During this morning's call, they will discuss Truist's Second Quarter results, share their perspectives on current business conditions, and provide an outlook for 2025. The company presentation, as well as our earnings release and supplemental financial information, are available on the Truist Investor Relations website, ir.truist.com. These leaders were attracted to our purpose-driven culture and are already making a meaningful impact, strengthening our presence in key growth markets and expanding our capabilities across high-potential verticals. These initiatives include accelerating growth through the addition of new clients and deepening existing client relationships in areas like payments, wealth, and premier banking.

We're executing our plan while maintaining our expense and credit discipline and returning capital to shareholders. Growth was broad-based across our consumer and wholesale segments and driven by increased loan production and new client acquisition. Growth should also benefit from our expansion efforts in markets where we have a smaller but growing share and from many of the new teammates that have joined our company. This quarter's loan growth helped offset the equity and debt market volatility that occurred early in the quarter.

This volatility impacted trading, capital markets, and M&A activity for the industry, resulting in lower revenue for investment banking and trading businesses. We believe that our investment banking and trading business is well-positioned for a second-half recovery, as we saw steady improvement in overall investment banking revenue in each month during the quarter. Adjusted expenses did come in at the high end of the expected range, but we remain confident in our ability to deliver our 1% expense growth target and positive operating leverage in this year. We also maintain strong asset quality metrics, as both non-performing loans and net charge-offs were down nine basis points late quarter.

What went well
  • Truist reported second quarter net income available to common shareholders of $1.2 billion, or $0.90 per share, reflecting the diversity of its business model and execution of strategic growth initiatives.
  • Average loan balances increased 2% and end-of-period loans increased 3.3%, with broad-based growth across consumer and wholesale segments driven by higher loan production and new client acquisition.
  • Asset quality improved as net charge-offs decreased 9 basis points to 51 basis points and non-performing loans declined on both a linked-quarter and year-over-year basis, reaching multi-quarter lows.
  • Net new checking account growth remained positive with nearly 37,000 new consumer and small business accounts added, attracting younger clients with higher average balances and greater median income.
  • The company returned $1.4 billion of capital to shareholders during the quarter through dividends and $750 million of share repurchases, and received favorable Federal Reserve stress test results with the stress capital buffer expected to be floored at 2.5%.
  • Consumer net charge-offs of 71 basis points reached their lowest level since the third quarter of 2023 while new production spreads remained accretive to the overall portfolio.
What went wrong
  • Investment banking and trading income declined $68 million, or 25% linked quarter, reflecting weaker trading results, lower capital markets activity, and lower M&A volumes during the first half of the quarter.
  • Early in the quarter, the trading business incurred losses driven by market volatility, particularly in April.
  • Adjusted expenses increased 3.1% linked quarter and came in at the high end of the expected range, driven primarily by higher personnel expenses from annual merit increases and strategic hiring.
  • Results included $0.02 per share of restructuring charges related to severance and a $0.01 per share after-tax loss from the sale of $398 million of lower-yielding investment securities.

Guidance Changes

MetricPeriodCurrent guidance
Share repurchasesQ3 2025approximately $500 million (down)
Interest-bearing deposit betaEnd of 2025mid-40% area (assuming two rate cuts) (up)
Fixed rate asset repricingRemainder of 2025approximately $27 billion of fixed rate loans and securities to reprice (n/a)
Net interest marginOver timethree-teens area achievable (up)
Expense growthFull year 20251% expense growth target with positive operating leverage (reaffirmed)

Performance Breakdown

MetricYoYNote
Adjusted revenue up 2.1% linked quarter 2.3% growth in net interest income and 1.8% growth in non-interest income
Taxable equivalent net interest income up 2.3% linked quarter ($80 million) loan growth, fixed rate asset repricing, and one additional day in the quarter
Net charge-offs down 7 basis points versus Q2 2024 to 51 basis points lower consumer and CRE losses
Adjusted non-interest income down 1.4% versus Q2 2024 lower investment banking and trading income and lower wealth management income from the sale of Sterling Capital Management
Average deposits up 2.1% sequentially growth in interest checking, time deposits, and non-interest-bearing demand, plus $10.9 billion of short-term client deposits

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
Investment banking and trading recoverytrading losses and weak banking in AprilMay improved, June and July normalized; optimistic on second-half recoveryImproving
Merger integrationlonger and deeper J-curve than anticipatedintegration fully behind the company; on the accelerant part of the J-curveImproving
Deposit beta43% cumulative interest-bearing betadeclined to 37% on a linked-quarter basisImproving
Capital position and CET1n/a11% stated, 9.3% adjusted for AOCI; gliding toward 10% target areaStable

Q&A Summary

Why did the anticipated pace of repurchases step down for the third quarter, and what are broader capital management ambitions given the lower SCB?
The $750 million in Q2 versus $500 million target was opportunistic given attractive share pricing; a return to $500 million is reasonable for the medium term as the company prioritizes the banking franchise first and capital return second, gliding toward a roughly 10% CET1 target area.
What do you expect for deposit costs from here ahead of any rate cuts, given competition and loan growth funding?
Management is pleased with deposit franchise performance, expects balances slightly lower in Q3 after losing the $10.9 billion temporary deposits, but anticipates making up ground on pricing with betas moving toward 40% and reaching a mid-40s beta by year-end assuming two cuts.
Is positive operating leverage back-half loaded, and do you need a pickup in fee revenue to narrow the gap to a 15% ROTCE?
Improved profitability will come from a variety of factors including capital-efficient revenue, deepening with clients, margin improvement from fixed rate asset repricing, and smart growth; it is a continuous improvement story rather than overnight.
How should we think about a normalized NIM and how long to get there?
Management is not sure there is a normalized level but expects continued improvement in a normal operating environment, viewing a three-teens area as a reasonable expectation over a longer period as the balance sheet rolls up the curve.
If there are no rate cuts, can you still hit the revenue range and positive operating leverage for the year?
Management believes it could, noting the answer depends on the shape of the curve; with stable rates the forces would offset, and most rate impact is already embedded for this year given late-year cut assumptions, making curve shape the bigger factor.
What is driving the generally strong credit results this quarter?
The company continues to see signs of stabilization and resilience, with increased certainty helping; CRE is largely behind them, teams performed strongly, and the guide was revised to a 55%-60% range while watching consumer confidence, spending, and cost pressures.

More on Truist Financial Corp

Reported 2025-07-18 · figures from the Truist Financial Corp Q2 2025 earnings call.

See how Top Bucket AI works for your firm

Request Demo
Top Bucket AI Research

Stay ahead of private markets

Research and market intelligence for private-markets professionals.

✓

You're subscribed.

Thanks for signing up.