During this morning's call, they will discuss Truist Financial Corporation's third quarter results, share their perspectives on current business conditions, and provide an updated outlook for the remainder of 2025. The accompanying presentation, as well as our earnings release and supplemental financial information, are available on the Truist Investor Relations website, ir.truist.com. These initiatives include accelerating growth through the addition of new clients and deepening existing 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.

During the third quarter, average loan balances increased 2.5%, as we saw broad-based growth across our wholesale and consumer segments, driven by increased loan production and new client acquisition. Adjusted expenses remain well controlled and were up just 1% late quarter, which, along with a strong revenue performance, helped drive 270 basis points of late quarter positive operating leverage. Finally, we remain in a strong capital position, which allowed us to support our balance sheet growth and return capital to shareholders. During the quarter, we returned $1.2 billion of capital to shareholders through our common stock dividend and the repurchase of $500 million of our common stock.

In summary, our third quarter results were strong as the combination of improved revenue, discipline expense and credit management, and robust capital return drove 130 basis points sequential improvement in our ROTCE to 13.6%. Average loan balances increased 2% late quarter and 7% versus the third quarter of 2024, driven by a significant increase in production. Notably, Gen Z and Millennials represented 63% of this growth, a strong signal that our digital-first approach is resonating with the next generation of Truist clients. In wholesale, I'm encouraged by this quarter's loan growth, improvement in investment banking and trade revenue, and progress in key focus areas like payments and wealth.

What went well
  • Truist reported third quarter net income available to common shareholders of $1.3 billion, or $1.04 per share, reflecting strong execution of strategic growth and profitability initiatives.
  • Adjusted non-interest income increased 9.9% linked quarter to more than $1.5 billion, the best non-interest income quarter since the divestiture of TIH, driven by strong investment banking, trading, and wealth management income.
  • Adjusted expenses were up just 1% linked quarter which, combined with strong revenue, drove 270 basis points of linked-quarter positive operating leverage and a 130 basis point sequential improvement in ROTCE to 13.6%.
  • Average loan balances increased 2.5% with broad-based growth, and investment banking and trading income increased 58% linked quarter to $323 million on strength in debt capital markets and trading.
  • Net charge-offs declined three basis points to 48 basis points and were down seven basis points year-over-year, while the company returned $1.2 billion of capital including $500 million of share repurchases.
  • Year to date the company onboarded twice as many new corporate and commercial clients as the prior year, and wealth AUM from wholesale and premier clients was up 27% versus the prior year.
What went wrong
  • Average deposits decreased $3.9 billion sequentially, or 1%, due to the mid-July withdrawal of $10.9 billion of short-term M&A-related client deposits.
  • Non-performing loans held for investment increased nine basis points linked quarter to 48 basis points, as the prior quarter had benefited from the resolution of several problem loans.
  • Net interest margin declined one basis point linked quarter to 3.01%, and non-accrual C&I loans increased, with First Brands exposure (less than $200 million) captured within the increase.
  • Results included $0.02 per share of restructuring charges primarily related to severance.

Guidance Changes

MetricPeriodCurrent guidance
Share repurchasesQ4 2025approximately $750 million (up)
Share repurchases2026$3 billion-$4 billion (up)
Revenue growth rate2026more than double 2025 (call it 4%+) (up)
Net interest incomeQ4 2025grow approximately 2% linked quarter (up)
Interest-bearing deposit betaQ4 2025mid-40% area (assuming two cuts) (up)
Positive operating leverage2026higher than 2025 (up)
ROTCEFull year 202715% target (up)
CET1 ratio targetEnd of 202710% (n/a)

Performance Breakdown

MetricYoYNote
Adjusted revenue up 3.7% linked quarter 9.9% growth in non-interest income and 1.2% growth in net interest income
Investment banking and trading income up 58% linked quarter to $323 million improved performance with strength in debt capital markets and trading revenue
Wealth management income fees up 7.5% linked quarter higher market values, positive net asset flows, and new client acquisitions
Taxable equivalent net interest income up 1.2% linked quarter ($45 million) one additional day, loan growth, and fixed-rate asset repricing
Adjusted expenses up 2.4% versus Q3 2024 higher personnel expense
Net charge-offs down 7 basis points to 48 basis points lower CRE losses

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
Investment banking and tradingweak first half with April disruptionback to a sustainable level, hitting on a lot of cylinders with strong pipelinesImproving
Deposit beta37% in Q238% in Q3, on track to mid-40% in Q4Improving
NDFI / credit scrutinyn/a11% of total lending, ranked 9th of 11 peers, highly diversified across 20+ asset classes, mostly REITs and asset securitizationStable
Fixed-rate asset repricingtailwindcontinues as a tailwind but a diminishing one with a long tailStable
ROTCE trajectory12.3% prior quarter13.6%, targeting 15% in 2027Improving

Q&A Summary

Can you break out the 2026 revenue growth between spread and fee revenue, and the pace of balance sheet growth?
All cylinders are contributing with continued loan growth at a pace not far off today's, accelerating deposit growth, and continued fee income momentum; management would not expect a remix, but fees are likely to grow faster than NII with both having strong momentum.
What options do you see with deposit pricing now that the Fed is lowering rates, and what gives confidence in growth into next year?
Management feels good about pricing with momentum into Q4 toward a mid-40% beta from the September and October cuts, supported by leading indicators including net new clients, premier production up nearly 30%, treasury management pipelines up double digits, and 60% of new wholesale clients awarding a payments product.
What appropriate efficiency ratio underlies the 15% ROTCE walk?
The efficiency ratio will not be the biggest driver; there will be marginal improvement but the company will not guide or manage to it given significant growth opportunities in CSBB and wholesale, instead being driven by growth, operating leverage, and return.
Where were the drivers in investment banking and trading and what trajectory going forward?
The business is back to a sustainable level hitting on a lot of cylinders with strong pipelines and awarded M&A business for Q4; historically a low double-digit CAGR grower, with optimism rooted in becoming more relevant to clients across FX, derivatives, advisory, and capital markets.
On NDFI exposure, where does the risk rank and is the market right to scrutinize it?
At about 11% of total lending the company ranks ninth of eleven peers, with a highly diversified, granular, underweight portfolio of long-tenured global financial institution relationships across 20 asset classes; management frames it as a client strategy that gets counted as NDFI rather than an NDFI strategy.
Is First Brands' credit impact in the reported quarter or the forward guide?
First Brands is accounted for in non-performing loans in the quarter just reported with the forward guide reflecting net charge-off implications; total exposure is less than $200 million and it is accounted for in the forward guide.

More on Truist Financial Corp

Reported 2025-10-17 · figures from the Truist Financial Corp Q3 2025 earnings call.

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