Truist Financial exits near prime auto lending with $5.5 billion loan sale

Truist Financial Corporation (TFC) said Wednesday that it entered into an agreement to sell $5.5 billion of auto loans representing substantially all assets of Regional Acceptance Corporation, executing a strategic exit from the near prime auto lending business.

Chief Financial Officer Mike Maguire disclosed the transaction in connection with a presentation at the Barclays Global Financial Services Conference in New York City, according to a regulatory filing. The deal is expected to close in late third quarter or early fourth quarter of 2026, subject to customary closing conditions.

Key takeaways

• Truist agreed to sell $5.5 billion of auto loans from Regional Acceptance Corporation.
• The transaction generates $5.2 billion of net proceeds and a $535 million loan loss reserve recapture.
• The sale creates $945 million, or 22 basis points, of common equity tier 1 capital.
• The company plans to maintain its 2026 share repurchase target at $5 billion.

Transaction proceeds and capital impact

The loan sale generates $5.2 billion of net proceeds alongside a $535 million loan loss reserve recapture, which reflects the difference between the purchase price and the loan amount net of the reserve. The company said the transaction creates $945 million in capital, driven by a $410 million after-tax loan loss reserve recapture and $600 million of capital created by a reduction in risk-weighted assets, which is partially offset by $65 million of after-tax transaction related costs.

Truist plans to use the proceeds to repay wholesale borrowings and to reposition certain available-for-sale securities to fully offset the capital created from the Regional Acceptance Corporation sale. The company reported that Regional Acceptance Corporation pre-tax earnings were approximately breakeven through the six months ended June 30, 2026.

Balance sheet and credit profile changes

The strategic exit reduces non-performing loans by more than 10 basis points as of June 30, 2026, and cuts net charge-offs by about 10 basis points annually. Truist stated that third-quarter 2026 and full-year 2026 outlooks remain unchanged excluding the impact of these strategic actions, and expects the moves to create modest earnings and return on tangible common equity accretion in 2027.

Why it matters

The transaction marks another step in Truist's broader strategic review, following prior actions that included discontinuing marine and recreational vehicle lending. By shedding non-core, less profitable near prime auto loans, the company aims to enhance its liquidity and funding profile while strengthening resilience across stress environments without altering its capital deployment plans for the current year.

By the numbers

| Metric | Value | Source | |---|---|---|> | Loan portfolio sold | $5.5 billion | SEC filing | | Net proceeds | $5.2 billion | SEC filing | | Loan loss reserve recapture | $535 million | SEC filing | | Capital increase | $945 million | SEC filing | | Common equity tier 1 increase | 22 basis points | SEC filing | | Share repurchase target | $5 billion | SEC filing |

Closing conditions and timeline

Closing of the Regional Acceptance Corporation loan sale remains subject to the satisfaction of customary closing conditions. Truist anticipates the transaction will be finalized in late third quarter or early fourth quarter of 2026, subject to market conditions for any secondary liquidity and capital deployment actions undertaken by the company.