Table 6: Net Income from Continuing Operations by Reportable Segment
Three Months Ended June 30,
% Change
Six Months Ended June 30,
% Change
(Dollars in millions)
2026
2025
2026 vs. 2025
2026
2025
2026 vs. 2025
Consumer and Small Business Banking
$
835
$
574
45.5
%
$
1,565
$
1,148
36.3
%
Wholesale Banking
960
861
11.5
1,851
1,673
10.6
Other, Treasury & Corporate
(242)
(195)
24.1
(382)
(320)
19.4
Truist Financial Corporation
$
1,553
$
1,240
25.2
$
3,034
$
2,501
21.3
Three Months Ended June 30, 2026 compared to the Three Months Ended June 30, 2025
Consumer and Small Business Banking
CSBB net income was $835 million for the second quarter of 2026, an increase of $261 million compared to the second quarter of 2025.
•Segment net interest income increased $280 million primarily driven by higher deposit spreads on higher deposit balances and lower cost of deposits, partially offset by lower loan spreads.
•The allocated provision for credit losses decreased $77 million, reflecting a reserve build in the prior quarter, partially offset by increased charge-offs.
•Noninterest income increased $11 million primarily due to increases in other deposit revenue.
•Noninterest expense increased $22 million driven by higher lending related expenses.
Truist Financial Corporation 55
CSBB average loans and leases HFI increased $1.8 billion, or 1.4%, for the second quarter of 2026 compared to the second quarter of 2025, primarily due to higher indirect lending in the Service Finance portfolio, increases in unsecured lending, and real estate lending.
CSBB average total deposits increased $3.3 billion, or 1.5%, for the second quarter of 2026 compared to the second quarter of 2025, primarily driven by increases in money market and savings and noninterest-bearing deposits, partially offset by decreases in time deposits and interest checking.
Wholesale Banking
WB net income was $960 million for the second quarter of 2026, an increase of $99 million compared to the second quarter of 2025.
•Segment net interest income decreased $35 million primarily due to lower loan spreads.
•The allocated provision for credit losses decreased $14 million, which reflects a decrease in net charge-offs and a higher net reserve release.
•Noninterest income increased $217 million driven by higher income from investment banking and trading activity, wealth management, and lending related revenue, partially offset by decreased income from certain equity and other investments.
•Noninterest expense increased $55 million primarily due to higher revenue-related incentives.
WB average loans HFI increased $14.8 billion, or 8.2%, for the second quarter of 2026 compared to the second quarter of 2025, primarily due to increases in average commercial and industrial loan balances.
WB average total deposits decreased $2.1 billion, or 1.4%, for the second quarter of 2026 compared to the second quarter of 2025, due to the impact of short-term M&A related deposits in the prior period as well as lower noninterest bearing deposits, partially offset by increases in interest checking.
Other, Treasury & Corporate
OT&C generated a net loss of $242 million in the second quarter of 2026, compared to a net loss of $195 million in the second quarter of 2025.
•OT&C net interest income decreased $211 million primarily due to a decline in interest income on cash balances and securities resulting from lower balances and yields in those portfolios as well as higher inter-segment funding credit on Consumer deposits, partially offset by lower inter-segment funding credit on Wholesale deposits.
•Noninterest income increased $16 million primarily due to the securities losses in the prior quarter due to balance sheet repositioning.
•Noninterest expense was flat primarily due to lower professional fees and outside processing expenses as well as lower employee benefits expense related to rebates received in employee insurance, partially offset by higher incentive compensation and salaries expense driven by higher investments in enterprise technology talent.
Six Months Ended June 30, 2026 compared to the Six Months Ended June 30, 2025
Consumer and Small Business Banking
CSBB net income was $1.6 billion for the six months ended June 30, 2026, an increase of $417 million compared to the prior year.
•Segment net interest income increased $527 million primarily driven by higher deposit spreads, partially offset by lower loan spreads.
•The allocated provision for credit losses decreased $30 million primarily reflecting a decrease in the net reserve build in the current period, partially offset by an increase in net charge-offs.
•Noninterest income increased $36 million primarily due to increased mortgage banking income and other deposit revenue.
•Noninterest expense increased $38 million primarily driven by higher lending related costs and regulatory expenses.
CSBB average loans HFI increased $3.5 billion, or 2.7%, for the six months ended June 30, 2026 compared to the prior year, primarily due to higher indirect lending in the Service Finance and prime auto portfolios, increased real estate lending, and higher unsecured lending.
CSBB average total deposits increased $3.0 billion, or 1.4%, for the six months ended June 30, 2026 compared to the prior year, primarily due to higher average money market and savings and noninterest-bearing deposits, partially offset by lower average interest checking and time deposits.
56 Truist Financial Corporation
Wholesale Banking
WB net income was $1.9 billion for the six months ended June 30, 2026, an increase of $178 million compared to the prior year.
•Segment net interest income decreased $27 million primarily due to lower loan spreads, partially offset by lower cost of deposits.
•The allocated provision for credit losses decreased $41 million, which reflected an increase in the net reserve release compared to the prior period and a decrease in net charge-offs in the current period.
•Noninterest income increased $339 million primarily due to higher income from capital markets and trading activity, wealth management, and lending related revenue, partially offset by lower income from certain strategic investments.
•Noninterest expense increased $101 million primarily due to increased personnel expenses driven by incentives expense.
WB average loans HFI increased $15.1 billion, or 8.4%, for the six months ended June 30, 2026 compared to the prior year, primarily driven by higher balances in the commercial and industrial loan portfolio.
WB average total deposits increased $141 million, or 0.1%, for the six months ended June 30, 2026 compared to the prior year, primarily due to higher average interest-bearing checking balances offsetting declines in short-term M&A related deposits and noninterest bearing deposits.
Other, Treasury, and Corporate
OT&C generated a net loss of $382 million for the six months ended June 30, 2026, compared to a net loss of $320 million in the prior year.
•OT&C net interest income decreased $374 million primarily due to a decline in interest income on cash balances and securities resulting from lower balances and yields in those portfolios as well as higher inter-segment funding credit on Consumer deposits, partially offset by lower inter-segment funding credit on Wholesale deposits.
•Noninterest income increased $30 million primarily due to the securities losses in the prior period from balance sheet repositioning.
•Noninterest expense was flat with higher personnel costs, driven by salaries and incentive compensation due to higher investments in technology talent as well as risk and finance management, offset by lower professional fees and outside processing expenses.
Truist Financial Corporation 57
Analysis of Financial Condition
Investment Activities
The carrying value of the securities portfolio totaled $114.0 billion at June 30, 2026, compared to $112.2 billion at December 31, 2025. U.S. Treasury, GSE, and agency MBS represented 98.6% and 99.7% of the total securities portfolio at June 30, 2026 and December 31, 2025, respectively. The majority of the portfolio is agency MBS.
•The increase in 2026 was driven by purchases of $11.6 billion, partially offset by paydowns, maturities, and sales of $10.2 billion.
•As of June 30, 2026, 39% of the investment securities portfolio at amortized cost was classified as held-to-maturity, excluding portfolio-level basis adjustments associated with certain AFS securities, compared to 41% at December 31, 2025.
•As of June 30, 2026, approximately 4.7% of the securities portfolio was variable rate, excluding the impact of swaps, compared to 3.7% as of December 31, 2025.
•The effective duration of the AFS securities portfolio was 4.3 years at June 30, 2026 and 4.4 years at December 31, 2025, excluding the impact of swaps, or 3.2 years at June 30, 2026 and 2.9 years at December 31, 2025, including the impact of swaps. The effective duration of the HTM securities portfolio was 7.2 years at June 30, 2026, and 7.5 years at December 31, 2025.
Lending Activities
The following table presents the composition of average loans and leases:
Table 7: Average Loans and Leases
Three Months Ended
(Dollars in millions)
Jun 30, 2026
Mar 31, 2026
Dec 31, 2025
Sep 30, 2025
Jun 30, 2025
Commercial:
Commercial and industrial
$
168,817
$
166,636
$
163,990
$
162,207
$
158,491
CRE
24,938
24,165
23,205
21,171
19,687
Commercial construction
7,455
7,845
8,015
8,258
8,613
Consumer:
Residential mortgage
56,342
56,458
57,100
57,676
56,789
Home equity
9,656
9,666
9,679
9,588
9,586
Indirect auto
24,430
25,342
25,639
24,964
24,158
Other consumer
32,661
32,053
32,181
31,714
30,387
Credit card
4,863
4,857
4,956
4,915
4,890
Total average loans and leases HFI
$
329,162
$
327,022
$
324,765
$
320,493
$
312,601
Average loans and leases HFI were $329.2 billion, an increase of $2.1 billion, or 0.7%, compared to the first quarter of 2026.
•Average commercial loans increased 1.3% primarily due to an increase in the commercial and industrial and CRE portfolios.
•Average consumer loans decreased 0.3% primarily due to a decline in the indirect auto portfolio, partially offset by an increase in the other consumer portfolio.
End of period loans and leases HFI were $329.8 billion, up $1.2 billion, or 0.4%, compared to December 31, 2025, primarily due to increases in the CRE, commercial and industrial, and other consumer portfolios, partially offset by a decline in the indirect auto portfolio.
During the second quarter of 2026, we discontinued the origination of certain marine and recreational vehicle loans, and we further reduced originations in less strategic and less profitable consumer lending units such as prime and non-prime auto.
58 Truist Financial Corporation
Asset Quality
The following tables summarize asset quality information:
Table 8: Asset Quality
(Dollars in millions)
Jun 30, 2026
Mar 31, 2026
Dec 31, 2025
Sep 30, 2025
Jun 30, 2025
NPAs:
NPLs:
Commercial and industrial
$
657
$
738
$
839
$
800
$
520
CRE
43
21
47
98
128
Commercial construction
22
23
41
42
1
Residential mortgage
231
231
213
196
191
Home equity
98
101
99
103
107
Indirect auto
569
455
267
247
240
Other consumer
72
73
71
66
64
Total NPLs HFI
1,692
1,642
1,577
1,552
1,251
Loans held for sale
—
79
—
19
12
Total nonperforming loans and leases
1,692
1,721
1,577
1,571
1,263
Foreclosed real estate
5
6
3
4
4
Other foreclosed property
51
58
53
54
49
Total nonperforming assets
$
1,748
$
1,785
$
1,633
$
1,629
$
1,316
Loans 90 days or more past due and still accruing:
Commercial and industrial
$
2
$
4
$
3
$
3
$
2
CRE
3
—
—
—
—
Residential mortgage – government guaranteed
560
609
532
438
424
Residential mortgage – nonguaranteed
33
39
38
41
41
Home equity
8
7
7
6
6
Other consumer
25
26
28
27
24
Credit card
67
75
76
69
49
Total loans 90 days or more past due and still accruing
$
698
$
760
$
684
$
584
$
546
Loans 30-89 days past due and still accruing:
Commercial and industrial
$
142
$
260
$
127
$
73
$
122
CRE
95
42
25
6
34
Commercial construction
—
10
36
5
15
Residential mortgage – government guaranteed
311
263
329
327
330
Residential mortgage – nonguaranteed
354
293
357
344
365
Home equity
52
57
69
54
54
Indirect auto
521
508
679
620
582
Other consumer
232
240
281
241
239
Credit card
67
70
77
73
70
Total loans 30-89 days past due and still accruing
$
1,774
$
1,743
$
1,980
$
1,743
$
1,811
At June 30, 2026 and December 31, 2025, 57% and 56% of loans and leases HFI were variable rate, respectively.
Nonperforming assets totaled $1.7 billion at June 30, 2026, up $115 million compared to December 31, 2025, primarily due to an increase in the indirect auto portfolio, partially offset by a decline in the commercial and industrial portfolio. The increase in indirect auto was driven by an enhancement to nonaccrual criteria for certain loans in that portfolio effective January 1, 2026 to prospectively include accounts in which cumulative payment extensions are at or above 12 months. Nonperforming loans and leases were 0.51% as a percentage of loans and leases HFI, up three basis points compared to December 31, 2025.
Loans 90 days or more past due and still accruing totaled $698 million at June 30, 2026, stable compared to December 31, 2025. Excluding government guaranteed loans, the ratio of loans 90 days or more past due and still accruing was 0.04% as a percentage of loans and leases at June 30, 2026, down one basis point compared to December 31, 2025.
Loans 30-89 days past due and still accruing totaled $1.8 billion at June 30, 2026, down $206 million, or six basis points as a percentage of loans and leases, compared to December 31, 2025.
Truist Financial Corporation 59
The following tables present asset quality metrics. In addition, for the commercial portfolio segment, loans that are rated special mention or substandard performing are closely monitored by management as potential problem loans. Refer to “Note 4. Loans and ACL” for the amortized cost basis of loans by origination year and credit quality indicator as well as additional disclosures related to NPLs.
Table 9: Asset Quality Ratios
Jun 30, 2026
Mar 31, 2026
Dec 31, 2025
Sep 30, 2025
Jun 30, 2025
NPLs as a percentage of loans and leases HFI
0.51
%
0.50
%
0.48
%
0.48
%
0.39
%
NPLs as a percentage of total loans and leases(1)
0.51
0.52
0.48
0.48
0.39
NPAs(1) as a percentage of total assets
0.31
0.33
0.30
0.30
0.24
Nonperforming assets as a percentage of loans and leases plus foreclosed property(1)
0.53
0.52
0.50
0.50
0.41
Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI
0.21
0.23
0.21
0.18
0.17
Loans 90 days or more past due and still accruing as a percentage of loans and leases, excluding government guaranteed loans(2)
0.04
0.05
0.05
0.05
0.04
Loans 30-89 days past due and still accruing as a percentage of loans and leases HFI
0.54
0.53
0.60
0.54
0.57
ALLL as a percentage of loans and leases
1.51
1.53
1.53
1.54
1.54
Ratio of ALLL to nonperforming loans and leases
2.9x
3.1x
3.2x
3.2x
3.9x
(1)Nonperforming assets and total loans and leases include loans held for sale.
(2)This asset quality ratio has been adjusted to remove the impact of government guaranteed loans. Management believes the inclusion of such assets in this asset quality ratio results in distortion of this ratio because collection of principal and interest on government guaranteed loans is reasonably assured.
Table 10: Asset Quality Ratios
Three Months Ended
Jun 30, 2026
Mar 31, 2026
Dec 31, 2025
Sep 30, 2025
Jun 30, 2025
Net charge-offs (recoveries) as a percentage of average loans and leases:
Commercial:
Commercial and industrial
0.27
%
0.31
%
0.29
%
0.19
%
0.22
%
CRE
—
0.06
0.14
0.44
0.71
Commercial construction
(0.01)
0.84
(0.04)
(0.03)
(0.02)
Consumer:
Residential mortgage
—
(0.01)
0.01
—
—
Home equity
0.02
(0.02)
(0.04)
(0.11)
(0.04)
Indirect auto
1.73
2.14
2.10
1.99
1.63
Other consumer
1.63
1.91
1.84
1.55
1.54
Credit card
4.97
5.15
4.64
3.13
4.84
Total net charge-offs (recoveries) as a percentage of average loans and leases
0.50
0.61
0.57
0.48
0.51
Ratio of ALLL to net charge-offs
3.0x
2.5x
2.7x
3.3x
3.1x
Ratios are annualized.
60 Truist Financial Corporation
The following table presents activity related to NPAs:
Table 11: Rollforward of NPAs
(Dollars in millions)
2026
2025
Balance, January 1
$
1,633
$
1,477
New NPAs
1,853
1,594
Advances and principal increases
150
240
Disposals of foreclosed assets(1)
(301)
(303)
Disposals of NPLs(2)
(132)
(243)
Charge-offs and losses
(653)
(619)
Payments
(630)
(692)
Transfers to performing status
(171)
(138)
Other, net
(1)
—
Ending balance, June 30
$
1,748
$
1,316
(1)Includes charge-offs and losses recorded upon sale of $141 million and $130 million for the six months ended June 30, 2026 and 2025, respectively.
(2)Includes gains, net of charge-offs and losses recorded upon sale, of $2 million and $6 million for the six months ended June 30, 2026 and 2025, respectively.
Commercial Credit Concentrations
Truist has established the following general practices to manage commercial credit risk:
•limiting the amount of credit that Truist may extend to a borrower;
•establishing a process for credit approval accountability;
•initial underwriting and analysis of borrower, transaction, market, and collateral risks;
•evaluating the diversity of the loan portfolio in terms of type, industry, and geographical concentration;
•ongoing servicing and monitoring of individual loans and lending relationships;
•continuous monitoring of the portfolio, market dynamics, and the economy; and
•periodically reevaluating the Company’s strategy and overall exposure as economic, market, and other relevant conditions change.
Truist monitors various segments of its credit portfolios to assess potential concentration risks. Management is involved in the credit approval and review process, and risk acceptance criteria are adjusted as needed to reflect the Company’s risk appetite. Consistent with established risk management objectives, the Company utilizes various risk mitigation techniques, including collecting collateral and security interests, obtaining guarantees, and, to a limited extent, through the purchase of credit loss protection via third-party insurance or use of credit derivatives such as credit default swaps.
In the commercial portfolio, risk concentrations are evaluated regularly on both an aggregate portfolio level and on an individual client basis. The Company manages its commercial exposure through portfolio targets, limits, and transactional risk acceptance criteria as well as other techniques, including loan syndications/participations, loan sales, collateral, structure, covenants, and other risk reduction techniques.
The following tables provide industry distribution by major types of commercial credit exposure and the geographical distribution of commercial exposures. Industry classification for commercial and industrial loans is based on the North American Industry Classification System. CRE loans are classified based on type of property. For the geographic disclosures, amounts are generally assigned to a state based on the physical billing address of the client or physical property address.
Truist Financial Corporation 61
Table 12: Commercial and Industrial Portfolio Industry and Geography
June 30, 2026
December 31, 2025
(Dollars in millions)
LHFI
% of Total
NPL
LHFI
% of Total
NPL
Industry:
Finance and insurance
$
32,524
19.3
%
$
6
$
30,464
18.2
%
$
2
Real estate and rental and leasing
14,558
8.6
6
11,993
7.1
1
Manufacturing
14,370
8.5
120
13,418
8.0
91
Retail trade
11,619
6.9
16
11,940
7.1
24
Health care and social assistance
10,663
6.3
18
11,779
7.0
67
Wholesale trade
8,245
4.9
72
7,655
4.6
212
Public administration
7,998
4.7
—
8,658
5.2
2
Information
6,547
3.9
165
7,523
4.5
158
Utilities
6,263
3.7
—
6,582
3.9
—
Professional, scientific, and technical services
5,427
3.2
6
5,043
3.0
5
Educational services
4,629
2.7
—
4,868
2.9
—
Arts, entertainment, and recreation
4,108
2.4
1
4,182
2.5
1
Transportation and warehousing
3,903
2.3
28
4,497
2.7
22
Construction
3,885
2.3
13
3,350
2.0
4
Administrative and support and waste management and remediation services
3,373
2.0
78
3,108
1.9
36
Accommodation and food services
3,017
1.8
21
2,990
1.8
24
Other(1)
10,838
6.5
18
11,903
7.0
115
Subtotal
151,967
90.0
568
149,953
89.4
764
Business owner occupied
16,859
10.0
89
17,855
10.6
75
Total commercial and industrial
$
168,826
100.0
%
$
657
$
167,808
100.0
%
$
839
Geography:
Florida
$
19,133
11.3
%
$
55
$
18,532
11.0
%
$
30
Texas
17,302
10.2
31
17,001
10.1
157
New York
12,772
7.6
200
12,719
7.6
70
California
11,791
7.0
26
12,460
7.4
34
North Carolina
11,767
7.0
10
12,154
7.2
11
Georgia
11,435
6.8
73
11,452
6.8
149
Virginia
9,949
5.9
3
9,061
5.4
3
Maryland
7,566
4.5
11
7,057
4.2
4
Pennsylvania
6,832
4.0
10
6,890
4.1
131
Tennessee
5,892
3.5
46
5,873
3.5
42
New Jersey
4,665
2.8
6
4,743
2.8
5
Illinois
4,179
2.5
34
3,970
2.4
12
South Carolina
3,949
2.3
2
4,213
2.5
4
Ohio
3,385
2.0
36
3,624
2.2
—
Other(2)
38,209
22.6
114
38,059
22.8
187
Total commercial and industrial
$
168,826
100.0
%
$
657
$
167,808
100.0
%
$
839
(1)Represents other remaining industries that are deemed to be individually insignificant.
(2)Represents other remaining states, U.S. territories, and non-U.S. loans that are deemed to be individually insignificant.
The Finance and insurance industry category includes various types of nonbank financial institutions, including asset securitization, securities-based lending, and certain REITs, which together comprise approximately 56% and 59% of Truist’s funded loans within that industry category at June 30, 2026 and December 31, 2025, respectively. Asset securitization facilities are structured to provide funding to clients based on advance rates that are applied to pools of eligible collateral that generally result in over collateralization of the funded exposures. Securities-based lending arrangements are collateralized by marketable securities that are maintained in a restricted account and monitored by Truist on a daily basis to help determine whether the value of the underlying securities collateral complies with the terms of the margin agreement established with the origination of the loan.
62 Truist Financial Corporation
Table 13: CRE Portfolio Property Type and Geography
June 30, 2026
December 31, 2025
(Dollars in millions)
LHFI
% of Total
NPL
LHFI
% of Total
NPL
Industry:
Multifamily
$
8,900
34.9
%
$
33
$
8,055
34.0
%
$
4
Industrial
5,891
23.1
—
5,521
23.3
—
Retail
4,747
18.6
4
4,244
17.9
5
Office
2,345
9.2
5
2,435
10.3
36
Hotel
1,561
6.1
—
1,558
6.6
—
Other(1)
2,035
8.1
1
1,907
7.9
2
Total CRE
$
25,479
100.0
%
$
43
$
23,720
100.0
%
$
47
Geography:
Florida
$
3,229
12.7
%
$
1
$
2,668
11.2
%
$
2
Georgia
2,734
10.7
1
2,586
10.9
1
Texas
2,596
10.2
1
2,411
10.2
1
New York
2,340
9.2
2
2,323
9.8
6
North Carolina
2,106
8.3
2
2,324
9.8
1
California
2,001
7.9
—
1,628
6.9
—
Pennsylvania
1,639
6.4
—
1,566
6.6
—
New Jersey
1,280
5.0
3
1,118
4.7
3
Illinois
1,130
4.4
—
1,178
5.0
13
Maryland
1,058
4.2
1
883
3.7
2
Virginia
958
3.8
—
1,034
4.4
—
Other(2)
4,408
17.2
32
4,001
16.8
18
Total CRE
$
25,479
100.0
%
$
43
$
23,720
100.0
%
$
47
(1)Represents other remaining property types that are deemed to be individually insignificant.
(2)Represents other remaining states, U.S. territories, and non-U.S. loans that are deemed to be individually insignificant.
Table 14: Commercial Construction Portfolio Property Type and Geography
June 30, 2026
December 31, 2025
(Dollars in millions)
LHFI
% of Total
NPL
LHFI
% of Total
NPL
Industry:
Multifamily
$
3,035
41.2
%
$
—
$
3,871
49.7
%
$
—
Industrial
2,326
31.6
—
1,884
24.2
—
Single Family - construction to permanent
1,190
16.1
—
1,070
13.7
—
Single Family - acquisition and development
and commercial land
205
2.8
—
208
2.7
—
Hotel
166
2.3
—
170
2.2
—
Other(1)
450
6.0
22
580
7.5
41
Total commercial construction
$
7,372
100.0
%
$
22
$
7,783
100.0
%
$
41
Geography:
Florida
$
1,199
16.3
$
—
$
1,453
18.7
$
—
Georgia
971
13.2
—
1,188
15.3
—
Texas
937
12.7
—
1,088
14.0
—
North Carolina
713
9.7
—
748
9.6
—
California
619
8.4
—
431
5.5
—
Other(2)
2,933
39.7
22
2,875
36.9
41
Total commercial construction
$
7,372
100.0
%
$
22
$7,783
100.0
%
$
41
(1)Represents other remaining property types that are deemed to be individually insignificant.
(2)Represents other remaining states, U.S. territories, and non-U.S. loans that are deemed to be individually insignificant.
Refer to “Note 4. Loans and ACL” for additional information on the commercial portfolios, including loans by origination year and credit quality indicator.
Truist Financial Corporation 63
ACL
Activity related to the ACL is presented in the following tables:
Table 15: Activity in ACL
Three Months Ended
(Dollars in millions)
Jun 30, 2026
Mar 31, 2026
Dec 31, 2025
Sep 30, 2025
Jun 30, 2025
Balance, beginning of period
$
5,335
$
5,347
$
5,305
$
5,253
$
5,166
Provision for credit losses
395
479
512
436
488
Charge-offs:
Commercial and industrial
(137)
(142)
(141)
(98)
(120)
CRE
(1)
(7)
(14)
(25)
(38)
Commercial construction
(1)
(17)
—
—
—
Residential mortgage
(1)
(1)
(3)
(1)
(1)
Home equity
(3)
(3)
(2)
(2)
(4)
Indirect auto
(135)
(158)
(160)
(150)
(127)
Other consumer
(168)
(184)
(178)
(155)
(146)
Credit card
(70)
(71)
(67)
(49)
(70)
Total charge-offs
(516)
(583)
(565)
(480)
(506)
Recoveries:
Commercial and industrial
22
16
23
20
31
CRE
1
3
6
2
3
Commercial construction
1
1
1
—
1
Residential mortgage
1
2
1
2
—
Home equity
3
3
3
5
4
Indirect auto
29
25
24
25
28
Other consumer
35
33
28
31
31
Credit card
10
9
9
10
12
Total recoveries
102
92
95
95
110
Net charge-offs
(414)
(491)
(470)
(385)
(396)
Other
—
—
—
1
(5)
Balance, end of period
$
5,316
$
5,335
$
5,347
$
5,305
$
5,253
ACL:
ALLL
$
4,983
$
5,026
$
5,030
$
4,988
$
4,899
RUFC
333
309
317
317
354
Total ACL
$
5,316
$
5,335
$
5,347
$
5,305
$
5,253
The ACL was $5.3 billion at June 30, 2026, and included $5.0 billion for the ALLL and $333 million for the RUFC. The ALLL as a percentage of loans and leases HFI at June 30, 2026 was 1.51%, down two basis points compared to March 31, 2026. The ALLL covered nonperforming loans and leases HFI 2.9x at June 30, 2026, compared to 3.1x at March 31, 2026. For the three months ended June 30, 2026, the ALLL was 3.0x annualized net charge-offs, compared to 3.1x for the three months ended June 30, 2025.
64 Truist Financial Corporation
The following table presents an allocation of the ALLL. The entire amount of the allowance is available to absorb losses occurring in any category of loans and leases.
Table 16: Allocation of ALLL by Category
June 30, 2026
December 31, 2025
(Dollars in millions)
Amount
% ALLL in Each Category
% Loans in Each Category
Amount
% ALLL in Each Category
% Loans in Each Category
Commercial and industrial
$
1,440
28.9
%
51.2
%
$
1,326
26.3
%
51.0
%
CRE
422
8.5
7.7
476
9.5
7.2
Commercial construction
151
3.0
2.2
246
4.9
2.4
Residential mortgage
173
3.5
17.2
198
3.9
17.3
Home equity
76
1.5
2.9
84
1.7
3.0
Indirect auto
1,034
20.8
7.2
1,036
20.6
7.8
Other consumer
1,283
25.7
10.1
1,238
24.6
9.8
Credit card
404
8.1
1.5
426
8.5
1.5
Total ALLL
4,983
100.0
%
100.0
%
5,030
100.0
%
100.0
%
RUFC
333
317
Total ACL
$
5,316
$
5,347
Other Assets
The components of other assets are presented in the following table:
Table 17: Other Assets as of Period End
(Dollars in millions)
Jun 30, 2026
Dec 31, 2025
Tax credit and other private equity investments
$
10,806
$
9,882
Bank-owned life insurance
8,628
8,515
Pension assets, net
8,089
7,920
Accrued income
1,963
2,028
DTA
1,787
1,507
Accounts receivable
1,670
1,624
Derivative assets
1,455
1,343
FHLB stock
1,340
1,521
Prepaid expenses
1,179
1,075
Leased assets and related assets
1,044
1,359
ROU assets
995
1,045
Other
1,043
1,151
Total other assets
$
39,999
$
38,970
Truist Financial Corporation 65
Funding Activities
Deposits
The following table presents average deposits:
Table 18: Average Deposits
Three Months Ended
(Dollars in millions)
Jun 30, 2026
Mar 31, 2026
Dec 31, 2025
Sep 30, 2025
Jun 30, 2025
Noninterest-bearing deposits
$
103,620
$
103,371
$
105,552
$
105,751
$
106,686
Interest checking
123,556
120,110
112,313
109,244
116,193
Money market and savings
136,423
136,106
138,114
136,515
135,607
Time deposits
41,270
39,337
40,031
45,090
41,997
Total average deposits
$
404,869
$
398,924
$
396,010
$
396,600
$
400,483
Average deposits for the second quarter of 2026 were $404.9 billion, up $5.9 billion, or 1.5%, compared to the first quarter of 2026, driven by an increase in interest checking. Average noninterest-bearing deposits increased 0.2% compared to the first quarter of 2026 and represented 25.6% of total deposits for the second quarter of 2026 and 25.9% for the first quarter of 2026.
End of period deposits were $409.4 billion, up $9.0 billion, or 2.2%, compared to December 31, 2025, primarily due to an increase in interest checking deposits and time deposits, partially offset by a decline in money market and savings.
Borrowings
At June 30, 2026, short-term borrowings totaled $26.9 billion, a decrease of $954 million compared to December 31, 2025.
Long-term debt provides funding and, to a lesser extent, regulatory capital, and primarily consists of senior and subordinated notes issued by the Parent Company and Truist Bank. Long-term debt totaled $43.0 billion at June 30, 2026, an increase of $1.0 billion compared to December 31, 2025. During the six months ended June 30, 2026, the Company had:
•Issuances of $5.2 billion of primarily fixed-to-floating rate senior notes with a weighted average interest rate of 4.75% due between January 27, 2029 and April 23, 2037 and $350 million of floating rate senior notes due January 27, 2029.
•Net issuances of $700 million of floating rate FHLB advances.
•Maturities and redemptions of $4.1 billion of senior notes.
In July 2026, the Parent Company issued $1.3 billion principal amount of fixed-to-floating rate senior notes with an interest rate of 4.96% due July 23, 2030.
Refer to “Note 8. Borrowings” for additional information on short-term borrowings and long-term debt.
Shareholders’ Equity
Total shareholders’ equity was $64.1 billion at June 30, 2026, a decrease of $1.1 billion from December 31, 2025. This decrease reflected $2.4 billion in common share repurchases, $1.4 billion in common and preferred dividends, and a $947 million decrease in AOCI, partially offset by $3.0 billion in net income and $495 million for the issuance of Series S non-cumulative perpetual preferred stock with a stated dividend rate of 6.25% per annum. Truist’s book value per common share at June 30, 2026 was $48.04, compared to $47.74 at December 31, 2025. Truist’s TBVPS was $33.40 at June 30, 2026, compared to $33.48 at December 31, 2025.
66 Truist Financial Corporation
Risk Management
Truist seeks to maintain a comprehensive risk management framework supported by people, processes, and systems designed to identify, assess, measure, monitor, control, mitigate, govern, and report on risks arising from exposures and business activities. Truist has developed a risk taxonomy to provide for the identification, measurement, and reporting of primary risk types and classification of risk elements at Truist. Primary risk types are defined across eight categories including credit, market, liquidity, strategic, operational, technology, compliance, and financial crimes. See Item 1, “Business”, Item 1A, “Risk Factors”, and the “Risk Management” section of MD&A in Truist’s Annual Report on Form 10-K for the year ended December 31, 2025 for additional information regarding these primary risk types.
Truist has established an enterprise risk management framework to enable the execution of strategic goals and objectives in alignment with its risk appetite.
Truist is committed to fostering a culture that prioritizes and supports the identification and escalation of risks across the organization. All teammates are responsible for upholding the Company’s purpose, mission, and values, and are encouraged to speak up if there is any activity or behavior that is inconsistent with the Company’s culture. The Truist Code of Ethics influences the Company’s decision making and informs teammates on how to act in the absence of specific guidance.
Truist seeks an appropriate return for the risk taken in its business operations. Risk-taking activities must be evaluated and prioritized to identify those that are within the Company’s risk appetite and present attractive risk-adjusted returns, while preserving asset value and capital.
Market Risk
Market risk is the risk to current or anticipated earnings, capital, or economic value arising from changes in interest rates, spreads, or prices of financial instruments, and the corresponding impact on the composition of the balance sheet or trading and fair value positions. Market risk results from changes in the level, volatility, or correlations among financial market risk factors or prices, including interest rates, credit spreads, foreign exchange rates, equity, and commodity prices.
Truist’s most significant market risk exposure is to interest rate risk in its balance sheet. However, market risk also results from underlying product liquidity risk, price risk, and volatility risk of instruments held in Truist’s business units. Interest rate risk results from:
•differences between the timing of rate changes and the timing of cash flows associated with assets and liabilities (re-pricing risk);
•changing rate relationships among different yield curves affecting bank activities (basis risk);
•changing rate relationships across the spectrum of maturities (yield curve risk); and
•interest-related options inherently embedded in bank products (options risk).
The primary objectives of market risk management are to minimize adverse effects from changes in market risk factors on net interest income, net income, and capital, and to offset the risk of price changes for certain assets and liabilities recorded at fair value. At Truist, market risk management also includes the enterprise-wide IPV function.
Market Risk - Interest Rate
As a financial institution, Truist is exposed to interest rate risk from assets, liabilities, and off-balance sheet positions. Truist primarily monitors this risk through two measurement types, (i) NII at risk and (ii) economic value of equity. Truist manages this interest rate risk with securities, derivatives, and broader asset liability management activities. Truist uses derivatives to hedge interest income variability of floating rate loans and to hedge valuation changes of long-term debt and investment securities.
Corporate Treasury is responsible for the management of Truist’s IRR position as part of an integrated balance sheet management strategy. The TMRO team within the RMO monitors Corporate Treasury’s execution of these responsibilities. The ALCO and the BRC approve the policies governing interest rate management and, along with the ERC, receive periodic updates. IRR measurement is reported monthly through the ALCO. Monthly IRR reporting includes exposure and historical trends relative to risk limit scenarios, impacts to a wide range of rate scenarios, and sensitivity tests of key assumptions. IRR reporting is provided to the BRC quarterly.
Truist Financial Corporation 67
IRR measurement is influenced by data, assumptions, and models. Due to their high sensitivity to market rates, mortgage (loan and security) prepayments leverage an industry model that results in varying prepayment speeds across rate scenarios. Prepayments for non-mortgage loans leverage a mix of dynamic models (varying results based on market rates) and static prepayment assumptions based on historical experience. Truist’s analysis incorporates dynamic client deposit balance levels, the mix across product types, and deposit rate paid across alternate rate scenarios based on modeled changes in client and bank behavior. The use of dynamic deposit balance models results in rotation to higher cost funding products (e.g., CDs) when market rates increase and to lower cost funding products (e.g., non-maturity deposits) when market rates decrease. The use of dynamic rate paid models results in varying deposit betas based on the timing and conditions within market rate cycles.
NII at risk measures the change in NII under alternate interest rate scenarios relative to Truist’s baseline scenario, which incorporates Truist’s current balance sheet and off-balance sheet hedges as well as expectations for new business over the forecast horizon. Truist’s baseline scenario relies on assumptions including expectations of the economy and interest rates – which are influenced by market conditions, new business volume, pricing, and client behavior. In measuring NII at risk, Truist assumes that changes in key factors, such as prepayments and deposit pricing (betas), largely move in line with those Truist has experienced in prior rate cycles. However, future behavior of key factors may vary from Truist’s assumptions. NII at risk measurement assumes, when applicable, that U.S. interest rates floor at zero and Truist does not take any balance sheet or hedging actions in response to the rate scenarios.
Truist evaluates a wide range of alternate scenarios including instantaneous and gradual as well as parallel and non-parallel changes in interest rates. The table below presents the estimated change to NII over the following 12 months for select parallel alternate scenarios, expressed as a percentage change relative to baseline NII.
Table 19: Interest Sensitivity Simulation Analysis
Jun 30, 2026
Dec 31, 2025
Up 200bps gradual change in interest rates
(0.2)
%
(0.9)
%
Up 50bps instantaneous change in interest rates
(0.1)
(0.1)
Down 50bps instantaneous change in interest rates
(0.2)
(0.2)
Down 200bps gradual change in interest rates
(1.2)
(0.3)
Truist performs and monitors sensitivity tests of key assumptions used in NII risk including:
•Asset prepayment speeds
•New loan volume pricing spreads
•Interest-bearing deposit betas
•Non-interest-bearing demand deposit balance runoff, replaced by market funding
EVE measures changes in the economic value of Truist’s current balance sheet and off-balance sheet hedges under alternate rate scenarios relative to starting economic value. Truist uses EVE as a longer-term measure of interest rate risk. Truist performs and monitors sensitivity tests of key assumptions used in EVE including:
•Asset prepayment speeds
•Mortgage spreads (mortgage loan and security valuations)
•Interest-bearing deposit beta
•Deposit runoff / decay
Key assumption tests are generally performed by increasing and decreasing the assumption, whether static or dynamically modeled, relative to their respective starting values and then measuring the resulting impact to NII and EVE under baseline and alternate rate scenarios.
The identification and testing of key assumptions are influenced by market conditions and management’s views on key risks. The results of key assumption sensitivity tests are reported to the ALCO and the BRC at least quarterly. Key assumptions and their associated sensitivity tests are reviewed with the ALCO and the BRC at least annually.
68 Truist Financial Corporation
Market Risk - Trading Activities
As a financial intermediary, Truist provides its clients access to derivatives, foreign exchange, and securities markets, which generate market risks. Trading market risk is managed using a multi-faceted risk management approach, which includes measuring risk using VaR, stress testing, and sensitivity analysis. Risk metrics are monitored against a suite of limits at both the trading desk level and at the aggregate portfolio level.
Truist is also subject to risk-based capital guidelines for market risk under the Market Risk Rule. The Capital Markets Risk Management team within the RMO selects, calibrates, and monitors compliance with key risk indicators and other risk measures designed to establish risk-taking parameters for the trading desks within WB. The Capital Markets Risk Committee, ERC, and BRC establish policies governing trading activities and receive regular updates to support the oversight of those activities.
Covered Trading Positions
Covered positions subject to the Market Risk Rule include trading assets and liabilities, specifically those held for the purpose of short-term resale or with the intent of benefiting from actual or expected short-term price movements or to lock in arbitrage profits. Truist’s trading portfolio of covered positions results primarily from market making and underwriting services for the Company’s clients, as well as associated risk mitigating hedging activity. The trading portfolio, measured in terms of VaR, consists primarily of four sub-portfolios of covered positions: (i) credit trading, (ii) fixed income securities, (iii) interest rate derivatives, and (iv) equity derivatives. As a market maker across different asset classes, Truist’s trading portfolio also contains other sub-portfolios, including foreign exchange, loan trading, and commodity derivatives; however, these portfolios do not generate material trading risk exposures.
Valuation policies and methodologies exist for all trading positions. Additionally, these positions are subject to independent price verification. Refer to the “Critical Accounting Estimates” section in MD&A, “Note 13. Fair Value Disclosures,” and “Note 14. Derivative Financial Instruments” for discussion of valuation policies and methodologies.
Securitizations
As of June 30, 2026, the aggregate market value of on-balance sheet securitization positions subject to the Market Risk Rule, which were non-agency asset backed securities positions, was $140 million. Consistent with the Market Risk Rule requirements, the Company performs pre-purchase due diligence on each securitization position to identify the characteristics, including deal structure and the asset quality of the underlying assets, that materially affect valuation and performance. Securitization positions are subject to Truist’s risk management framework, which includes daily monitoring against a suite of limits. There were no off-balance sheet securitization positions during the reporting period.
Correlation Trading Positions
The trading portfolio of covered positions did not contain any correlation trading positions as of June 30, 2026.
VaR-Based Measures
VaR measures the potential loss of a given position or portfolio of positions at a specified confidence level and time horizon. Truist utilizes a historical VaR methodology to measure and aggregate risks across its covered trading positions. The VaR calculation is based on a historical simulation approach and measures the potential trading losses using a one-day holding period at a one-tail, 99% confidence level. For Market Risk Rule purposes, the Company calculates VaR using a 10-day holding period and a 99% confidence level. Due to inherent limitations of the VaR methodology, such as the assumption that past market behavior is indicative of future market performance, VaR is only one of several tools we use to measure and manage market risk. Other tools used to manage market risk include stress testing, scenario analysis, and stop loss limits.
Truist Financial Corporation 69
The trading portfolio’s VaR profile is influenced by a variety of factors, including the size and composition of the portfolio, market volatility, and the correlation between different positions. A portfolio of trading positions is typically less risky than the sum of the risk from each of the individual sub-portfolios, because, under normal market conditions, risk within each category partially offsets the exposure to other risk categories. The following table summarizes certain VaR-based measures for the three and six months ended June 30, 2026 and 2025. Average VaR measures in the six months ended June 30, 2026 were lower compared to the six months ended June 30, 2025, due to lower risk positions.
Table 20: VaR-based Measures
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
(Dollars in millions)
10-Day Holding Period
1-Day Holding Period
10-Day Holding Period
1-Day Holding Period
10-Day Holding Period
1-Day Holding Period
10-Day Holding Period
1-Day Holding Period
VaR-based Measures:
Maximum
$
13
$
5
$
63
$
13
$
25
$
7
$
63
$
15
Average
8
4
28
10
11
5
24
9
Minimum
5
3
16
5
5
3
9
4
Period-end
10
4
23
11
10
4
23
11
VaR by Risk Class:
Interest Rate Risk
2
6
2
6
Credit Spread Risk
2
6
2
6
Equity Price Risk
3
7
3
7
Foreign Exchange Risk
1
1
1
1
Portfolio Diversification
(4)
(8)
(4)
(8)
Period-end
4
11
4
11
Stressed VaR-based measures
Stressed VaR, another component of market risk capital, is calculated using the same internal models as used for the VaR-based measure. Stressed VaR is calculated over a ten-day holding period at a one-tail, 99% confidence level and employs a historical simulation approach based on a continuous twelve-month historical window selected to reflect a period of significant financial stress for the Company’s trading portfolio. The following table summarizes Stressed VaR-based measures:
Table 21: Stressed VaR-based Measures - 10 Day Holding Period
Three Months Ended June 30,
Six Months Ended June 30,
(Dollars in millions)
2026
2025
2026
2025
Maximum
$
46
$
248
$
85
$
287
Average
24
125
32
153
Minimum
11
70
11
70
Period-end
45
96
45
96
Specific Risk Measures
Specific risk is a measure of idiosyncratic risk that could result from risk factors other than broad market movements (e.g., default or event risks). The Market Risk Rule provides fixed risk weights under a standardized measurement method while also allowing a model-based approach, subject to regulatory approval. Truist utilizes the standardized measurement method to calculate the specific risk component of market risk regulatory capital. As such, incremental risk capital requirements do not apply.
70 Truist Financial Corporation
VaR Model Backtesting
In accordance with the Market Risk Rule, the Company evaluates the accuracy of its VaR model through daily backtesting by comparing aggregate daily trading gains and losses (excluding fees, commissions, reserves, net interest income, and intraday trading) from covered positions with the corresponding daily VaR-based measures generated by the model. The total number of Company-wide VaR backtesting exceptions over the preceding twelve months is used to determine the multiplication factor for the VaR-based capital requirement under the Market Risk Rule. The capital multiplication factor increases from a minimum of three to a maximum of four, depending on the number of exceptions. All Company-wide VaR backtesting exceptions are reviewed in the context of VaR model use and performance. There was no change in the capital multiplication factor over the preceding twelve months.
Model Risk Oversight
The MRO is responsible for the independent model validation of all decision models, including trading market risk models. As part of ongoing monitoring efforts, the performance of all trading risk models is reviewed regularly to evaluate model performance with emerging developments in financial markets, assess evolving modeling approaches, and identify potential model enhancements.
Stress Testing
The Company uses a range of stress testing techniques to help monitor risks across trading desks and to augment standard daily VaR and other risk limits reporting. The stress testing framework is designed to quantify the impact of extreme, but plausible, stress scenarios that could lead to large, unexpected losses. Stress tests include simulations for risk factor sensitivities, historical repeats, and hypothetical scenarios with varying liquidity horizons of key risk factors. All trading positions within each applicable market risk category (i.e., interest rate risk, equity risk, foreign exchange rate risk, credit spread risk, and commodity price risk) are included in the Company’s stress testing framework. Management reviews stress testing scenarios and makes updates on an ongoing basis. Management also utilizes stress analyses to support the Company’s capital adequacy assessment standards. Refer to the “Capital” section in MD&A for additional discussion of capital adequacy.
Truist Financial Corporation 71
Liquidity
Liquidity is the ability to fund increases in assets and meet obligations as they come due, all without incurring unacceptable costs. In addition to the level of liquid assets, such as cash, cash equivalents, and highly liquid unencumbered securities, other factors affect the ability to meet liquidity needs, including access to a variety of funding sources, maintaining borrowing capacity, growing core deposits, loan repayment, and the ability to securitize or package loans for sale.
Truist has a liquidity risk management process designed to identify, measure, and monitor key liquidity risks to assess whether Truist is operating within its liquidity risk appetite. The liquidity risk appetite is outlined using a qualitative statement and more granular detailed risk appetite statements aligned to Truist’s risk taxonomy. Risk statements form the basis for aligning risk appetite with risk management goals and strategy. Using the risk appetite statements, key risk indicators are developed that represent quantitative metrics which measure current risk exposure relative to Truist’s risk appetite, which help the Board oversee and management monitor liquidity risk-taking activity. Truist’s key risk indicators are designed to support the following objectives:
•maintain (i) a diversified, but client deposit centric, funding base, (ii) a level of liquid, readily monetized assets sufficient to satisfy business as usual and stressed cash flow needs across multiple liquidity horizons, and (iii) an appropriate level of contingent funding to meet any unexpected needs;
•limit concentration risk from individual, correlated counterparties and funding concentrations in tenors that may negatively impact Truist from an unforeseen idiosyncratic or market event; and
•maintain sufficient liquidity in the holding company to serve as a source of strength to its subsidiaries.
Internal Liquidity Stress Testing
Liquidity stress testing is conducted for Truist and Truist Bank using a variety of institution-specific and market-wide adverse scenarios. Each liquidity stress test scenario applies defined assumptions to execute sources and uses of liquidity over varying planning horizons. The types of expected liquidity uses during a stressed event may include deposit attrition, contractual maturities, reductions in unsecured and secured funding, increased draws on unfunded commitments, and the potential need to post additional collateral for derivatives. To mitigate liquidity outflows, Truist has identified sources of liquidity; however, access to these sources of liquidity could be affected within a stressed environment.
Truist maintains a liquidity buffer of cash on hand and highly liquid unencumbered securities that is designed to meet the projected 30-day net stressed cash-flow needs. Truist’s liquidity buffer is substantially the same in composition to what qualifies as HQLA under the LCR rule. Truist periodically monetizes a representative sample of the liquidity buffer to assess operational readiness through available monetization channels.
Contingency Funding Plan
Truist has a contingency funding plan designed to address ongoing obligations and commitments, particularly in the event of a liquidity contraction. This plan is designed to examine and quantify the organization’s liquidity under the various internal liquidity stress scenarios and is periodically tested to assess the plan’s reliability. Additionally, the plan provides a framework for management and other teammates to follow in the event of a liquidity contraction or in anticipation of such an event. The plan addresses authority for activation and decision making, liquidity options, and the responsibilities of key departments in the event of a liquidity contraction. On a quarterly basis, Truist conducts testing of market access for alternative sources of funds (e.g., FRB, discount window, standing repo facility, etc.) to test operational readiness.
On a periodic basis, Truist conducts a tabletop test of the Contingency Funding Plan to assess reliability of the plan during liquidity stress events and to simulate the operational elements of the plan such as communications, coordination, and decision-making.
LCR, NSFR, and HQLA
The LCR rule requires that Truist and Truist Bank maintain an amount of eligible HQLA that is sufficient within the parameters of the rule to meet their estimated total net cash outflows over a prospective 30 calendar-day period of stress. Eligible HQLA, for purposes of calculating the LCR, is the amount of unencumbered HQLA that satisfies operational requirements of the LCR rule. Truist and Truist Bank are subject to the Category III reduced LCR requirements. For the three months ended June 30, 2026, Truist held average weighted eligible HQLA of $92.8 billion, and Truist’s average LCR was 113%, which exceeded the regulatory minimum of 100%.
The NSFR rule defines a minimum amount of stable, long-term funding that Truist and Truist Bank must maintain in relation to their asset composition and off-balance sheet activities. Truist and Truist Bank are subject to the Category III reduced NSFR requirements. At June 30, 2026, Truist was compliant with this requirement.
72 Truist Financial Corporation
Sources of Funds
Truist funds its balance sheet through diverse sources of funding, including client deposits, secured and unsecured capital markets funding, and shareholders’ equity. Truist Bank’s primary source of funding is client deposits. Continued access to client deposits is highly dependent on public confidence in the stability of Truist Bank and its ability to return funds to clients when requested.
Truist Bank maintains a number of diverse funding sources to meet its liquidity requirements. These sources include unsecured borrowings from the capital markets through the issuance of senior or subordinated bank notes, institutional CDs, overnight and term Federal funds markets, and retail brokered CDs. Truist Bank also maintains access to secured borrowing sources, including FHLB advances, repurchase agreements, and the Federal Reserve discount window. Available investment securities could be pledged to create additional secured borrowing capacity. The following table presents a summary of Truist Bank’s available secured borrowing capacity and eligible cash at the Federal Reserve:
Table 22: Selected Liquidity Sources
(Dollars in millions)
Jun 30, 2026
Dec 31, 2025
Unused borrowing capacity:
Federal Reserve
$
81,004
$
84,160
FHLB
27,491
23,464
Available investment securities (at fair value)
71,564
70,150
Available secured borrowing capacity
180,059
177,774
Eligible cash at the Federal Reserve
32,042
29,973
Total
$
212,101
$
207,747
At June 30, 2026, Truist Bank’s available secured borrowing capacity represented approximately 4.8 times the amount of wholesale funding maturities in one year or less.
Parent Company
The Parent Company serves as the primary source of capital for its operating subsidiaries. The Parent Company’s assets consist primarily of cash on deposit with Truist Bank, equity investments in subsidiaries, and advances to subsidiaries, including notes receivable from subsidiaries. The principal obligations of the Parent Company are payments on long-term debt. The main sources of funds for the Parent Company are dividends and management fees from subsidiaries, repayments of advances to subsidiaries, and proceeds from the issuance of equity and long-term debt. The primary uses of funds by the Parent Company are investments in subsidiaries, advances to subsidiaries, dividend payments to common and preferred shareholders, repurchases of common stock, payments on and, from time to time, potential repurchases or redemptions of a portion of an outstanding tranche of long-term debt of the Parent Company (as may be permitted by the terms of each respective series), and the redemption of preferred stock.
Refer to “Note 22. Parent Company Financial Information” in Truist’s Annual Report on Form 10-K for the year ended December 31, 2025 for additional information regarding dividends from subsidiaries and debt transactions.
Access to funding at the Parent Company is more sensitive to market disruptions. Therefore, Truist manages cash levels at the Parent Company to exceed a minimum of 12 months of projected cash outflows. In determining the buffer, Truist considers cash requirements for common and preferred dividends, unfunded commitments to affiliates, serving as a source of strength to Truist Bank and the Parent Company’s other subsidiaries, and being able to withstand sustained market disruptions that could limit access to the capital markets. At June 30, 2026, the Parent Company held cash on hand to meet these requirements.
Credit Ratings
Credit ratings are forward-looking opinions of rating agencies as to the Company’s ability to meet its financial commitments and repay its securities and obligations in accordance with their terms of issuance. Credit ratings influence both borrowing costs and access to the capital markets. The Company’s credit ratings are continuously monitored by the rating agencies and are subject to change at any time. As Truist seeks to maintain high quality credit ratings, management meets with the major rating agencies on a regular basis to provide financial and business updates and to discuss current outlooks and trends.
Truist Financial Corporation 73
The following table presents the credit ratings and outlooks of the Parent Company and Truist Bank as of June 30, 2026:
Table 23: Credit Ratings of Truist Financial Corporation and Truist Bank
S&P
Moody’s
Fitch
DBRS Morningstar
Truist Financial Corporation:
Issuer
A- / A-2
Baa1
A / F1
AAL / R-1M
Senior unsecured
A-
Baa1
A-
AAL
Subordinated
BBB+
Baa1
BBB+
AH
Preferred stock
BBB-
Baa3(hyb)
BBB-
AL
Truist Bank:
Issuer
A / A-1
A3
A / F1
AA / R-1H
Senior unsecured
A
A3
A
AA
Deposits
NA
A1 / P-1
AA- / F1+
AA
Subordinated
A-
A3
A-
AAL
Ratings outlook:
Credit trend
Stable
Stable
Stable
Stable
Capital
The maintenance of appropriate levels of capital is a management priority and is monitored on a regular basis. Truist’s principal goals related to the maintenance of capital are to provide adequate capital to support Truist’s risk profile consistent with the Board-approved risk appetite; provide financial flexibility to support future growth and client needs; comply with relevant laws, regulations, and supervisory guidance; achieve optimal credit ratings for Truist; for the Parent Company to remain a source of strength for the Parent Company’s subsidiaries; and provide a competitive return to shareholders. Risk-based capital ratios, which include CET1 capital, Tier 1 capital, and Total capital, are calculated based on regulatory guidance related to the measurement of capital and risk-weighted assets.
Management regularly monitors the capital position of Truist on both a consolidated and bank-level basis. In this regard, management’s objective is to maintain capital at levels that are in excess of internal capital limits, which are above the regulatory “well-capitalized” minimums. Truist also regularly performs stress testing on its capital levels and is required to periodically submit the Company’s capital plans and stress testing results to the banking regulators. Management has implemented internal stress capital ratio limits and evaluates whether capital ratios calculated under hypothetical stress scenarios, and after the effect of alternative capital actions, exceed these thresholds. Breaches of internal capital limits, or projected breaches of internal stress capital ratio minimums under hypothetical stress, result in the activation of Truist’s capital contingency plan.
Table 24: Capital Requirements
Minimum Capital
Well-Capitalized
Minimum Capital Plus Stress Capital Buffer(1)
Truist
Truist Bank
CET1
4.5
%
NA
6.5
%
7.0
%
Tier 1 capital
6.0
6.0
%
8.0
8.5
Total capital
8.0
10.0
10.0
10.5
Leverage ratio
4.0
NA
5.0
NA
Supplementary leverage ratio
3.0
NA
NA
NA
(1)Reflects an SCB requirement of 2.5% applicable to Truist as of June 30, 2026. Truist’s SCB requirement, received in the 2025 CCAR process, is effective from October 1, 2025 to September 30, 2027.
The Parent Company’s capital ratios are presented in the following table:
Table 25: Capital Ratios - Truist Financial Corporation
(Dollars in millions)
Jun 30, 2026
Dec 31, 2025
Risk-based:
(preliminary)
CET1
10.9
%
10.8
%
Tier 1 capital
12.2
11.9
Total capital
14.0
13.8
Leverage ratio
9.8
10.0
Supplementary leverage ratio
8.2
8.3
Risk-weighted assets
$
434,799
$
443,257
74 Truist Financial Corporation
Capital Contingency Plan
In the event of a realized or potential capital shortfall, Truist has a capital contingency plan that is designed to facilitate improvement of the Company’s capital position through the execution of specific contingency actions which either increase capital, decrease risk-weighted assets, or both. The plan provides a framework designed to monitor for the occurrence of these events by establishing mechanisms to detect capital contraction, including market and economic stress that could adversely impact the Company’s capital position. The plan also establishes governance protocols for activation or deactivation and decision making, lists capital contingency options and associated key information, and addresses the responsibilities of key departments.
Capital ratios remain strong relative to the regulatory requirements for well-capitalized banks. Truist’s CET1 ratio was 10.9% as of June 30, 2026, up 10 basis points compared to December 31, 2025, primarily due to current quarter earnings and a reduction in risk-weighted assets, partially offset by capital returned to shareholders.
Truist declared common dividends of $0.52 per share during the second quarter of 2026 and repurchased $1.2 billion of common stock. The dividend and total payout ratios for the second quarter of 2026 were 42% and 121%, respectively.
Share Repurchase Activity
Table 26: Share Repurchase Activity
(Dollars in millions, except per share data, shares in thousands)
Total Number of Shares Purchased(1)
Average Price Paid Per Share(2)(3)
Total Number of Shares Purchased as part of Publicly Announced Plans
Approximate Dollar Value of Shares that may yet be Purchased Under the Plans(3)(4)
April 1, 2026 to April 30, 2026
23,499
$
49.04
23,499
$
7,714
May 1, 2026 to May 31, 2026
927
51.25
927
7,666
June 1, 2026 to June 30, 2026
—
—
—
7,666
Total
24,426
$
49.13
24,426
(1)Includes shares exchanged or surrendered in connection with the exercise of equity-based awards under equity-based compensation plans.
(2)Excludes commissions.
(3)Excludes excise taxes on share repurchases.
(4)In December 2025, Truist announced that the Board had authorized the repurchase of up to $10.0 billion of common stock effective immediately with no expiration date, replacing the previous repurchase authority from June 2024, as part of Truist’s overall capital distribution strategy. Repurchased shares revert to the status of authorized and unissued shares upon repurchase. The share-repurchase program enables Truist to acquire shares through open-market purchases or privately negotiated transactions, including through Rule 10b5-1 plans and other programs, at the discretion of management and on terms (including quantity, timing, and price) that management determines to be advisable. Actions in connection with the share-repurchase program are subject to various factors, including Truist's capital and liquidity positions and related internal frameworks, accounting and regulatory considerations (including any changes to capital, liquidity, and other regulatory requirements that may be proposed or adopted by the U.S. banking agencies), Truist's financial and operational performance, alternative uses of capital, the trading price of Truist's common stock, and general market conditions. The share-repurchase program does not obligate Truist to acquire a specific dollar amount or number of shares and may be extended, modified, or discontinued at any time.
Truist Financial Corporation 75
Regulatory and Supervisory Update
We are subject to an extensive regulatory framework that affects the products and services that we may offer and the manner in which we may offer them, the risks that we may take, the ways in which we may operate, and the corporate and financial actions that we may take, including our ability to make distributions to shareholders.
The description below summarizes updates to the regulatory and supervisory framework applicable to Truist since the filing of the Annual Report on Form 10-K for the year ended December 31, 2025. This update does not summarize all actual, proposed, or possible changes in statutes, regulations, and other laws applicable to Truist and is not intended to be a substitute for those laws. Refer to “Regulatory and Supervisory Considerations” in Truist’s Annual Report on Form 10-K for the year ended December 31, 2025 for additional disclosures.
On March 19, 2026, the FDIC, FRB, and OCC issued two joint notices of proposed rulemaking to modernize the regulatory capital framework. The proposals include (i) revisions to the existing standardized approach to calculating risk-weighted assets applicable to Category III and IV institutions and smaller banking organizations, including Truist and Truist Bank; and (ii) a new expanded risk-based approach to calculating risk-weighted assets applicable to the largest and most internationally active banking organizations (Category I and II institutions). As Category III institutions, Truist and Truist Bank would have the option under the proposals to apply the expanded risk-based approach in lieu of the revised standardized approach. The proposals would also (i) update the market risk framework applicable to banking organizations with significant trading activity; and (ii) require Category III and IV banking organizations, including Truist and Truist Bank, to recognize most elements of AOCI in their regulatory capital, subject to a five-year transition period. The timing and content of any final rules, and the potential effects of any final rules on Truist and Truist Bank, remain uncertain.
Critical Accounting Estimates
The accounting and reporting policies of Truist are in accordance with GAAP and conform to the accounting and reporting guidelines prescribed by bank regulatory authorities. The preparation of financial statements in accordance with GAAP requires management to make estimates that are used in arriving at the carrying value of assets and liabilities, and amounts reported for revenues and expenses. Certain of these estimates are considered critical because they require the use of difficult, complex, or subjective judgments, which are sensitive to changes in key assumptions or inputs. The selection of different assumptions or inputs could result in material changes in Truist’s consolidated financial position or consolidated results of operations, and related disclosures.
Estimates that are particularly susceptible to significant change include the ACL; fair value measurement; goodwill; income taxes; and pension and postretirement benefit obligations. Understanding Truist’s accounting policies is fundamental to understanding its consolidated financial position and consolidated results of operations. The critical accounting policies are discussed in MD&A in Truist’s Annual Report on Form 10-K for the year ended December 31, 2025. Significant accounting policies and changes in accounting principles and effects of new accounting pronouncements are discussed in “Note 1. Basis of Presentation” in Form 10-K for the year ended December 31, 2025. Disclosures regarding the effects of new accounting pronouncements are included in “Note 1. Basis of Presentation” in this report, as applicable.
Goodwill
Goodwill is subject to ongoing periodic impairment testing based on the fair values of the reporting units to which the acquired goodwill relates. Refer to “Note 1. Basis of Presentation” and “Note 7. Goodwill and Other Intangible Assets” in Truist’s Annual Report on Form 10-K for the year ended December 31, 2025 for a description of management’s impairment testing approach and the Company's most recent annual quantitative test.
The estimated fair value of a reporting unit is highly sensitive to changes in management’s estimates and assumptions, including management’s financial projections, discount rate estimates, and other inputs. Therefore, in some instances, changes in these assumptions could impact whether the fair value of a reporting unit is greater than its carrying value. The valuation of the WB reporting unit as of October 1, 2025 indicated that if the discount rate increased 100 basis points, with other cash flow assumptions unchanged, the reporting unit’s fair value would be less than its carrying value, indicating a goodwill impairment under the income approach. Ultimately, adverse performance in relation to management’s projections or potential future changes in management’s assumptions may impact the estimated fair value of a reporting unit and cause the fair value of the reporting unit to be below its carrying value.
Additionally, a reporting unit’s carrying value could change based on market conditions, changes in the underlying makeup of the reporting unit, or changes in the risk profile of the reporting unit, which could impact whether the fair value of a reporting unit is less than its carrying value.
The Company monitored events and circumstances during the period from January 1, 2026 to June 30, 2026, including macroeconomic and market factors, industry and banking sector events, Truist specific performance indicators, a comparison of management’s forecast and assumptions to those used in its October 1, 2025 quantitative impairment test, and the sensitivity of the October 1, 2025 quantitative results to changes in assumptions as of June 30, 2026. Based on these considerations, Truist concluded that it was not more-likely-than-not that the fair value of one or more of its reporting units is below its respective carrying amount as of June 30, 2026.
76 Truist Financial Corporation
Non-GAAP Financial Measures
Tangible common equity, average tangible common equity, and related measures, including ROTCE and TBVPS, are non-GAAP measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Truist’s management uses these measures to assess profitability, returns relative to balance sheet risk, and shareholder value. These measures should not be considered in isolation or as a substitute for the related GAAP financial measures presented in this report and are not necessarily comparable to similar non-GAAP financial measures that may be presented by other companies. The following tables reconcile each of these non-GAAP financial measures to the most directly comparable GAAP financial measure.
Table 27: Reconciliation of ROTCE
Three Months Ended June 30,
Six Months Ended June 30,
(Dollars in millions)
2026
2025
2026
2025
Calculation of tangible net income available to common shareholders:
Net income available to common shareholders
(a)
$
1,519
$
1,180
$
2,896
$
2,337
Amortization of intangibles
63
73
127
148
Applicable income taxes related to amortization of intangibles(1)
(15)
(17)
(30)
(35)
Tangible net income available to common shareholders
(b)
$
1,567
$
1,236
$
2,993
$
2,450
Calculation of average tangible common shareholders’ equity:
Average common shareholders’ equity
(c)
$
58,616
$
58,327
$
59,244
$
58,227
Average intangible assets
(18,321)
(18,590)
(18,353)
(18,630)
Applicable deferred taxes related to intangible assets(1)
401
417
402
420
Average tangible common shareholders’ equity
(d)
$
40,696
$
40,154
$
41,293
$
40,017
Return on average common shareholders’ equity
(a)/(c)
10.4
%
8.1
%
9.9
%
8.1
%
ROTCE
(b)/(d)
15.4
12.3
14.6
12.3
(1)Calculated using the applicable marginal tax rate.
Table 28: Reconciliation of Tangible Common Equity
(Dollars in millions, except per share data, shares in thousands)
June 30, 2026
December 31, 2025
Calculation of period end tangible common equity:
Total shareholders’ equity
$
64,095
$
65,189
Preferred stock
(5,411)
(4,916)
Common shareholders’ equity
(a)
58,684
60,273
Intangible assets
(18,287)
(18,416)
Applicable deferred taxes related to intangible assets(1)
400
407
Tangible common equity
(b)
$
40,797
$
42,264
Common shares outstanding at end of period
(c)
1,221,626
1,262,470
Common shareholders’ equity per common share
(a)/(c)
$
48.04
$
47.74
TBVPS
(b)/(c)
33.40
33.48
(1)Calculated using the applicable marginal tax rate.
Truist Financial Corporation 77
Mentions · how they’re counted
| Category | Underlined | Word counter | Model’s count |
|---|---|---|---|
| AI AI, artificial intelligence, generative AI, machine learning, large language model, LLM | 0 | 0 | 0 |
| Layoffs layoffs, RIF, headcount reduction, workforce optimization, restructuring | 0 | — | 0 |
| Recession recession, downturn, contraction, slowdown | 4 | 4 | 0 |
| Tariffs tariff, trade war, trade barriers, trade restrictions, trade policy | 0 | 0 | 0 |
| Buybacks share repurchase, buyback program | 5 | — | 2 |
Underlines use the same word lists the scores use. AI, recession and tariffs follow Palanor’s word counter, so those counts match it exactly on the same text. Layoffs and buybacks use the terms the model was given. The model’s count is an estimate by meaning, not by string, so it can differ from the underlines.
Source: SEC EDGAR · public domain · Highlights by Palanor