Truist Financial Corp: Form 10-Q for the period ended Sep 30, 2026

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. 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.

Executive Overview

On August 31, 2026, Mike Lyons became Truist’s President and Chief Executive Officer. We are reallocating resources to focus on our core business and invest in core capabilities (including technology, talent, and products). These efforts are centered on helping us become the most important financial partner to our clients and driving stronger, more sustainable growth and higher returns.

For the third quarter of 2026, we reported net income of $684 million, or $0.56 per diluted share, which reflects the impact of several actions to better position Truist for the future. The actions described below simplify the Company, allow us to focus more on our core businesses, and further strengthen our balance sheet by reducing credit risk, interest rate risk, and wholesale funding.

The actions taken during the third quarter included the completion of the Regional Acceptance Corporation (RAC) loan sale and the subsequent repositioning of a portion of our AFS securities portfolio. The RAC loan sale resulted in a $581 million pre-tax, or $0.36 per share, loan loss reserve recapture and $106 million pre-tax, or $0.06 per share, of impacts included in noninterest income and noninterest expense. The AFS securities repositioning resulted in a $1.4 billion pre-tax, or $0.90 per share, loss.

Underlying results were solid, reflecting client-driven deposit growth, strong asset quality, continued expense discipline, and continued capital return to shareholders.

During the third quarter of 2026, we returned $1.8 billion of capital to shareholders, including $629 million in common stock dividends and $1.2 billion in common share repurchases. As of September 30, 2026, $6.5 billion remained under our $10.0 billion common share-repurchase authorization.

Additionally, on October 14, 2026, Truist signed an agreement to sell $7.7 billion of loans, representing substantially all assets of LightStream, a national unsecured lending platform. Estimated net proceeds for the transaction are $7.2 billion. The resulting impact to net income is not expected to be material. The transaction is expected to close in the fourth quarter of 2026, subject to customary closing conditions.

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(Dollars in millions)

(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.

Net income available to common shareholders was $684 million for the third quarter of 2026, a decrease of 49% compared to the third quarter of 2025.

Total revenue - TE was down 28% compared to the third quarter of 2025.

• Net interest income - TE increased $27 million, or 0.7%, compared to the third quarter of 2025, driven by fixed-rate asset and liability repricing, higher client deposit balances, and higher loan balances, partially offset by lower loan spreads and unfavorable deposit mix. NIM - TE was 3.00%, stable compared to the third quarter of 2025.
• Noninterest income was impacted by $66 million of losses resulting from the RAC loan sale and $1.4 billion of losses from the AFS securities sale, partially offset by record quarterly income for wealth management.

Noninterest expense increased $91 million compared to the third quarter of 2025, and included $40 million of RAC loan sale costs.

Asset quality improved as a result of the RAC loan sale:

• NCOs as a percentage of loans and leases were 77 basis points, which included 39 basis points related to RAC.
• The third quarter of 2026 included a benefit from credit losses of $253 million, reflecting the benefit from the release of remaining ACL upon the transfer of RAC loans to LHFS.
• The ACL was $4.4 billion and included $4.1 billion for the ALLL and $370 million for the reserve for unfunded commitments. The ALLL as a percentage of loans and leases HFI was 1.25%, down 28 basis points compared to December 31, 2025.
• Nonperforming loans and leases HFI were 0.40% of loans and leases HFI at September 30, 2026, down eight basis points compared to December 31, 2025, primarily due to the RAC loan sale.
• Loans 90 days or more past due and still accruing, excluding government guaranteed loans, were 0.04% as a percentage of loans and leases HFI at September 30, 2026, down one basis point compared to December 31, 2025.

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Capital and liquidity:

• Truist’s preliminary CET1 ratio was 10.7% as of September 30, 2026, down 10 basis points compared to December 31, 2025, primarily due to capital returned to shareholders and the repositioning of the AFS securities portfolio, partially offset by current year earnings and benefits from the RAC loan sale.
• Truist declared common dividends of $0.52 per share during the third quarter of 2026, and repurchased $1.2 billion of common stock.
• Truist’s average consolidated LCR was 110% for the three months ended September 30, 2026, relative to the regulatory minimum of 100%.
• Truist’s book value per common share at September 30, 2026, was $46.78, compared to $47.74 at December 31, 2025. Truist’s TBVPS was $31.90 at September 30, 2026, compared to $33.48 at December 31, 2025.

Analysis of Results of Operations

Net Interest Income

Three Months Ended September 30, 2026 compared to the Three Months Ended September 30, 2025

Net interest income - TE increased $27 million, or 0.7%, compared to the third quarter of 2025, driven primarily by fixed-rate asset and liability repricing, higher client deposit balances, and higher loan balances, partially offset by lower loan spreads and unfavorable deposit mix. NIM - TE was 3.00%, stable compared to the third quarter of 2025.

• Average earning assets increased $5.4 billion, or 1.1%, primarily due to an increase in average total loans of $7.4 billion, or 2.3%.
• The yield on the average total loan portfolio was 5.71%, down 29 basis points. The yield on the average securities portfolio was 3.03%, down 13 basis points.
• Average deposits increased $14.1 billion, or 3.6%, average short-term borrowings decreased $8.2 billion, or 31%, and average long-term debt increased $3.7 billion, or 8.9%.
• The average cost of total deposits was 1.59%, down 25 basis points. The average cost of short-term borrowings was 3.96%, down 46 basis points. The average cost of long-term debt was 4.73%, down 31 basis points.

Nine Months Ended September 30, 2026 compared to the Nine Months Ended September 30, 2025

Net interest income - TE increased $148 million, or 1.4%, for the nine months ended September 30, 2026 compared to 2025, driven by fixed asset repricing and higher earning assets, partially offset by lower loan spreads, fixed-rate debt repricing, and unfavorable deposit mix. NIM - TE of 3.00% was stable compared to the nine months ended September 30, 2025.

• Average earning assets increased $9.0 billion, or 1.9%, primarily due to an increase in average total loans of $15.5 billion, or 4.9%, partially offset by a decline in average securities of $4.1 billion, or 3.4%, and other earning assets (primarily cash at the Federal Reserve) of $2.2 billion, or 5.6%.
• The yield on the average total loan portfolio was 5.70%, down 29 basis points. The yield on the average securities portfolio was 2.97%, down 19 basis points.
• Average deposits increased $8.4 billion, or 2.1%, average short-term borrowings decreased $1.8 billion, or 6.4%, and average long-term debt increased $4.9 billion, or 14%.
• The average cost of total deposits was 1.57%, down 26 basis points. The average cost of short-term borrowings was 3.89%, down 57 basis points. The average cost of long-term debt was 4.77%, down 27 basis points.

The major components of Net interest income - TE, the related annualized yields and the variances caused by changes in interest rates versus changes in volumes are summarized below.

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(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.

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(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.

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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

(Dollars in millions)

Noninterest income decreased $1.5 billion for the third quarter of 2026 compared to the third quarter of 2025, and $1.1 billion for the nine months ended September 30, 2026 compared to 2025. The third quarter of 2026 included losses from AFS securities sales of $1.4 billion and losses associated with the RAC loan sale of $66 million (other income).

For the three months ended September 30, 2026:

• Wealth management income increased primarily reflecting favorable market performance.
• Other income decreased primarily due to the losses associated with the RAC loan sale and lower returns from investments held for post-retirement benefits (which were offset by lower personnel expense).

For the nine months ended September 30, 2026:

• Wealth management income increased primarily reflecting favorable market performance.
• Investment banking and trading income increased primarily due to higher trading income and capital markets revenue.
• Lending related fees increased primarily due to higher leasing-related gains.
• Other income decreased primarily due to the losses associated with the RAC loan sale and lower income from certain solar and other investments.

Noninterest Expense

The following table provides the components of Truist’s noninterest expense:

Table 4: Noninterest Expense

(Dollars in millions)

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Noninterest expense increased $91 million for the third quarter of 2026 compared to the third quarter of 2025, and $237 million for the nine months ended September 30, 2026 compared to 2025. For both periods:

• Personnel expense increased primarily due to higher incentives expense related to revenue-generating businesses, employee benefit expenses, including costs associated with the RAC loan sale, and higher salaries and annual incentives expense.
• Other expense decreased primarily driven by adjustments to non-fraud operating loss accruals.

Income Taxes

The following table provides information about the effective tax rate:

Table 5: Effective Tax Rate

(Dollars in millions)

The lower effective tax rate for the third quarter of 2026 compared to the third quarter of 2025 was primarily driven by lower income before tax resulting from the AFS securities repositioning, which increased the relative benefit of tax credits, renewable energy tax credit investing activity, and other tax-advantaged items on the effective tax rate. The provision for income taxes was also impacted by the RAC loan sale and AFS securities repositioning.

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 about the Company’s reportable segments.

Table 6: Net Income from Continuing Operations by Reportable Segment

(Dollars in millions)

Three Months Ended September 30, 2026 compared to the Three Months Ended September 30, 2025

Consumer and Small Business Banking

CSBB net income was $1.3 billion for the third quarter of 2026, an increase of $640 million compared to the third quarter of 2025.

• Segment net interest income increased $296 million primarily driven by higher deposit spreads and balances, partially offset by lower loan balances and spreads.
• The allocated provision for credit losses decreased $699 million, reflecting lower loan loss reserves as a result of the RAC loan sale, partially offset by increased charge-offs also related to the sale.
• Noninterest income decreased $62 million primarily due to lower other income from losses related to the RAC loan sale.
• Noninterest expense increased $89 million primarily due to RAC loan sale costs, increased operational charge-offs, and higher enterprise technology charges.

CSBB average loans and leases HFI decreased $3.3 billion, or 2.4%, for the third quarter of 2026 compared to the third quarter of 2025, primarily due to a decline in the indirect auto portfolio driven by the RAC loan sale, partially offset by increases in the Service Finance and mortgage warehouse lending portfolios.

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CSBB average total deposits increased $2.5 billion, or 1.2%, for the third quarter of 2026 compared to the third quarter of 2025, primarily driven by increases in money market deposits, partially offset by decreases in time deposits, interest checking, and savings deposits.

Wholesale Banking

WB net income was $1.0 billion for the third quarter of 2026, a decrease of $35 million compared to the third quarter of 2025.

• Segment net interest income decreased $17 million primarily due to lower loan spreads.
• The allocated provision for credit losses increased $11 million, which reflects an increase in net charge-offs and a decrease in the net reserve release.
• Noninterest income increased $73 million driven by higher income from wealth management and capital markets activity, partially offset by lower operating lease income.
• Noninterest expense increased $79 million primarily due to higher regulatory expenses, enterprise technology charges, and revenue-related incentives.

WB average loans HFI increased $8.3 billion, or 4.5%, for the third quarter of 2026 compared to the third quarter of 2025, primarily due to increases in average commercial and industrial loan balances and growth in the CRE portfolio.

WB average total deposits increased $14 billion, or 9.8%, for the third quarter of 2026 compared to the third quarter of 2025, primarily due to increases in interest checking, partially offset by decreases in money market and savings and noninterest-bearing deposits.

Other, Treasury and Corporate

OT&C generated a net loss of $1.5 billion for the third quarter of 2026, compared to a net loss of $267 million for the third quarter of 2025.

• OT&C net interest income decreased $245 million primarily due to higher intersegment funding credit on deposits and a decline in interest income on cash balances and securities resulting from lower balances and yields in those portfolios, partially offset by lower balances and costs on short-term borrowings.
• Noninterest income decreased $1.5 billion driven by a loss from the sale of securities resulting from the AFS securities repositioning.
• Noninterest expense decreased $77 million primarily due to lower allocations for technology and enterprise operations and adjustments to non-fraud operating loss accruals, partially offset by increases in personnel expenses driven by higher investments in enterprise technology talent.

Nine Months Ended September 30, 2026 compared to the Nine Months Ended September 30, 2025

Consumer and Small Business Banking

CSBB net income was $2.8 billion for the nine months ended September 30, 2026, an increase of $1.1 billion compared to the prior year.

• Segment net interest income increased $823 million primarily driven by higher deposit spreads, partially offset by lower loan spreads.
• The allocated provision for credit losses decreased $729 million primarily due to lower loss reserves from the RAC loan sale, partially offset by increased charge-offs also related to the sale.
• Noninterest income decreased $26 million primarily reflecting lower other income due to losses related to the RAC loan sale, partially offset by higher deposit-related revenue.
• Noninterest expense increased $111 million primarily due to RAC loan sale costs, higher enterprise technology charges, regulatory expenses, and loan processing expense along with increased operational charge-offs.

CSBB average loans HFI increased $1.2 billion, or 0.9%, for the nine months ended September 30, 2026 compared to the prior year, primarily due to higher indirect lending in the Service Finance portfolio and increased real estate lending.

CSBB average total deposits increased $2.8 billion, or 1.3%, for the nine months ended September 30, 2026 compared to the prior year, primarily due to higher average money market deposits, partially offset by lower average time deposits and interest checking.

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Wholesale Banking

WB net income was $2.9 billion for the nine months ended September 30, 2026, an increase of $147 million compared to the prior year.

• Segment net interest income decreased $42 million primarily due to lower loan spreads, partially offset by lower cost of deposits.
• The allocated provision for credit losses decreased $30 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 $413 million primarily due to higher income from capital markets and trading activity, wealth management, and lending related revenue.
• Noninterest expense increased $178 million primarily due to increased personnel expenses driven by revenue-related incentives expense and higher regulatory expense.

WB average loans HFI increased $13 billion, or 7.0%, for the nine months ended September 30, 2026 compared to the prior year, primarily driven by higher balances in the commercial and industrial loan portfolio and growth in the CRE portfolio.

WB average total deposits increased $4.9 billion, or 3.3%, for the nine months ended September 30, 2026 compared to the prior year, primarily due to higher average interest-bearing checking balances, partially offset by declines in money market and savings and noninterest-bearing deposits.

Other, Treasury, and Corporate

OT&C generated a net loss of $1.9 billion for the nine months ended September 30, 2026, compared to a net loss of $572 million for the prior year.

• OT&C net interest income decreased $621 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 intersegment funding credit on Consumer deposits, partially offset by lower short-term borrowings balances and costs as well as lower intersegment funding credit on Wholesale deposits.
• Noninterest income decreased $1.5 billion primarily driven by a loss from the sale of securities resulting from the AFS securities repositioning.
• Noninterest expense decreased $52 million primarily due to lower professional fees and outside processing expenses, allocations for technology and enterprise operations, and adjustments to non-fraud operating loss accruals, partially offset by salaries and incentives driven by higher investments in talent in enterprise technology and support functions.

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Analysis of Financial Condition

Investment Activities

The carrying value of the securities portfolio totaled $110.2 billion at September 30, 2026, compared to $112.2 billion at December 31, 2025. U.S. Treasury, GSE, and agency MBS represented 98.0% and 99.7% of the total securities portfolio at September 30, 2026, and December 31, 2025, respectively. The majority of the portfolio is agency MBS.

During the third quarter of 2026, we repositioned a portion of our AFS securities portfolio by selling $8.6 billion of longer-duration, lower-yielding agency MBS and purchasing $7.2 billion of shorter-duration, higher-yielding agency MBS and U.S. Treasury securities. The sale of securities resulted in a $1.4 billion loss.

• For the nine months ended September 30, 2026, we purchased $23.0 billion of securities, partially offset by paydowns, maturities, and sales of $22.3 billion.
• As of September 30, 2026, 42% 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 September 30, 2026, approximately 5.7% 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 4.4 years at September 30, 2026, and December 31, 2025, excluding the impact of swaps, or 3.1 years at September 30, 2026 and 2.9 years at December 31, 2025, including the impact of swaps. The effective duration of the HTM securities portfolio was 7.0 years at September 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

(Dollars in millions)

Average loans and leases HFI were $325.5 billion, a decrease of $3.6 billion, or 1.1%, compared to the second quarter of 2026.

• Average commercial loans decreased 1.1% primarily due to a decrease in the commercial and industrial portfolio.
• Average consumer loans decreased 1.1% driven primarily by a decline in the indirect auto portfolio, resulting from the RAC loan sale, partially offset by an increase in the residential mortgage portfolio.

End of period loans and leases HFI were $323.9 billion, down $5.9 billion, or 1.8%, compared to June 30, 2026, primarily due to the RAC loan sale in the third quarter of 2026 and a decline in the commercial and industrial portfolio, partially offset by an increase in the residential mortgage portfolio.

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Asset Quality

The following table summarizes asset quality information. 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 8: Asset Quality

(Dollars in millions)

Nonperforming assets totaled $1.3 billion at September 30, 2026, down $410 million compared to June 30, 2026, primarily due to the RAC loan sale, partially offset by an increase in the commercial and industrial portfolio. Nonperforming loans and leases were 0.40% of loans and leases HFI at September 30, 2026, down eleven basis points compared to June 30, 2026.

At September 30, 2026, and December 31, 2025, 58% and 56% of loans and leases HFI were variable rate, respectively.

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The following tables present asset quality metrics:

Table 9: Asset Quality Ratios

(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.

Ratios are annualized.

(1) Includes $251 million of net charge-offs upon the transfer of RAC loans to LHFS in the third quarter of 2026.

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The following table presents activity related to NPAs:

Table 11: Rollforward of NPAs

(Dollars in millions)

(1) Includes charge-offs and losses recorded upon sale of $197 million and $207 million for the nine months ended September 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.

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(Dollars in millions)

(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 60% and 59% of Truist’s funded loans within that industry category at September 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 overcollateralization 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.

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(Dollars in millions)

(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.

(Dollars in millions)

(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.

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ACL

Activity related to the ACL is presented in the following tables:

Table 15: Activity in ACL

(Dollars in millions)

(1) Includes a net benefit of $581 million in the third quarter of 2026 from the loan loss reserve recapture following the recognition of held for sale-related charge-offs resulting from the RAC loan sale.

(2) Includes $251 million of net charge-offs upon the transfer of RAC loans to LHFS in the third quarter of 2026.

The ACL was $4.4 billion at September 30, 2026, and included $4.1 billion for the ALLL and $370 million for the reserve for unfunded commitments. The ALLL ratio at September 30, 2026 was 1.25%, down 26 basis points compared with June 30, 2026, following the recognition of held for sale-related charge-offs resulting from the RAC loan sale.

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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

(Dollars in millions)

Other Assets

The components of other assets are presented in the following table:

(Dollars in millions)

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Funding Activities

Deposits

The following table presents average deposits:

Table 18: Average Deposits

(Dollars in millions)

Average deposits for the third quarter of 2026 were $410.7 billion, up $5.8 billion, or 1.4%, compared to the second quarter of 2026, driven by an increase in interest checking. Average noninterest-bearing deposits decreased 0.6% compared to the second quarter of 2026 and represented 25.1% of total deposits for the third quarter of 2026 and 25.6% for the second quarter of 2026.

End of period deposits were $413.2 billion, up $3.9 billion, or 0.9%, compared to June 30, 2026, primarily due to an increase in interest checking deposits, partially offset by a decline in time deposits and noninterest-bearing deposits.

Borrowings

At September 30, 2026, short-term borrowings totaled $12.4 billion, a decrease of $15.4 billion compared to December 31, 2025, primarily due to a decline in FHLB advances.

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 $53.4 billion at September 30, 2026, an increase of $11.4 billion compared to December 31, 2025. During the nine months ended September 30, 2026, the Company had:

• Issuances of $6.4 billion of primarily fixed-to-floating rate senior notes with a weighted average interest rate of 4.78% due between January 27, 2029 and April 23, 2037 and $350 million of floating rate senior notes due January 27, 2029.
• Net issuances of $11.6 billion of floating rate FHLB advances.
• Maturities and redemptions of $4.3 billion of senior notes and $1.8 billion of subordinated notes.

Refer to “Note 8. Borrowings” for additional information on short-term borrowings and long-term debt.

Shareholders’ Equity

Total shareholders’ equity was $61.5 billion at September 30, 2026, a decrease of $3.7 billion from December 31, 2025. This decrease reflected $3.6 billion in common share repurchases, including excise taxes, $2.2 billion in common and preferred dividends, and a $2.5 billion decrease in AOCI, partially offset by $3.8 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 September 30, 2026 was $46.78, compared to $47.74 at December 31, 2025. Truist’s TBVPS was $31.90 at September 30, 2026, compared to $33.48 at December 31, 2025.

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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.

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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 rates 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.

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
• Noninterest-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.

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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 September 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 $202 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 September 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.

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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 nine months ended September 30, 2026 and 2025. Average VaR measures in the nine months ended September 30, 2026 were lower compared to the nine months ended September 30, 2025, due to lower risk positions.

(Dollars in millions)

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:

(Dollars in millions)

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.

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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.

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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 September 30, 2026, Truist held average weighted eligible HQLA of $92.2 billion, and Truist’s average LCR was 110%, 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 September 30, 2026, Truist was compliant with this requirement.

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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:

(Dollars in millions)

At September 30, 2026, Truist Bank’s available secured borrowing capacity represented approximately 8.6 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 September 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.

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The following table presents the credit ratings and outlooks of the Parent Company and Truist Bank as of September 30, 2026:

Table 23: Credit Ratings of Truist Financial Corporation and Truist Bank

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

(1) Reflects an SCB requirement of 2.5% applicable to Truist as of September 30, 2026. Truist’s SCB requirement, received in the 2025 CCAR process, is effective from October 1, 2025 to December 31, 2027.

The Parent Company’s capital ratios are presented in the following table:

Table 25: Capital Ratios - Truist Financial Corporation

(Dollars in millions)

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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 that 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 10.7% as of September 30, 2026, down 10 basis points compared to December 31, 2025, primarily due to capital returned to shareholders and the repositioning of the AFS securities portfolio, partially offset by current year earnings, benefits from the RAC loan sale, and a reduction in risk-weighted assets.

Truist declared common dividends of $0.52 per share during the third quarter of 2026 and repurchased $1.2 billion of common stock.

Share Repurchase Activity

Table 26: Share Repurchase Activity

(Dollars in millions, except per share data, shares in thousands)

(1) Excludes commissions.

(2) Excludes excise taxes on share repurchases.

(3) 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.

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Regulatory and Supervisory Updates

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 descriptions below summarize 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. These updates do not summarize all actual, proposed, or possible changes in statutes, regulations, and other laws applicable to Truist and are 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.

On September 30, 2026, the FRB published two final rules on stress testing and related capital requirements. The first final rule enhances transparency and public accountability of the stress testing process by improving disclosures of, and providing opportunity for public comment and input on, the supervisory models and scenarios used in the FRB’s stress tests. The rule also makes several adjustments to the annual stress test calendar and adopts as final most of the models that will be used for the 2027 stress test, subject to a proposed change to the FRB’s noninterest income model. The second final rule sets a new SCB effective date of January 1 of the year following a stress test and modifies the calculation of the SCB to reflect the average of the stress test results from the two most recent stress tests. Truist will receive a new SCB effective on January 1, 2028 based on the results of its 2027 stress test. Beginning with the 2028 stress test, Truist’s SCB will be calculated based on the average projected decline of CET1 ratios across the two most recent FRB stress tests, with effect from January 1, 2029.

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 post-retirement 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.

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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 September 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 September 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 September 30, 2026.

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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 its 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

(Dollars in millions)

(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)

(1) Calculated using the applicable marginal tax rate.

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Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, management of the Company, under the supervision and with the participation of the Company’s CEO and CFO, carried out an evaluation of the effectiveness of the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by the report.

Changes in Internal Control over Financial Reporting

Management of Truist is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) of the Exchange Act. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

There have been no material changes to the risk factors disclosed in Truist’s Annual Report on Form 10-K for the year ended December 31, 2025. Additional risks and uncertainties not currently known to Truist or that management has deemed to be immaterial also may materially adversely affect Truist’s business, financial condition, or operating results.