Truist Financial Corporation (TFC) Earnings & Analysis

Latest quarter

Truist reported third-quarter revenue of $6.1 billion, down from $7.8 billion a year earlier. On the basis used for the consensus comparison, revenue was $5.2 billion, below the $5.3 billion consensus. Adjusted earnings per share of $1.16 also missed the $1.17 consensus. Reported diluted earnings per share fell to $0.56 from $1.04.

The filing said noninterest income fell $1.5 billion year over year, including $1.4 billion of losses on available-for-sale securities and $66 million of losses from the RAC loan sale. Taxable-equivalent net interest income rose 0.7%, as asset and liability repricing and higher deposit and loan balances offset some pressure from loan spreads and deposit mix.

Truist’s filing said wealth management income rose, while noninterest expense increased $91 million, including RAC sale costs. The company reported an operating margin of 14.6%, compared with 22.1% a year earlier, and free cash flow of $1.8 billion, compared with $1.5 billion.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Mike Lyons said the quarter was broadly in line with Truist’s expectations after excluding the RAC sale and associated securities repositioning. Wealth management performed ahead of plan, and client deposit growth and asset quality were better than expected, he said. Lyons added that some investment banking revenue was pushed out late in the quarter amid market volatility and that loan balances reflected a focus on risk-adjusted returns and higher-than-expected paydowns.

CFO Mike Maguire said taxable-equivalent net interest income rose to $3.7 billion from the prior quarter, helped by fixed-rate asset repricing and an additional day, partly offset by lower loan balances. He said net interest margin increased to 3%. Average deposits rose as client balances grew, particularly in wholesale banking, Maguire added.

Lyons said Truist plans to focus on relationship-based businesses and redirect resources from activities that do not meet its strategic, return or client-service tests. He identified branch and ATM networks, technology, payments and client-facing staff as investment priorities. In response to a question about retail investment, Lyons said branches need refurbishment and that mobile and digital platforms require continued investment to stay competitive.

Maguire said Truist completed the sale of its $5.5 billion RAC auto loan portfolio and used the $5.2 billion of net proceeds to reduce borrowings. He said Truist also agreed to sell $7.7 billion of LightStream loans, with expected proceeds intended to repay wholesale funding. Asked about timing, Maguire said the company did not know precisely when the transaction would close, though it expected a fourth-quarter closing.

Asked about expenses, Lyons said the strategic review would examine spending across the company and redirect money toward investment. He said Truist would provide a fuller view of its 2027 outlook after completing the work.

Guidance

In its earlier outlook, Truist expected high single-digit growth in noninterest income for 2026. On the latest call, CFO Mike Maguire said Truist expects about 10.0% growth in adjusted noninterest income for the full year, excluding investment securities losses and the RAC loan sale. The later outlook is stated on an adjusted basis.