Truist third-quarter net income falls to $799 million after securities loss

Truist Financial Corporation (TFC) reported third-quarter 2026 net income of $799 million, or $0.56 per diluted share, the company said in a filing on Friday.

Net income fell from $1,452 million a year earlier. Adjusted diluted earnings per share, which exclude selected items, were $1.16, up 12% from a year earlier.

The reported result includes a $1.4 billion pre-tax loss on the sale of available-for-sale securities. The company said the sale was part of an AFS securities repositioning that it completed in the quarter.

Here's how the company did:

• Diluted EPS: $0.56 vs. $1.04 a year earlier
• Adjusted diluted EPS: $1.16 vs. $1.04 a year earlier
• Net income available to common shareholders: $684 million vs. $1,348 million a year earlier
• Revenue: $3.75 billion vs. $5.19 billion a year earlier
• Adjusted revenue, taxable-equivalent: $5.30 billion vs. $5.24 billion a year earlier
• Efficiency ratio: 82.9% vs. 58.1% a year earlier
• Return on average tangible common equity: 7.2%, or 14.6% adjusted, vs. 13.6% a year earlier

Here's how Truist's segments did during the quarter, without adjustments for the RAC loan sale:

• Consumer and Small Business Banking: net income of $1,276 million vs. $636 million a year earlier
• Wholesale Banking: net income of $1,048 million vs. $1,083 million a year earlier
• Other, Treasury & Corporate: net loss of $1,525 million vs. net loss of $267 million a year earlier

Consumer and Small Business Banking had an allocated benefit for credit losses of $299 million. Its segment net income rose from $636 million a year earlier.

Wholesale Banking's net income was $1,048 million, down from $1,083 million a year earlier. Its investment banking and trading income was $324 million, up 0.3% from a year earlier.

Other, Treasury & Corporate posted a net loss of $1,525 million. Its noninterest income was a loss of $1,599 million.

Net interest income on a taxable-equivalent basis, which adds back tax-exempt income at the 21% federal rate, rose 1.1% from the second quarter to $3.71 billion. The company said the increase was driven by an additional day and fixed asset and liability repricing.

Net interest margin, or NIM, measures the yield on interest-earning assets. It was 3.00%, up two basis points from the second quarter and down one basis point from a year earlier.

Noninterest income was $84 million. That compares with $1,644 million in the second quarter and $1,558 million a year earlier. The decline reflects the $1.4 billion securities loss and a $66 million loss on the RAC loan sale.

Wealth management income rose to $407 million, up 8.8% from a year earlier. The company said the increase primarily reflected favorable market performance.

Noninterest expense was $3.11 billion, up from $3.01 billion a year earlier. Excluding $40 million of RAC loan sale costs, expense was $3.07 billion.

The company recorded a benefit for credit losses of $253 million. That compares with provisions of $395 million in the second quarter and $436 million a year earlier. The benefit includes a $581 million release of allowance for credit losses tied to the RAC loan sale.

Net charge-offs were $629 million, or 0.77% of average loans and leases, up from 0.48% a year earlier. Excluding RAC, the net charge-off ratio was 0.38%.

End-of-period loans and leases held for investment were $323.9 billion, down $5.9 billion from June 30. The company said $5.5 billion of the decline was due to the RAC loan sale.

Average deposits were $410.7 billion, up 3.6% from a year earlier. End-of-period deposits were $413.2 billion.

Truist President & CEO Mike Lyons said: “We delivered a solid quarter while also taking decisive actions to better position Truist for the future.”

Lyons also said: “Looking ahead, we remain confident in our ability to deliver against our near- and long-term ROTCE targets and will work to build a more focused company positioned to deliver sustainable growth and stronger returns for shareholders.”

Common stock dividends of $0.52 per share were declared in the quarter, unchanged from a year earlier. The company returned $1.8 billion to shareholders, including $0.6 billion of common dividends and $1.2 billion of share repurchases.

The CET1 ratio was 10.7% at September 30, down from 11.0% a year earlier. The company said the decline was primarily due to capital returned to shareholders and the AFS securities repositioning.

For the fourth quarter, the company expects revenue on a taxable-equivalent basis of about $5.35 billion. That outlook includes a $125 million reduction from the RAC loan sale and a $40 million increase from the AFS securities repositioning.

The company expects fourth-quarter net interest income of $3.65 billion to $3.7 billion, and a net charge-off ratio of about 0.45%. The outlook excludes the impact of potential strategic actions.

The company expects an effective tax rate of about 13.5%, or about 15.5% on a taxable-equivalent basis. It also expects about $1 billion of share repurchases and noninterest expense up 2.5%. The presentation gives no dollar figure for that expense outlook.

Separately, the company said it signed an agreement on October 14, 2026, to sell $7.7 billion of unsecured consumer loans to Carlyle Group Inc. The loans represent substantially all assets of LightStream, its unsecured lending platform.

The company expects net proceeds of $7.2 billion and about $850 million of CET1 capital creation, or 20 basis points. It anticipates closing in the fourth quarter of 2026, subject to customary closing conditions, and plans to use the proceeds to repay wholesale borrowings.

In the third quarter, the company completed the RAC loan sale. It sold a $5.5 billion RAC auto loan portfolio for $5.2 billion and repaid $5.2 billion of borrowings.

The company also sold $8.6 billion of book value AFS securities, with a weighted average book yield of 2.67%, and recorded a pre-tax loss of $1.4 billion. It bought $7.2 billion of securities with a weighted average yield of 5.60%.

Nonperforming loans and leases were 0.40% of loans and leases held for investment at September 30, down 11 basis points from June 30.