Item 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

TRUIST FINANCIAL CORPORATION AND SUBSIDIARIES

Unaudited (Dollars in millions, except per share data, shares in thousands)			Mar 31, 2022						Dec 31, 2021
Assets
Cash and due from banks			$	5,516					$	5,085
Interest-bearing deposits with banks			23,606						15,210
Securities borrowed or purchased under agreements to resell			2,322						4,028
Trading assets at fair value			5,920						4,423
AFS securities at fair value			84,753						153,123
HTM securities (fair value of $59,124 and $1,495 at fair value, respectively)			61,662						1,494
LHFS (including $3,364 and $3,544 at fair value, respectively)			4,167						4,812
Loans and leases (including $21 and $23 at fair value, respectively)			290,081						289,513
ALLL			(4,170)						(4,435)
Loans and leases, net of ALLL			285,911						285,078
Premises and equipment			3,662						3,700
Goodwill			26,284						26,098
CDI and other intangible assets			3,693						3,408
Loan servicing rights at fair value			3,013						2,633
Other assets (including $3,137 and $3,436 at fair value, respectively)			33,470						32,149
Total assets			$	543,979					$	541,241
Liabilities
Noninterest-bearing deposits			$	150,446					$	145,892
Interest-bearing deposits			277,882						270,596
Short-term borrowings (including $1,717 and $1,731 at fair value, respectively)			5,147						5,292
Long-term debt			33,773						35,913
Other liabilities (including $1,482 and $586 at fair value, respectively)			11,687						14,277
Total liabilities			478,935						471,970
Shareholders’ Equity
Preferred stock			6,673						6,673
Common stock, $5 par value			6,657						6,639
Additional paid-in capital			34,539						34,565
Retained earnings			23,687						22,998
AOCI, net of deferred income taxes			(6,535)						(1,604)
Noncontrolling interests			23						—
Total shareholders’ equity			65,044						69,271
Total liabilities and shareholders’ equity			$	543,979					$	541,241
Common shares outstanding			1,331,414						1,327,818
Common shares authorized			2,000,000						2,000,000
Preferred shares outstanding			223						223
Preferred shares authorized			5,000						5,000

The accompanying notes are an integral part of these consolidated financial statements.

4 Truist Financial Corporation

CONSOLIDATED STATEMENTS OF INCOME

TRUIST FINANCIAL CORPORATION AND SUBSIDIARIES

Unaudited (Dollars in millions, except per share data, shares in thousands)						Three Months Ended March 31,
			2022						2021
Interest Income
Interest and fees on loans and leases						$	2,644					$	3,002
Interest on securities						640						443
Interest on other earning assets						73						49
Total interest income						3,357						3,494
Interest Expense
Interest on deposits						32						47
Interest on long-term debt						132						148
Interest on other borrowings						10						14
Total interest expense						174						209
Net Interest Income						3,183						3,285
Provision for credit losses						(95)						48
Net Interest Income After Provision for Credit Losses						3,278						3,237
Noninterest Income
Insurance income						727						626
Investment banking and trading income						261						346
Wealth management income						343						341
Service charges on deposits						252						258
Card and payment related fees						212						200
Residential mortgage income						89						100
Lending related fees						85						100
Operating lease income						58						68
Commercial mortgage income						32						33
Income from bank-owned life insurance						51						50
Securities gains (losses)						(69)						—
Other income						101						75
Total noninterest income						2,142						2,197
Noninterest Expense
Personnel expense						2,051						2,142
Professional fees and outside processing						363						350
Software expense						232						210
Net occupancy expense						208						209
Amortization of intangibles						137						144
Equipment expense						118						113
Marketing and customer development						84						66
Operating lease depreciation						48						50
Loan-related expense						44						54
Regulatory costs						35						25
Merger-related and restructuring charges						216						141
Loss (gain) on early extinguishment of debt						—						(3)
Other expense						138						109
Total noninterest expense						3,674						3,610
Earnings
Income before income taxes						1,746						1,824
Provision for income taxes						330						351
Net income						1,416						1,473
Noncontrolling interests						1						(4)
Net income available to the bank holding company						1,415						1,477
Preferred stock dividends and other						88						143
Net income available to common shareholders						$	1,327					$	1,334
Basic EPS						$	1.00					$	0.99
Diluted EPS						0.99						0.98
Basic weighted average shares outstanding						1,329,037						1,345,666
Diluted weighted average shares outstanding						1,341,563						1,358,932

The accompanying notes are an integral part of these consolidated financial statements.

Truist Financial Corporation 5

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

TRUIST FINANCIAL CORPORATION AND SUBSIDIARIES

Unaudited (Dollars in millions)			Three Months Ended March 31,
2022						2021
Net income			$	1,416					$	1,473
OCI, net of tax:
Net change in net pension and postretirement costs			8						35
Net change in cash flow hedges			5						36
Net change in AFS securities			(4,989)						(2,304)
Net change in HTM securities			44						—
Other, net			1						1
Total OCI, net of tax			(4,931)						(2,232)
Total comprehensive income			$	(3,515)					$	(759)
Income Tax Effect of Items Included in OCI:
Net change in net pension and postretirement costs			$	2					$	11
Net change in cash flow hedges			1						11
Net change in AFS securities			(1,513)						(707)
Net change in HTM securities			13						—
Other, net			—						—
Total income taxes related to OCI			$	(1,497)					$	(685)

The accompanying notes are an integral part of these consolidated financial statements.

6 Truist Financial Corporation

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

TRUIST FINANCIAL CORPORATION AND SUBSIDIARIES

Unaudited (Dollars in millions, shares in thousands)			Shares of Common Stock						Preferred Stock						Common Stock						Additional Paid-In Capital						Retained Earnings						AOCI						Noncontrolling Interests						Total Shareholders’ Equity
Balance, January 1, 2021			1,348,961						$	8,048					$	6,745					$	35,843					$	19,455					$	716					$	105					$	70,912
Net income			—						—						—						—						1,477						—						(4)						1,473
OCI			—						—						—						—						—						(2,232)						—						(2,232)
Issued in connection with equity awards, net			5,388						—						27						(111)						—						—						—						(84)
Repurchase of common stock			(9,504)						—						(48)						(458)						—						—						—						(506)
Redemption of preferred stock			—						(924)						—						—						(26)						—						—						(950)
Cash dividends declared on common stock			—						—						—						—						(605)						—						—						(605)
Cash dividends declared on preferred stock			—						—						—						—						(117)						—						—						(117)
Equity-based compensation expense			—						—						—						86						—						—						—						86
Other, net			—						—						—						—						—						—						(101)						(101)
Balance, March 31, 2021			1,344,845						$	7,124					$	6,724					$	35,360					$	20,184					$	(1,516)					$	—					$	67,876
Balance, January 1, 2022			1,327,818						$	6,673					$	6,639					$	34,565					$	22,998					$	(1,604)					$	—					$	69,271
Net income			—						—						—						—						1,415						—						1						1,416
OCI			—						—						—						—						—						(4,931)						—						(4,931)
Issued in connection with equity awards, net			3,596						—						18						(106)						(1)						—						—						(89)
Cash dividends declared on common stock			—						—						—						—						(637)						—						—						(637)
Cash dividends declared on preferred stock			—						—						—						—						(88)						—						—						(88)
Equity-based compensation expense			—						—						—						80						—						—						—						80
Other, net			—						—						—						—						—						—						22						22
Balance, March 31, 2022			1,331,414						$	6,673					$	6,657					$	34,539					$	23,687					$	(6,535)					$	23					$	65,044

The accompanying notes are an integral part of these consolidated financial statements.

Truist Financial Corporation 7

CONSOLIDATED STATEMENTS OF CASH FLOWS

TRUIST FINANCIAL CORPORATION AND SUBSIDIARIES

Unaudited (Dollars in millions)						Three Months Ended March 31,
			2022						2021
Cash Flows From Operating Activities:
Net income						$	1,416					$	1,473
Adjustments to reconcile net income to net cash from operating activities:
Provision for credit losses						(95)						48
Depreciation						195						201
Amortization of intangibles						137						144
Securities (gains) losses						69						—
Net change in operating assets and liabilities:
LHFS						180						(510)
Loan servicing rights						(380)						(342)
Pension asset						(410)						(452)
Derivative assets and liabilities						986						1,060
Trading assets						(1,497)						(1,222)
Other assets and other liabilities						(558)						(915)
Other, net						(231)						482
Net cash from operating activities						(188)						(33)
Cash Flows From Investing Activities:
Proceeds from sales of AFS securities						3,127						60
Proceeds from maturities, calls and paydowns of AFS securities						5,259						8,862
Purchases of AFS securities						(7,219)						(15,601)
Proceeds from maturities, calls and paydowns of HTM securities						857						—
Purchases of HTM securities						(3,020)						—
Originations and purchases of loans and leases, net of sales and principal collected						(134)						8,249
Net cash received (paid) for securities borrowed or purchased under agreements to resell						1,706						396
Net cash received (paid) for asset acquisitions, business combinations, and divestitures						(488)						1,130
Other, net						(122)						23
Net cash from investing activities						(34)						3,119
Cash Flows From Financing Activities:
Net change in deposits						11,842						14,489
Net change in short-term borrowings						(145)						(203)
Proceeds from issuance of long-term debt						66						1,299
Repayment of long-term debt						(1,699)						(3,032)
Repurchase of common stock						—						(506)
Redemption of preferred stock						—						(950)
Cash dividends paid on common stock						(637)						(605)
Cash dividends paid on preferred stock						(88)						(117)
Net cash received (paid) for hedge unwinds						(198)						—
Other, net						(92)						(197)
Net cash from financing activities						9,049						10,178
Net Change in Cash and Cash Equivalents						8,827						13,264
Cash and Cash Equivalents, January 1						20,295						18,868
Cash and Cash Equivalents, March 31						$	29,122					$	32,132
Supplemental Disclosure of Cash Flow Information:
Net cash paid (received) during the period for:
Interest expense						$	156					$	248
Income taxes						40						28
Noncash investing activities:
Transfer of AFS securities to HTM						59,436						—

The accompanying notes are an integral part of these consolidated financial statements.

8 Truist Financial Corporation

NOTE 1. Basis of Presentation

General

See the Glossary of Defined Terms at the beginning of this Report for terms used herein. These consolidated financial statements and notes are presented in accordance with the instructions for Form 10-Q, and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations, and cash flow activity required in accordance with GAAP. In the opinion of management, all normal recurring adjustments necessary for a fair statement of the consolidated financial position and consolidated results of operations have been made. The year-end consolidated balance sheet data was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. The information contained in the financial statements and notes included in the Annual Report on Form 10-K for the year ended December 31, 2021 should be referred to in connection with these unaudited interim consolidated financial statements. There were no significant changes to the Company’s accounting policies from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2021 that could have a material effect on the Company’s financial statements.

Reclassifications

Certain amounts reported in prior periods’ consolidated financial statements have been reclassified to conform to the current presentation.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change include the determination of the ACL; determination of fair value for securities, MSRs, LHFS, trading loans, and derivative assets and liabilities; goodwill and other intangible assets; income taxes; and pension and postretirement benefit obligations.

Changes in Accounting Principles and Effects of New Accounting Pronouncements

Standard / Adoption Date			Description			Effects on the Financial Statements
Standards Not Yet Adopted
Troubled Debt Restructurings and Vintage Disclosures January 1, 2023			Eliminates the accounting guidance for TDRs, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors made to borrowers experiencing financial difficulty. Additionally, requires disclosure of current-period gross write-offs by year of origination for financing receivables and net investment in leases.			Truist is evaluating this standard. Upon adoption, Truist expects the newly required disclosures to be included in the Loans and ACL footnote.
Fair Value Hedging – Portfolio Layer Method January 1, 2023			Introduces the portfolio layer method, which expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method (previously named, last-of-layer method). Additionally, expands the scope of the portfolio layer method to include non-prepayable assets, specifies eligible hedging instruments in a single-layer hedge, provides additional guidance on the accounting for and disclosure of hedge basis adjustments under the portfolio layer method, and specifies how hedge basis adjustments should be considered when determining credit losses for the assets included in the closed portfolio.			Truist is evaluating the use of the portfolio layer method in its hedging programs.

Truist Financial Corporation 9

NOTE 2. Business Combinations

On March 1, 2022, Truist acquired Kensington Vanguard National Land Services, one of the country's largest independent full-service national title insurance agencies, which resulted in approximately $187 million of goodwill and $148 million of identifiable intangible assets in the IH segment. Fair value estimates related to the acquired assets and liabilities are subject to adjustment during the one-year measurement period following the closing of the acquisition. The intangible assets are being amortized over a term of 15 years based upon the estimated economic benefits received. Goodwill of $129 million and identifiable intangible assets of $110 million are deductible for tax purposes.

NOTE 3. Securities Financing Activities

Securities purchased under agreements to resell are primarily collateralized by U.S. government or agency securities and are carried at the amounts at which the securities will be subsequently sold, plus accrued interest. Securities borrowed are primarily collateralized by corporate securities. The Company borrows securities and purchases securities under agreements to resell as part of its securities financing activities. On the acquisition date of these securities, the Company and the related counterparty agree on the amount of collateral required to secure the principal amount loaned under these arrangements. The Company monitors collateral values daily and calls for additional collateral to be provided as warranted under the respective agreements. The following table presents securities borrowed or purchased under agreements to resell:

(Dollars in millions)						Mar 31, 2022						Dec 31, 2021
Securities purchased under agreements to resell						$	1,678					$	3,460
Securities borrowed						644						568
Total securities borrowed or purchased under agreements to resell						$	2,322					$	4,028
Fair value of collateral held available to be resold or repledged						$	2,316					$	4,005
Fair value of securities repledged						342						1,141

For securities sold under agreements to repurchase, the Company would be obligated to provide additional collateral in the event of a significant decline in fair value of the collateral pledged. This risk is managed by monitoring the liquidity and credit quality of the collateral, as well as the maturity profile of the transactions. Refer to “Note 14. Commitments and Contingencies” for additional information related to pledged securities. The following table presents the Company’s related activity, by collateral type and remaining contractual maturity:

			March 31, 2022																		December 31, 2021
(Dollars in millions)			Overnight and Continuous						Up to 30 days												Total						Overnight and Continuous						Up to 30 days												Total
U.S. Treasury			$	439					$	41											$	480					$	749					$	409											$	1,158
GSE			81						31												112						53						25												78
Agency MBS - residential			973						338												1,311						720						141												861
Corporate and other debt securities			150						314												464						213						125												338
Total securities sold under agreements to repurchase			$	1,643					$	724											$	2,367					$	1,735					$	700											$	2,435

There were no securities financing transactions subject to legally enforceable master netting arrangements that were eligible for balance sheet netting for the periods presented.

10 Truist Financial Corporation

NOTE 4. Investment Securities

The following tables summarize the Company’s AFS and HTM securities:

March 31, 2022 (Dollars in millions)						Amortized Cost						Gross Unrealized												Fair Value
						Gains						Losses
AFS securities:
U.S. Treasury						$	9,891					$	—					$	479					$	9,412
GSE						257						—						12						245
Agency MBS - residential						71,956						37						3,755						68,238
Agency MBS - commercial						2,831						2						174						2,659
States and political subdivisions						366						19						15						370
Non-agency MBS						4,149						—						346						3,803
Other						26						—						—						26
Total AFS securities						$	89,476					$	58					$	4,781					$	84,753
HTM securities:
Agency MBS - residential						$	61,662					$	—					$	2,538					$	59,124
December 31, 2021 (Dollars in millions)						Amortized Cost						Gross Unrealized												Fair Value
						Gains						Losses
AFS securities:
U.S. Treasury						$	9,892					$	9					$	106					$	9,795
GSE						1,667						33						2						1,698
Agency MBS - residential						135,886						656						2,500						134,042
Agency MBS - commercial						2,928						18						64						2,882
States and political subdivisions						382						39						1						420
Non-agency MBS						4,305						—						47						4,258
Other						28						—						—						28
Total AFS securities						$	155,088					$	755					$	2,720					$	153,123
HTM securities:
Agency MBS - residential						$	1,494					$	1					$	—					$	1,495

In the first quarter of 2022, Truist transferred $59.4 billion of AFS securities to HTM as the Company continues to execute upon its asset-liability management strategies. Management determined that it has both the positive intent and ability to hold these securities to maturity. On the date of transfer, the difference between the par value and the fair value of these securities, which was recorded as a loss in AOCI, resulted in a net discount of $3.7 billion, inclusive of $510 million of basis adjustment gains from terminated fair value hedges attributable to the transferred securities. The discount will be accreted and unrealized loss in AOCI will be amortized, offsetting within interest income over the remaining life of the securities using the interest method. There were no gains or losses recognized as a result of this transfer.

Certain MBS securities issued by FNMA and FHLMC exceeded 10% of shareholders’ equity at March 31, 2022. The FNMA investments had total amortized cost and fair value of $45.2 billion and $43.0 billion, respectively. The FHLMC investments had total amortized cost and fair value of $45.7 billion and $43.4 billion, respectively.

The amortized cost and estimated fair value of the securities portfolio by contractual maturity are shown in the following table. The expected life of MBS may be shorter than the contractual maturities because borrowers may have the right to prepay their obligations with or without penalties.

			Amortized Cost																														Fair Value
March 31, 2022 (Dollars in millions)			Due in one year or less						Due after one year through five years						Due after five years through ten years						Due after ten years						Total						Due in one year or less						Due after one year through five years						Due after five years through ten years						Due after ten years						Total
AFS securities:
U.S. Treasury			$	309					$	8,602					$	980					$	—					$	9,891					$	307					$	8,188					$	917					$	—					$	9,412
GSE			—						—						—						257						257						—						—						—						245						245
Agency MBS - residential			—						1						633						71,322						71,956						—						1						624						67,613						68,238
Agency MBS - commercial			—						8						15						2,808						2,831						—						8						14						2,637						2,659
States and political subdivisions			15						76						124						151						366						15						76						129						150						370
Non-agency MBS			—						—						—						4,149						4,149						—						—						—						3,803						3,803
Other			—						6						—						20						26						—						6						—						20						26
Total AFS securities			$	324					$	8,693					$	1,752					$	78,707					$	89,476					$	322					$	8,279					$	1,684					$	74,468					$	84,753
HTM securities:
Agency MBS - residential			$	—					$	—					$	—					$	61,662					$	61,662					$	—					$	—					$	—					$	59,124					$	59,124

Truist Financial Corporation 11

The following tables present the fair values and gross unrealized losses of investments based on the length of time that individual securities have been in a continuous unrealized loss position:

			Less than 12 months												12 months or more												Total
March 31, 2022 (Dollars in millions)			Fair Value						Unrealized Losses						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses
AFS securities:
U.S. Treasury			$	8,793					$	431					$	602					$	48					$	9,395					$	479
GSE			209						12						—						—						209						12
Agency MBS - residential			54,565						2,940						9,386						815						63,951						3,755
Agency MBS - commercial			909						40						1,672						134						2,581						174
States and political subdivisions			206						13						21						2						227						15
Non-agency MBS			3,803						346						—						—						3,803						346
Other			21						—						—						—						21						—
Total			$	68,506					$	3,782					$	11,681					$	999					$	80,187					$	4,781
HTM securities:
Agency MBS - residential			$	39,486					$	1,388					$	19,638					$	1,150					$	59,124					$	2,538
			Less than 12 months												12 months or more												Total
December 31, 2021 (Dollars in millions)			Fair Value						Unrealized Losses						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses
AFS securities:
U.S. Treasury			$	8,412					$	88					$	582					$	18					$	8,994					$	106
GSE			104						2						—						—						104						2
Agency MBS - residential			101,262						2,377						2,638						123						103,900						2,500
Agency MBS - commercial			1,749						50						413						14						2,162						64
States and political subdivisions			—						—						22						1						22						1
Non-agency MBS			4,258						47						—						—						4,258						47
Other			6						—						—						—						6						—
Total			$	115,791					$	2,564					$	3,655					$	156					$	119,446					$	2,720

At March 31, 2022 and December 31, 2021, no ACL was established for AFS or HTM securities. Substantially all of the unrealized losses on the securities portfolio, including non-agency MBS, were the result of changes in market interest rates compared to the date the securities were acquired rather than the credit quality of the issuers or underlying loans. HTM debt securities consists of residential agency MBS. Accordingly, the Company does not expect to incur any credit losses on HTM investment securities.

The following table presents gross securities gains and losses recognized in earnings:

(Dollars in millions)						Three Months Ended March 31,
			2022						2021
Gross realized gains						$	13					$	—
Gross realized losses						(82)						—
Securities gains (losses), net						$	(69)					$	—

12 Truist Financial Corporation

NOTE 5. Loans and ACL

The following tables present loans and leases HFI by aging category. Government guaranteed loans are not placed on nonperforming status regardless of delinquency because collection of principal and interest is reasonably assured. The past due status of loans that received a deferral under the CARES Act is generally frozen during the deferral period. In certain limited circumstances, accommodation programs result in the delinquency status being reset to current.

						Accruing
March 31, 2022 (Dollars in millions)						Current						30-89 Days Past Due						90 Days Or More Past Due (1)						Nonperforming						Total
Commercial:
Commercial and industrial						$	140,428					$	280					$	22					$	330					$	141,060
CRE						22,734						13						—						27						22,774
Commercial construction						5,219						1						—						—						5,220
Consumer:
Residential mortgage						46,287						542						1,027						315						48,171
Residential home equity and direct						24,558						142						12						141						24,853
Indirect auto						24,999						529						1						227						25,756
Indirect other						10,972						65						2						4						11,043
Student						5,210						482						822						—						6,514
Credit card						4,615						47						28						—						4,690
Total						$	285,022					$	2,101					$	1,914					$	1,044					$	290,081
(1)Includes government guaranteed loans of $996 million in the residential mortgage portfolio and $818 million in the student portfolio.
						Accruing
December 31, 2021 (Dollars in millions)						Current						30-89 Days Past Due						90 Days Or More Past Due (1)						Nonperforming						Total
Commercial:
Commercial and industrial						$	138,225					$	130					$	13					$	394					$	138,762
CRE						23,902						20						—						29						23,951
Commercial construction						4,962						2						—						7						4,971
Consumer:
Residential mortgage						46,033						514						1,009						296						47,852
Residential home equity and direct						24,809						107						9						141						25,066
Indirect auto						25,615						607						1						218						26,441
Indirect other						10,811						64						3						5						10,883
Student						5,357						555						868						—						6,780
Credit card						4,735						45						27						—						4,807
Total						$	284,449					$	2,044					$	1,930					$	1,090					$	289,513
(1)Includes government guaranteed loans of $978 million in the residential mortgage portfolio and $864 million in the student portfolio.

Truist Financial Corporation 13

The following tables present the amortized cost basis of loans by origination year and credit quality indicator:

March 31, 2022 (Dollars in millions)			Amortized Cost Basis by Origination Year																																				Revolving Credit						Loans Converted to Term						Other (1)
2022						2021						2020						2019						2018						Prior															Total
Commercial:
Commercial and industrial:
Pass			$	10,993					$	30,955					$	15,100					$	11,947					$	7,874					$	13,160					$	46,584					$	—					$	(65)					$	136,548
Special mention			104						227						303						212						279						100						530						—						—						1,755
Substandard			98						334						361						375						238						256						765						—						—						2,427
Nonperforming			4						42						11						62						10						43						158						—						—						330
Total			11,199						31,558						15,775						12,596						8,401						13,559						48,037						—						(65)						141,060
CRE:
Pass			971						4,396						2,744						4,951						3,093						3,405						882						—						(50)						20,392
Special mention			9						37						93						140						164						99						—						—						—						542
Substandard			64						212						207						463						450						417						—						—						—						1,813
Nonperforming			1						1						1						11						1						12						—						—						—						27
Total			1,045						4,646						3,045						5,565						3,708						3,933						882						—						(50)						22,774
Commercial construction:
Pass			417						1,219						1,124						896						346						164						832						—						—						4,998
Special mention			4						—						14						66						—						—						—						—						—						84
Substandard			1						4						22						33						61						17						—						—						—						138
Nonperforming			—						—						—						—						—						—						—						—						—						—
Total			422						1,223						1,160						995						407						181						832						—						—						5,220
Consumer:
Residential mortgage:
Current			$	2,066					$	17,749					$	6,519					$	3,238					$	1,621					$	15,094					$	—					$	—					$	—					$	46,287
30 - 89 days past due			10						66						43						35						35						353						—						—						—						542
90 days or more past due			1						4						52						93						128						749						—						—						—						1,027
Nonperforming			—						4						7						21						27						256						—						—						—						315
Total			2,077						17,823						6,621						3,387						1,811						16,452						—						—						—						48,171
Residential home equity and direct:
Current			1,481						4,361						2,268						1,447						560						476						10,534						3,446						(15)						24,558
30 - 89 days past due			1						12						8						9						3						4						67						38						—						142
90 days or more past due			—						1						—						—						—						—						6						5						—						12
Nonperforming			—						3						3						4						1						7						42						81						—						141
Total			1,482						4,377						2,279						1,460						564						487						10,649						3,570						(15)						24,853
Indirect auto:
Current			2,369						9,794						5,938						3,775						1,860						1,263						—						—						—						24,999
30 - 89 days past due			5						139						116						116						75						78						—						—						—						529
90 days or more past due			—						1						—						—						—						—						—						—						—						1
Nonperforming			—						42						51						60						39						35						—						—						—						227
Total			2,374						9,976						6,105						3,951						1,974						1,376						—						—						—						25,756
Indirect other:
Current			1,433						3,869						2,405						1,424						812						1,029						—						—						—						10,972
30 - 89 days past due			2						18						16						13						8						8						—						—						—						65
90 days or more past due			—						1						1						—						—						—						—						—						—						2
Nonperforming			—						—						—						3						—						1						—						—						—						4
Total			1,435						3,888						2,422						1,440						820						1,038						—						—						—						11,043
Student:
Current			—						—						20						82						66						5,041						—						—						1						5,210
30 - 89 days past due			—						—						—						—						1						481						—						—						—						482
90 days or more past due			—						—						—						—						1						821						—						—						—						822
Total			—						—						20						82						68						6,343						—						—						1						6,514
Credit card:
Current																																							4,591						21						3						4,615
30 - 89 days past due																																							45						2						—						47
90 days or more past due																																							27						1						—						28
Total			—						—						—						—						—						—						4,663						24						3						4,690
Total			$	20,034					$	73,491					$	37,427					$	29,476					$	17,753					$	43,369					$	65,063					$	3,594					$	(126)					$	290,081

14 Truist Financial Corporation

December 31, 2021 (Dollars in millions)			Amortized Cost Basis by Origination Year																																				Revolving Credit						Loans Converted to Term						Other (1)
2021						2020						2019						2018						2017						Prior															Total
Commercial:
Commercial and industrial:
Pass			$	35,530					$	17,430					$	14,105					$	8,994					$	5,633					$	9,424					$	43,035					$	—					$	(169)					$	133,982
Special mention			195						221						326						317						46						70						691						—						—						1,866
Substandard			352						356						395						197						91						335						794						—						—						2,520
Nonperforming			50						19						49						42						16						34						184						—						—						394
Total			36,127						18,026						14,875						9,550						5,786						9,863						44,704						—						(169)						138,762
CRE:
Pass			4,836						2,946						5,109						3,201						1,774						2,131						762						—						(61)						20,698
Special mention			13						118						483						247						44						83						—						—						—						988
Substandard			321						264						523						528						321						279						—						—						—						2,236
Nonperforming			1						1						11						—						9						7						—						—						—						29
Total			5,171						3,329						6,126						3,976						2,148						2,500						762						—						(61)						23,951
Commercial construction:
Pass			1,113						1,179						1,259						419						44						95						558						—						12						4,679
Special mention			—						14						72						50						—						—						—						—						—						136
Substandard			7						13						45						67						17						—						—						—						—						149
Nonperforming			—						—						1						—						5						—						—						—						1						7
Total			1,120						1,206						1,377						536						66						95						558						—						13						4,971
Consumer:
Residential mortgage:
Current			17,271						6,798						3,642						1,753						2,237						14,240						—						—						92						46,033
30 - 89 days past due			58						31						32						40						31						322						—						—						—						514
90 or more days past due			3						44						91						133						95						643						—						—						—						1,009
Nonperforming			1						5						18						27						20						226						—						—						(1)						296
Total			17,333						6,878						3,783						1,953						2,383						15,431						—						—						91						47,852
Residential home equity and direct:
Current			4,962						2,630						1,717						691						189						425						10,757						3,388						50						24,809
30 - 89 days past due			8						8						10						3						1						3						53						21						—						107
90 days or more past due			—						—						—						—						—						—						5						4						—						9
Nonperforming			2						3						4						1						—						7						48						75						1						141
Total			4,972						2,641						1,731						695						190						435						10,863						3,488						51						25,066
Indirect auto:
Current			10,699						6,691						4,293						2,158						1,081						504						—						—						189						25,615
30 - 89 days past due			119						138						145						97						56						52						—						—						—						607
90 days or more past due			—						—						—						—						—						1						—						—						—						1
Nonperforming			28						48						61						41						21						19						—						—						—						218
Total			10,846						6,877						4,499						2,296						1,158						576						—						—						189						26,441
Indirect other:
Current			4,333						2,724						1,638						937						455						691						—						—						33						10,811
30 - 89 days past due			14						15						15						12						4						4						—						—						—						64
90 days or more past due			1						1						1						—						—						—						—						—						—						3
Nonperforming			1						1						1						—						—						2						—						—						—						5
Total			4,349						2,741						1,655						949						459						697						—						—						33						10,883
Student:
Current			—						21						88						73						61						5,122						—						—						(8)						5,357
30 - 89 days past due			—						—						1						1						1						552						—						—						—						555
90 days or more past due			—						—						—						—						1						867						—						—						—						868
Total			—						21						89						74						63						6,541						—						—						(8)						6,780
Credit card:
Current																																							4,711						24						—						4,735
30 - 89 days past due																																							43						2						—						45
90 days or more past due																																							26						1						—						27
Total			—						—						—						—						—						—						4,780						27						—						4,807
Total			$	79,918					$	41,719					$	34,135					$	20,029					$	12,253					$	36,138					$	61,667					$	3,515					$	139					$	289,513

(1)Includes certain deferred fees and costs, unapplied payments, and other adjustments.

Truist Financial Corporation 15

ACL

The following tables present activity in the ACL:

(Dollars in millions)						Balance at Jan 1, 2021						Charge-Offs						Recoveries						Provision (Benefit)						Other (1)						Balance at Mar 31, 2021
Commercial:
Commercial and industrial						$	2,204					$	(79)					$	19					$	(8)					$	—					$	2,136
CRE						573						(4)						1						(26)						—						544
Commercial construction						81						(2)						1						(3)						—						77
Consumer:
Residential mortgage						368						(11)						2						(16)						—						343
Residential home equity and direct						714						(55)						18						30						—						707
Indirect auto						1,198						(105)						22						61						—						1,176
Indirect other						208						(17)						6						(10)						—						187
Student						130						(3)						—						2						2						131
Credit card						359						(40)						9						33						—						361
ALLL						5,835						(316)						78						63						2						5,662
RUFC						364						—						—						(15)						—						349
ACL						$	6,199					$	(316)					$	78					$	48					$	2					$	6,011
(Dollars in millions)						Balance at Jan 1, 2022						Charge-Offs						Recoveries						Provision (Benefit)						Other (1)						Balance at Mar 31, 2022
Commercial:
Commercial and industrial						$	1,426					$	(31)					$	17					$	(93)					$	—					$	1,319
CRE						350						(1)						1						(67)						—						283
Commercial construction						52						(1)						1						1						—						53
Consumer:
Residential mortgage						308						(2)						6						(2)						—						310
Residential home equity and direct						615						(58)						20						(3)						—						574
Indirect auto						1,022						(102)						23						14						—						957
Indirect other						195						(19)						6						29						—						211
Student						117						(6)						—						3						1						115
Credit card						350						(41)						9						30						—						348
ALLL						4,435						(261)						83						(88)						1						4,170
RUFC						260						—						—						(7)						—						253
ACL						$	4,695					$	(261)					$	83					$	(95)					$	1					$	4,423

(1)Includes the amounts for the ALLL for PCD acquisitions, and other activity.

The commercial ALLL decreased $173 million and the consumer ALLL decreased $90 million for the three months ended March 31, 2022. The decrease reflects a continued favorable credit environment tempered by uncertainty associated with inflation, supply chain disruption, rising rates, and geopolitical events.

The RUFC decreased $7 million for the three months ended March 31, 2022. The decrease reflects a continued favorable credit environment.

The quantitative models have been designed to estimate losses using macro-economic forecasts over a reasonable and supportable forecast period of two years, followed by a reversion to long-term historical loss conditions over a one-year period. These macro-economic forecasts include a number of key economic variables utilized in loss forecasting that include, but are not limited to, unemployment trends, US real GDP, corporate credit spreads, rental rates, property values, the primary 30-year mortgage rate, home price indices, and used car prices.

The primary economic forecast incorporates a third-party baseline forecast that is adjusted to reflect Truist’s interest rate outlook. Management also considers optimistic and pessimistic third-party macro-economic forecasts in order to capture uncertainty in the economic environment. These forecasts, along with the primary economic forecast, are weighted 40% baseline, 30% optimistic, and 30% pessimistic in the March 31, 2022 ACL, unchanged since December 31, 2021. The primary economic forecast shaping the ACL estimate at March 31, 2022 included GDP growth in the mid-single digits followed by a decline to the low-single digits through the end of 2022 and an unemployment rate starting in the low-single digits with improvement through the end of the reasonable and supportable period.

16 Truist Financial Corporation

Quantitative models have certain limitations with respect to estimating expected losses, particularly in times of rapidly changing macro-economic conditions and forecasts. As a result, management believes that the qualitative component of the ACL, which incorporates management’s expert judgment related to expected future credit losses, will continue to be an important component of the ACL for the foreseeable future. The March 31, 2022 ACL estimate includes adjustments to consider the impact of current and expected events or risks not captured by the loss forecasting models, the outcomes of which are uncertain and may not be completely considered by quantitative models. Refer to “Note 1. Basis of Presentation” in Truist’s Annual Report on Form 10-K for the year ended December 31, 2021 for additional information.

NPAs

The following table provides a summary of nonperforming loans, excluding LHFS. Interest income recognized on nonperforming loans HFI was immaterial for the three months ended March 31, 2022 and 2021, respectively.

			March 31, 2022												December 31, 2021
			Recorded Investment												Recorded Investment
(Dollars in millions)			Without an ALLL						With an ALLL						Without an ALLL						With an ALLL
Commercial:
Commercial and industrial			$	139					$	191					$	125					$	269
CRE			18						9						12						17
Commercial construction			—						—						—						7
Consumer:
Residential mortgage			5						310						4						292
Residential home equity and direct			3						138						3						138
Indirect auto			3						224						1						217
Indirect other			—						4						—						5
Total			$	168					$	876					$	145					$	945

The following table presents a summary of nonperforming assets and residential mortgage loans in the process of foreclosure.

(Dollars in millions)			Mar 31, 2022						Dec 31, 2021
Nonperforming loans and leases HFI			$	1,044					$	1,090
Nonperforming LHFS			39						22
Foreclosed real estate			3						8
Other foreclosed property			49						43
Total nonperforming assets			$	1,135					$	1,163
Residential mortgage loans in the process of foreclosure			$	208					$	135

TDRs

The following table presents a summary of TDRs:

(Dollars in millions)			Mar 31, 2022						Dec 31, 2021
Performing TDRs:
Commercial:
Commercial and industrial			$	104					$	147
CRE			5						5
Commercial construction			1						—
Consumer:
Residential mortgage			866						692
Residential home equity and direct			91						98
Indirect auto			392						389
Indirect other			6						7
Student			25						25
Credit card			25						27
Total performing TDRs			1,515						1,390
Nonperforming TDRs			189						152
Total TDRs			$	1,704					$	1,542
ALLL attributable to TDRs			$	87					$	102

Truist Financial Corporation 17

The primary type of modification for newly designated TDRs is summarized in the tables below. New TDR balances represent the recorded investment at the end of the quarter in which the modification was made. The prior quarter balance represents recorded investment at the beginning of the quarter in which the modification was made. Rate modifications consist of TDRs made with below market interest rates, including those that also have modifications of loan structures.

			As of / For the Three Months Ended March 31, 2022
(Dollars in millions)			Type of Modification												Prior Quarter Loan Balance						ALLL at Period End
Rate						Structure
Newly designated TDRs:
Commercial			$	—					$	8					$	10					$	—
Consumer			148						191						329						15
Credit card			2						—						2						1
Re-modification of previously designated TDRs			21						11
			As of / For the Three Months Ended March 31, 2021
			Type of Modification												Prior Quarter Loan Balance						ALLL at Period End
(Dollars in millions)			Rate						Structure
Newly designated TDRs:
Commercial			$	27					$	103					$	147					$	13
Consumer			75						155						233						13
Credit card			4						—						4						2
Re-modification of previously designated TDRs			14						14

Charge-offs and forgiveness of principal and interest for TDRs were immaterial for all periods presented. The amount of modified loans that were classified as TDRs during the previous 12 months and experienced a payment default for three months ended March 31, 2022 and 2021 was immaterial. Payment default is defined as movement of the TDR to nonperforming status, foreclosure, or charge-off, whichever occurs first.

Unearned Income, Discounts, and Net Deferred Loan Fees and Costs

The following table presents additional information about loans and leases:

(Dollars in millions)			Mar 31, 2022						Dec 31, 2021
Unearned income, discounts, and net deferred loan fees and costs			$	537					$	849

18 Truist Financial Corporation

NOTE 6. Goodwill and Other Intangible Assets

The Company performed a qualitative assessment of current events and circumstances, including macroeconomic and market factors, industry and banking sector events, Truist specific performance indicators, and a comparison of management’s forecast and assumptions to those used in its October 1, 2021 quantitative impairment test, concluding 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 March 31, 2022, and therefore no triggering event occurred that required a quantitative goodwill impairment test. Refer to “Note 1. Basis of Presentation” in Truist’s Annual Report on Form 10-K for the year ended December 31, 2021 for additional information.

The changes in the carrying amount of goodwill attributable to operating segments are reflected in the table below. Activity during 2022 reflects the acquisition of Kensington Vanguard National Land Services. Activity during 2021 primarily reflects the acquisitions of Service Finance, LLC, and Constellation Affiliated Partners. Refer to “Note 2. Business Combinations” in Truist’s Annual Report on Form 10-K for the year ended December 31, 2021 for additional information on the acquisitions and “Note 18. Operating Segments” for additional information on segments.

(Dollars in millions)			CB&W						C&CB						IH						Total
Goodwill, January 1, 2021			$	15,841					$	6,167					$	2,439					$	24,447
Mergers and acquisitions			1,168						—						556						1,724
Adjustments and other			(139)						(18)						84						(73)
Goodwill, December 31, 2021			16,870						6,149						3,079						26,098
Mergers and acquisitions			—						—						187						187
Adjustments and other			(1)						—						—						(1)
Goodwill, March 31, 2022			$	16,869					$	6,149					$	3,266					$	26,284

The following table, which excludes fully amortized intangibles, presents information for identifiable intangible assets:

						March 31, 2022																		December 31, 2021
(Dollars in millions)			Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount						Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount
CDI						$	2,563					$	(1,267)					$	1,296					$	2,563					$	(1,190)					$	1,373
Other, primarily client relationship intangibles						3,531						(1,134)						2,397						3,116						(1,081)						2,035
Total						$	6,094					$	(2,401)					$	3,693					$	5,679					$	(2,271)					$	3,408

Truist redeemed a noncontrolling equity interest in SunTrust Merchant Services, LLC, and paid cash of $175 million in exchange for the rights to certain merchant banking relations, including relations previously referred by Truist to SunTrust Merchant Services, LLC. Upon completion of this transaction, Truist recognized a gain on the redemption of noncontrolling equity interest of $74 million and $282 million of other intangibles representing the fair value of acquired contractual relationships as of the transaction date. The intangible assets are being amortized over a term of 12 years based upon the estimated economic benefits received.

Truist Financial Corporation 19

NOTE 7. Loan Servicing

The Company acquires servicing rights, and retains servicing rights related to certain of its sales or securitizations of residential mortgages, commercial mortgages, and other consumer loans. Servicing rights are capitalized by the Company as Loan servicing rights on the Consolidated Balance Sheets. Income earned by the Company on its loan servicing rights is derived primarily from contractually specified servicing fees, late fees, net of curtailment costs, and other ancillary fees.

Residential Mortgage Activities

The following tables summarize residential mortgage servicing activities:

(Dollars in millions)						Mar 31, 2022						Dec 31, 2021
UPB of residential mortgage loan servicing portfolio						$	246,664					$	246,727
UPB of residential mortgage loans serviced for others, primarily agency conforming fixed rate						195,737						196,011
Mortgage loans sold with recourse						221						244
Maximum recourse exposure from mortgage loans sold with recourse liability						137						155
Indemnification, recourse and repurchase reserves						73						74
As of / For the Three Months Ended March 31, (Dollars in millions)						2022						2021
UPB of residential mortgage loans sold from LHFS						$	8,818					$	9,489
Pre-tax gains recognized on mortgage loans sold and held for sale						39						119
Servicing fees recognized from mortgage loans serviced for others						145						141
Approximate weighted average servicing fee on the outstanding balance of residential mortgage loans serviced for others						0.31		%				0.31		%
Weighted average interest rate on mortgage loans serviced for others						3.41						3.76

The following table presents a roll forward of the carrying value of residential MSRs recorded at fair value:

Three Months Ended March 31, (Dollars in millions)						2022						2021
Residential MSRs, carrying value, January 1						$	2,305					$	1,778
Additions						147						174
Change in fair value due to changes in valuation inputs or assumptions:
Prepayment speeds						376						219
OAS						(26)						141
Realization of expected net servicing cash flows, passage of time and other						(110)						(209)
Residential MSRs, carrying value, March 31						$	2,692					$	2,103

The sensitivity of the fair value of the Company’s residential MSRs to changes in key assumptions is presented in the following table:

			March 31, 2022																		December 31, 2021
			Range												Weighted Average						Range												Weighted Average
(Dollars in millions)			Min						Max									Min						Max
Prepayment speed			10.0		%				12.8		%				11.1		%				11.4		%				15.3		%				13.8		%
Effect on fair value of a 10% increase															$	(104)																	$	(113)
Effect on fair value of a 20% increase															(199)																		(216)
OAS			1.2		%				11.2		%				4.3		%				1.5		%				10.7		%				4.2		%
Effect on fair value of a 10% increase															$	(44)																	$	(37)
Effect on fair value of a 20% increase															(87)																		(73)
Composition of loans serviced for others:
Fixed-rate residential mortgage loans															99.3		%																99.3		%
Adjustable-rate residential mortgage loans															0.7																		0.7
Total															100.0		%																100.0		%
Weighted average life															6.0 years																		5.2 years

The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. As indicated, changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in the above table, the effect of an adverse variation in one assumption on the fair value of the MSRs is calculated without changing any other assumption; while in reality, changes in one factor may result in changes in another, which may magnify or counteract the effect of the change. See “Note 15. Fair Value Disclosures” for additional information on the valuation techniques used.

20 Truist Financial Corporation

Commercial Mortgage Activities

The following table summarizes commercial mortgage servicing activities:

			As of/Year-to-Date Ended
(Dollars in millions)			Mar 31, 2022						Dec 31, 2021
UPB of CRE mortgages serviced for others			$	37,397					$	37,960
CRE mortgages serviced for others covered by recourse provisions			9,938						10,243
Maximum recourse exposure from CRE mortgages sold with recourse liability			2,861						2,958
Recorded reserves related to recourse exposure			15						16
CRE mortgages originated during the year-to-date period			1,557						9,380
Commercial MSRs at fair value			280						280

Other Servicing Activities

The Company had $41 million and $48 million of other loan servicing rights at fair value as of March 31, 2022 and December 31, 2021, respectively.

NOTE 8. Other Assets and Liabilities

Lessee Operating and Finance Leases

The Company leases certain assets, consisting primarily of real estate, and assesses at contract inception whether a contract is, or contains, a lease. The following tables present additional information on leases, excluding leases related to the lease financing businesses:

			March 31, 2022												December 31, 2021
(Dollars in millions)			Operating Leases						Finance Leases						Operating Leases						Finance Leases
ROU assets			$	1,126					$	22					$	1,168					$	22
Lease liabilities			1,529						26						1,600						26
Weighted average remaining term			6.5 years						6.2 years						6.6 years						6.4 years
Weighted average discount rate			2.3		%				3.4		%				2.3		%				3.5		%

									Three Months Ended March 31,
(Dollars in millions)															2022						2021
Operating lease costs															$	85					$	85

Lessor Operating Leases

The Company’s two primary lessor businesses are equipment financing and structured real estate with income recorded in Operating lease income on the Consolidated Statements of Income. The following table presents a summary of assets under operating leases and activity related to assets under operating leases. This table excludes subleases on assets included in premises and equipment.

(Dollars in millions)									Mar 31, 2022						Dec 31, 2021
Assets held under operating leases (1)									$	2,034					$	2,110
Accumulated depreciation									(524)						(539)
Net									$	1,510					$	1,571

(1) Includes certain land parcels subject to operating leases that have indefinite lives.

Bank-Owned Life Insurance

Bank-owned life insurance consists of life insurance policies held on certain teammates for which the Company is the beneficiary. These policies provide the Company an efficient form of funding for retirement and other employee benefits costs. The carrying value of bank-owned life insurance was $7.5 billion at March 31, 2022 and $7.3 billion December 31, 2021.

Truist Financial Corporation 21

NOTE 9. Borrowings

The following table presents a summary of short-term borrowings:

(Dollars in millions)						Mar 31, 2022						Dec 31, 2021
Securities sold under agreements to repurchase						$	2,367											$	2,435
Collateral in excess of derivative exposures						380												318
Master notes						683												808
Securities sold short						1,717												1,731
Total short-term borrowings						$	5,147											$	5,292

The following table presents a summary of long-term debt:

(Dollars in millions)																																	Mar 31, 2022						Dec 31, 2021
Truist Financial Corporation:
Fixed rate senior notes (1)																																	$	12,038					$	13,271
Floating rate senior notes (1)																																	999						1,348
Fixed rate subordinated notes (2)																																	927						1,254
Capital notes (2)																																	621						620
Structured notes (3)																																	11						11
Truist Bank:
Fixed rate senior notes (1)																																	9,442						9,545
Floating rate senior notes (1)																																	2,398						2,399
Fixed rate subordinated notes (2)																																	4,908						5,043
FHLB advances																																	860						863
Other long-term debt (4)																																	1,275						1,263
Nonbank subsidiaries:
Other long-term debt (5)																																	294						296
Total long-term debt																																	$	33,773					$	35,913

(1)Prior period was revised to reclassify certain floating rate senior notes that were reported as fixed rate senior notes at December 31, 2021.

(2)Subordinated and capital notes with a remaining maturity of one year or greater qualify under the risk-based capital guidelines as Tier 2 supplementary capital, subject to certain limitations.

(3)Consist of notes with various terms that include fixed or floating rate interest or returns that are linked to an equity index.

(4)Includes debt associated with finance leases, tax credit investments, and other.

(5)Includes debt associated with structured real estate leases.

NOTE 10. Shareholders’ Equity

Common Stock

The following table presents total dividends declared per share of common stock:

												Three Months Ended March 31,
																		2022						2021
Cash dividends declared per share																		$	0.48					$	0.45

Share Repurchase Activity

The Board of Directors has authorized the repurchase of up to $4.2 billion of the Company’s common stock through September 30, 2022. At March 31, 2022, Truist had remaining authorization to repurchase $2.6 billion of common stock under the Board approved repurchase plan. The amount of share repurchases is dependent on capital deployment through organic growth and acquisitions, giving consideration to economic and regulatory conditions.

22 Truist Financial Corporation

NOTE 11. AOCI

AOCI includes the after-tax change in unrecognized net costs related to defined benefit pension and OPEB plans as well as unrealized gains and losses on cash flow hedges, AFS securities, and HTM securities transferred from AFS securities.

Three Months Ended March 31, 2022 and 2021 (Dollars in millions)			Pension and OPEB Costs						Cash Flow Hedges						AFS Securities						HTM Securities						Other, net						Total
AOCI balance, January 1, 2021			$	(875)					$	(64)					$	1,654					$	—					$	1					$	716
OCI before reclassifications, net of tax			28						—						(2,408)						—						1						(2,379)
Amounts reclassified from AOCI:
Before tax			9						47						136						—						—						192
Tax effect			2						11						32						—						—						45
Amounts reclassified, net of tax			7						36						104						—						—						147
Total OCI, net of tax			35						36						(2,304)						—						1						(2,232)
AOCI balance, March 31, 2021			$	(840)					$	(28)					$	(650)					$	—					$	2					$	(1,516)
AOCI balance, January 1, 2022			$	(86)					$	(9)					$	(1,510)					$	—					$	1					$	(1,604)
OCI before reclassifications, net of tax			2						—						(5,036)						—						1						(5,033)
AFS Securities transferred to HTM, net of tax			—						—						2,872						(2,872)						—						—
Amounts reclassified from AOCI:
Before tax			8						6						61						57						—						132
Tax effect			2						1						14						13						—						30
Amounts reclassified, net of tax			6						5						47						44						—						102
Total OCI, net of tax			8						5						(4,989)						44						1						(4,931)
AOCI balance, March 31, 2022			$	(78)					$	(4)					$	(3,627)					$	(2,828)					$	2					$	(6,535)
Primary income statement location of amounts reclassified from AOCI			Other expense						Net interest income and Other expense						Securities gains (losses) and Net interest income						Net interest income						Net interest income

NOTE 12. Income Taxes

For the three months ended March 31, 2022 and 2021, the provision for income taxes was $330 million and $351 million, respectively, representing effective tax rates of 18.9% and 19.2%, respectively. The lower effective tax rate for the three months ended March 31, 2022 was primarily due to discrete tax expenses resulting from the divestiture of certain businesses in the prior year. The Company calculated the provision for income taxes by applying the estimated annual effective tax rate to year-to-date pre-tax income and adjusting for discrete items that occurred during the period.

NOTE 13. Benefit Plans

The components of net periodic (benefit) cost for defined benefit pension plans are summarized in the following table:

						Three Months Ended March 31,
(Dollars in millions)			Income Statement Location			2022						2021
Service cost			Personnel expense			$	139					$	158
Interest cost			Other expense			88						79
Estimated return on plan assets			Other expense			(269)						(249)
Amortization and other			Other expense			8						8
Net periodic (benefit) cost						$	(34)					$	(4)

Truist makes contributions to the qualified pension plans up to the maximum deductible for federal income tax purposes. Discretionary contributions totaling $351 million were made to the Truist pension plan during the three months ended March 31, 2022. There are no required contributions for 2022.

Truist Financial Corporation 23

NOTE 14. Commitments and Contingencies

Truist utilizes a variety of financial instruments to mitigate exposure to risks and meet the financing needs and provide investment opportunities for clients. These financial instruments include commitments to extend credit, letters of credit and financial guarantees, derivatives, and other investments. Truist also has commitments to fund certain affordable housing investments and contingent liabilities related to certain sold loans.

Tax Credit and Certain Equity Investments

The following table summarizes certain tax credit and certain equity investments:

(Dollars in millions)			Balance Sheet Location			Mar 31, 2022						Dec 31, 2021
Investments in affordable housing projects:
Carrying amount			Other assets			$	4,133					$	4,107
Amount of future funding commitments included in carrying amount			Other liabilities			1,346						1,285
Lending exposure			Loans and leases for funded amounts			942						763
Renewable energy investments:
Carrying amount			Other assets			199						257
Amount of future funding commitments not included in carrying amount			NA			70						71
Private equity and certain other equity method investments:
Carrying amount			Other assets			1,925						1,822
Amount of future funding commitments not included in carrying amount			NA			435						411

The following table presents a summary of tax credits and amortization associated with the Company’s tax credit investment activity:

												Three Months Ended March 31,
(Dollars in millions)			Income Statement Location															2022						2021
Tax credits:
Investments in affordable housing projects			Provision for income taxes															$	127					$	120
Other community development investments			Provision for income taxes															23						23
Renewable energy investments			NA (1)															37						39
Amortization and other changes in carrying amount:
Investments in affordable housing projects			Provision for income taxes															$	124					$	119
Other community development investments			Other noninterest income															19						19
Renewable energy investments			Other noninterest income															4						—

(1)Tax credits received for these investments are recorded as a reduction to the carrying value of these investments.

Letters of Credit and Financial Guarantees

In the normal course of business, Truist utilizes certain financial instruments to meet the financing needs of clients and to mitigate exposure to risks. Such financial instruments include commitments to extend credit and certain contractual agreements, including standby letters of credit and financial guarantee arrangements.

The following is a summary of selected notional amounts of off-balance sheet financial instruments:

(Dollars in millions)			Mar 31, 2022						Dec 31, 2021
Commitments to extend, originate, or purchase credit			$	202,695					$	198,658
Residential mortgage loans sold with recourse			221						244
CRE mortgages serviced for others covered by recourse provisions			9,938						10,243
Other loans serviced for others covered by recourse provisions			594						588
Letters of credit			5,818						5,568

24 Truist Financial Corporation

Total Return Swaps

The Company facilitates matched book TRS transactions on behalf of clients, whereby a VIE purchases reference assets identified by a client and the Company enters into a TRS with the VIE, with a mirror-image TRS facing the client. The Company provides senior financing to the VIE in the form of demand notes to fund the purchase of the reference assets. Reference assets are typically fixed income instruments primarily composed of syndicated bank loans. The TRS contracts pass through interest and other cash flows on the reference assets to the third party clients, along with exposing those clients to decreases in value on the assets and providing them with the rights to appreciation on the assets. The terms of the TRS contracts require the third parties to post initial margin collateral, as well as ongoing margin as the fair values of the underlying reference assets change. The following table provides a summary of the TRS transactions with VIE purchases. VIE assets include trading loans and bonds:

(Dollars in millions)						Mar 31, 2022						Dec 31, 2021
Total return swaps:
VIE assets						$	1,627					$	1,519
Trading loans and bonds						1,602						1,491
VIE liabilities						104						50

The Company concluded that the associated VIEs should be consolidated because the Company has (i) the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) the obligation to absorb losses and the right to receive benefits, that could potentially be significant. The activities of the VIEs are restricted to buying and selling the reference assets and the risks/benefits of any such assets owned by the VIEs are passed to the third party clients via the TRS contracts. For additional information on TRS contracts and the related VIEs, see “Note 16. Derivative Financial Instruments.”

Pledged Assets

Certain assets were pledged to secure municipal deposits, securities sold under agreements to repurchase, certain derivative agreements, and borrowings or borrowing capacity, as well as to fund certain obligations related to nonqualified defined benefit and defined contribution retirement plans and for other purposes as required or permitted by law. Assets pledged to the FHLB and FRB are subject to applicable asset discounts when determining borrowing capacity. The Company obtains secured financing and letters of credit from the FRB and FHLB. The Company’s letters of credit from the FHLB can be used to secure various client deposits, including public fund relationships. Excluding assets related to nonqualified benefit plans, the majority of the agreements governing the pledged assets do not permit the other party to sell or repledge the collateral. The following table provides the total carrying amount of pledged assets by asset type:

(Dollars in millions)						Mar 31, 2022						Dec 31, 2021
Pledged securities						$	28,614					$	29,678
Pledged loans:
FRB						70,815						73,349
FHLB						60,151						64,698
Unused borrowing capacity:
FRB						51,876						52,170
FHLB						45,961						49,244

Litigation and Regulatory Matters

Truist and/or its subsidiaries are routinely named as defendants in or parties to numerous actual or threatened legal proceedings, including civil litigation and regulatory investigations or enforcement matters, arising from the ordinary conduct of its regular business activities. The matters range from individual actions involving a single plaintiff to class action lawsuits with many class members and can involve claims for substantial or indeterminate alleged damages or for injunctive or other relief. Investigations may involve both formal and informal proceedings, by both governmental agencies and self-regulatory organizations, and could result in fines, penalties, restitution, and/or alterations in Truist’s business practices. These legal proceedings are at varying stages of adjudication, arbitration, or investigation and may consist of a variety of claims, including common law tort and contract claims, as well as statutory antitrust, securities, and consumer protection claims. The ultimate resolution of any proceeding and the timing of such resolution is uncertain and inherently difficult to predict. It is possible that the ultimate resolution of these matters, if unfavorable, may be material to the consolidated financial position, consolidated results of operations, or consolidated cash flows of Truist, or cause significant reputational consequences.

Truist establishes accruals for legal matters when potential losses associated with the actions become probable and the amount of loss can be reasonably estimated. There is no assurance that the ultimate resolution of these matters will not significantly exceed the amounts that Truist has accrued. Accruals for legal matters are based on management’s best judgment after consultation with counsel and others.

Truist Financial Corporation 25

The Company estimates reasonably possible losses, in excess of amounts accrued, of up to approximately $200 million as of March 31, 2022. This estimate does not represent Truist’s maximum loss exposure, and actual losses may vary significantly. In addition, the matters underlying this estimate will change from time to time. Estimated losses are based upon currently available information and involve considerable judgment, given that claims often include significant legal uncertainties, damages alleged by plaintiffs are often unspecified or overstated, discovery may not have started or may not be complete, and material facts may be disputed or unsubstantiated, among other factors.

For certain matters, Truist may be unable to estimate the loss or range of loss, even if it believes that a loss is probable or reasonably possible, until developments in the case provide additional information sufficient to support such an estimate. Such matters are not accrued for and are not reflected in the estimate of reasonably possible losses.

The following is a description of a certain legal proceeding in which Truist is involved:

Bickerstaff v. SunTrust Bank

This class action case was filed in the Fulton County State Court on July 12, 2010, and an amended complaint was filed on August 9, 2010. Plaintiff asserts that all overdraft fees charged to his account which related to debit card and ATM transactions are actually interest charges and therefore subject to the usury laws of Georgia. Plaintiff has brought claims for violations of civil and criminal usury laws, conversion, and money had and received, and seeks damages on a class-wide basis, including refunds of challenged overdraft fees and pre-judgment interest. On October 6, 2017, the trial court granted plaintiff’s motion for class certification and defined the class as “Every Georgia citizen who had or has one or more accounts with SunTrust Bank and who, from July 12, 2006, to October 6, 2017 (i) had at least one overdraft of $500.00 or less resulting from an ATM or debit card transaction (the “Transaction”); (ii) paid any Overdraft Fees as a result of the Transaction; and (iii) did not receive a refund of those Fees,” and the granting of a certified class was affirmed on appeal. On April 8, 2020, the Company filed a motion seeking to narrow the scope of this class, and on May 29, 2020, it filed a renewed motion to compel arbitration of the claims of some of the class members. On February 9, 2021, the trial court denied both motions as premature but held that the issues could be raised again after the conclusion of discovery, which is currently underway. The Company believes that the claims are without merit.

26 Truist Financial Corporation

NOTE 15. Fair Value Disclosures

Recurring Fair Value Measurements

Accounting standards define fair value as the price that would be received on the measurement date to sell an asset or the price paid to transfer a liability in the principal or most advantageous market available to the entity in an orderly transaction between market participants, with a three level measurement hierarchy:

• Level 1: Quoted prices for identical instruments in active markets

• Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets

• Level 3: Valuations derived from valuation techniques in which one or more significant inputs are unobservable

The following tables present fair value information for assets and liabilities measured at fair value on a recurring basis:

March 31, 2022 (Dollars in millions)						Total						Level 1						Level 2						Level 3						Netting Adjustments (1)
Assets:
Trading assets:
U.S. Treasury						$	965					$	—					$	965					$	—					$	—
GSE						391						—						391						—						—
Agency MBS - residential						1,164						—						1,164						—						—
Agency MBS - commercial						52						—						52						—						—
States and political subdivisions						69						—						69						—						—
Corporate and other debt securities						1,023						—						1,023						—						—
Loans						1,933						—						1,933						—						—
Other						323						273						50						—						—
Total trading assets						5,920						273						5,647						—						—
AFS securities:
U.S. Treasury						9,412						—						9,412						—						—
GSE						245						—						245						—						—
Agency MBS - residential						68,238						—						68,238						—						—
Agency MBS - commercial						2,659						—						2,659						—						—
States and political subdivisions						370						—						370						—						—
Non-agency MBS						3,803						—						3,803						—						—
Other						26						—						26						—						—
Total AFS securities						84,753						—						84,753						—						—
LHFS at fair value						3,364						—						3,364						—						—
Loans and leases						21						—						—						21						—
Loan servicing rights at fair value						3,013						—						—						3,013						—
Other assets:
Derivative assets						2,113						739						2,989						7						(1,622)
Equity securities						1,024						812						212						—						—
Total assets						$	100,208					$	1,824					$	96,965					$	3,041					$	(1,622)
Liabilities:
Derivative liabilities						$	1,482					$	360					$	4,128					$	81					$	(3,087)
Securities sold short						1,717						13						1,704						—						—
Total liabilities						$	3,199					$	373					$	5,832					$	81					$	(3,087)

Truist Financial Corporation 27

December 31, 2021 (Dollars in millions)						Total						Level 1						Level 2						Level 3						Netting Adjustments (1)
Assets:
Trading assets:
U.S. Treasury						$	125					$	—					$	125					$	—					$	—
GSE						306						—						306						—						—
Agency MBS - residential						1,016						—						1,016						—						—
Agency MBS - commercial						13						—						13						—						—
States and political subdivisions						91						—						91						—						—
Corporate and other debt securities						738						—						738						—						—
Loans						1,791						—						1,791						—						—
Other						343						285						58						—						—
Total trading assets						4,423						285						4,138						—						—
AFS securities:
U.S. Treasury						9,795						—						9,795						—						—
GSE						1,698						—						1,698						—						—
Agency MBS - residential						134,042						—						134,042						—						—
Agency MBS - commercial						2,882						—						2,882						—						—
States and political subdivisions						420						—						420						—						—
Non-agency MBS						4,258						—						4,258						—						—
Other						28						—						28						—						—
Total AFS securities						153,123						—						153,123						—						—
LHFS at fair value						3,544						—						3,544						—						—
Loans and leases						23						—						—						23						—
Loan servicing rights at fair value						2,633						—						—						2,633						—
Other assets:
Derivative assets						2,370						887						3,110						30						(1,657)
Equity securities						1,066						967						99						—						—
Total assets						$	167,182					$	2,139					$	164,014					$	2,686					$	(1,657)
Liabilities:
Derivative liabilities						$	586					$	438					$	3,056					$	42					$	(2,950)
Securities sold short						1,731						8						1,723						—						—
Total liabilities						$	2,317					$	446					$	4,779					$	42					$	(2,950)

(1)Refer to “Note 16. Derivative Financial Instruments” for additional discussion on netting adjustments.

At March 31, 2022 and December 31, 2021, investments totaling $495 million and $440 million, respectively, have been excluded from the table above as they are valued based on net asset value as a practical expedient. These investments primarily consist of certain SBIC funds.

For additional information on the valuation techniques and significant inputs for Level 2 and Level 3 assets and liabilities that are measured at fair value on a recurring basis, see “Note 18. Fair Value Disclosures” of the Annual Report on Form 10-K for the year ended December 31, 2021.

28 Truist Financial Corporation

Activity for Level 3 assets and liabilities is summarized below:

Three Months Ended March 31, 2022 and 2021 (Dollars in millions)															Loans and Leases						Loan Servicing Rights						Net Derivatives
Balance at January 1, 2021															$	—					$	2,023					$	172
Total realized and unrealized gains (losses):
Included in earnings															—						374						(164)
Issuances															—						192						96
Settlements															—						(224)						(114)
Balance at March 31, 2021															$	—					$	2,365					$	(10)
Balance at January 1, 2022															$	23					$	2,633					$	(12)
Total realized and unrealized gains (losses):
Included in earnings															—						357						(170)
Issuances															—						158						17
Settlements															—						(135)						91
Other															(2)						—						—
Balance at March 31, 2022															$	21					$	3,013					$	(74)
Change in unrealized gains (losses) included in earnings for the period, attributable to assets and liabilities still held at March 31, 2022															$	—					$	357					$	(45)
Primary income statement location of realized gains (losses) included in earnings															Other income						Residential mortgage income and Commercial mortgage income						Residential mortgage income and Commercial mortgage income

Fair Value Option

The following table details the fair value and UPB of certain loans that were elected to be measured at fair value:

						March 31, 2022																		December 31, 2021
(Dollars in millions)						Fair Value						UPB						Difference						Fair Value						UPB						Difference
Trading loans						$	1,933					$	1,944					$	(11)					$	1,791					$	1,784					$	7
Loans and leases						21						23						(2)						23						35						(12)
LHFS at fair value						3,364						3,405						(41)						3,544						3,450						94

Nonrecurring Fair Value Measurements

The following table provides information about certain assets measured at fair value on a nonrecurring basis still held as of period end. The carrying values represent end of period values, which approximate the fair value measurements that occurred on the various measurement dates throughout the period. These assets are considered to be Level 3 assets.

(Dollars in millions)						Mar 31, 2022												Dec 31, 2021
Carrying value:
LHFS						$	141											$	101
Loans and leases						429												443
Other						52												100

The following table provides information about valuation adjustments for certain assets measured at fair value on a nonrecurring basis. The valuation adjustments represent the amounts recorded during the period regardless of whether the asset is still held at period end.

						Three Months Ended March 31,
(Dollars in millions)						2022						2021
Valuation adjustments:
LHFS						$	(3)					$	(16)
Loans and leases						(97)						(154)
Other						(139)						(95)

LHFS with valuation adjustments in the table above consisted primarily of residential mortgages and commercial loans that were valued using market prices and measured at LOCOM. The table above excludes $662 million and $1.2 billion of LHFS carried at cost at March 31, 2022 and December 31, 2021, respectively, that did not require a valuation adjustment during the period. The remainder of LHFS is carried at fair value. LHFS that were classified as nonperforming and LHFS that were 90 days or more past due and still accruing interest were not material at March 31, 2022 and December 31, 2021.

Truist Financial Corporation 29

Loans and leases consists of larger commercial loans and leases that are collateral-dependent and other secured loans and leases that have been charged-off to the fair value of the collateral. Valuation adjustments for loans and leases are primarily recorded in the Provision for credit losses in the Consolidated statement of income. Refer to “Note 1. Basis of Presentation” in Truist’s Annual Report on Form 10-K for the year ended December 31, 2021 for additional discussion of individually evaluated loans and leases.

Other includes foreclosed real estate, other foreclosed property, ROU assets, premises and equipment, and OREO, and consists primarily of residential homes, commercial properties, vacant lots, and automobiles. ROU assets are measured based on the fair value of the assets, which considers the potential for sublease income. The remaining assets are measured at LOCOM, less costs to sell.

Financial Instruments Not Recorded at Fair Value

For financial instruments not recorded at fair value, estimates of fair value are based on relevant market data and information about the instruments. Values obtained relate to trading without regard to any premium or discount that may result from concentrations of ownership, possible tax ramifications, estimated transaction costs that may result from bulk sales or the relationship between various instruments.

An active market does not exist for certain financial instruments. Fair value estimates for these instruments are based on current economic conditions and interest rate risk characteristics, loss experience and other factors. Many of these estimates involve uncertainties and matters of significant judgment and cannot be determined with precision. Therefore, the fair value estimates in many instances cannot be substantiated by comparison to independent markets. In addition, changes in assumptions could significantly affect these fair value estimates. Financial assets and liabilities not recorded at fair value are summarized below:

									March 31, 2022												December 31, 2021
(Dollars in millions)			Fair Value Hierarchy						Carrying Amount						Fair Value						Carrying Amount						Fair Value
Financial assets:
HTM securities			Level 2						$	61,662					$	59,124					$	1,494					$	1,495
Loans and leases HFI, net of ALLL			Level 3						285,890						282,709						285,055						284,914
Financial liabilities:
Time deposits			Level 2						14,476						14,582						15,886						16,017
Long-term debt			Level 2						33,773						33,275						35,913						36,251

The carrying value of the RUFC, which approximates the fair value of unfunded commitments, was $253 million and $260 million at March 31, 2022 and December 31, 2021, respectively.

30 Truist Financial Corporation

NOTE 16. Derivative Financial Instruments

Impact of Derivatives on the Consolidated Balance Sheets

The following table presents the gross notional amounts and estimated fair value of derivative instruments employed by the Company. Truist held no cash flow hedges as of March 31, 2022 and December 31, 2021.

			March 31, 2022																		December 31, 2021
			Notional Amount						Fair Value												Notional Amount						Fair Value
(Dollars in millions)						Assets						Liabilities									Assets						Liabilities
Fair value hedges:
Interest rate contracts:
Swaps hedging long-term debt			$	7,043					$	—					$	(34)					$	12,690					$	—					$	(6)
Swaps hedging AFS securities			7,098						—						—						12,711						—						(2)
Total			14,141						—						(34)						25,401						—						(8)
Not designated as hedges:
Client-related and other risk management:
Interest rate contracts:
Swaps			153,378						733						(1,320)						150,223						1,716						(733)
Options			30,904						113						(95)						23,659						43						(30)
Forward commitments			4,118						29						(14)						2,404						2						(5)
Other			2,572						—						(1)						2,927						—						—
Equity contracts			39,530						1,275						(1,630)						34,232						1,582						(2,089)
Credit contracts:
Loans and leases			630						—						(1)						570						—						(2)
Risk participation agreements			7,330						—						(3)						8,145						—						(4)
Total return swaps			1,515						8						(5)						1,445						3						(19)
Foreign exchange contracts			18,663						207						(204)						16,102						160						(156)
Commodity			6,338						1,152						(1,144)						4,641						475						(468)
Total			264,978						3,517						(4,417)						244,348						3,981						(3,506)
Mortgage banking:
Interest rate contracts:
Swaps			1,016						3						—						441						—						—
Interest rate lock commitments			3,911						7						(51)						4,163						30						(7)
When issued securities, forward rate agreements and forward commitments			7,129						147						(1)						6,913						7						(15)
Other			357						2						—						424						1						—
Total			12,413						159						(52)						11,941						38						(22)
MSRs:
Interest rate contracts:
Swaps			19,634						1						—						12,837						—						—
Options			5,237						39						—						101						1						—
When issued securities, forward rate agreements and forward commitments			2,856						19						(66)						3,927						7						—
Other			1,273						—						—						2,017						—						—
Total			29,000						59						(66)						18,882						8						—
Total derivatives not designated as hedges			306,391						3,735						(4,535)						275,171						4,027						(3,528)
Total derivatives			$	320,532					3,735						(4,569)						$	300,572					4,027						(3,536)
Gross amounts in the Consolidated Balance Sheets:
Amounts subject to master netting arrangements									(1,290)						1,290												(1,312)						1,312
Cash collateral (received) posted for amounts subject to master netting arrangements									(332)						1,797												(345)						1,638
Net amount									$	2,113					$	(1,482)											$	2,370					$	(586)

Truist Financial Corporation 31

The following table presents the offsetting of derivative instruments including financial instrument collateral related to legally enforceable master netting agreements and amounts held or pledged as collateral. U.S. GAAP does not permit netting of non-cash collateral balances in the Consolidated Balance Sheets:

March 31, 2022 (Dollars in millions)			Gross Amount						Amount Offset						Net Amount in Consolidated Balance Sheets						Held/Pledged Financial Instruments						Net Amount
Derivative assets:
Derivatives subject to master netting arrangement or similar arrangement			$	2,787					$	(1,270)					$	1,517					$	—					$	1,517
Derivatives not subject to master netting arrangement or similar arrangement			209						—						209						—						209
Exchange traded derivatives			739						(352)						387						—						387
Total derivative assets			$	3,735					$	(1,622)					$	2,113					$	—					$	2,113
Derivative liabilities:
Derivatives subject to master netting arrangement or similar arrangement			$	(3,819)					$	2,735					$	(1,084)					$	64					$	(1,020)
Derivatives not subject to master netting arrangement or similar arrangement			(390)						—						(390)						—						(390)
Exchange traded derivatives			(360)						352						(8)						—						(8)
Total derivative liabilities			$	(4,569)					$	3,087					$	(1,482)					$	64					$	(1,418)
December 31, 2021 (Dollars in millions)			Gross Amount						Amount Offset						Net Amount in Consolidated Balance Sheets						Held/Pledged Financial Instruments						Net Amount
Derivative assets:
Derivatives subject to master netting arrangement or similar arrangement			$	2,752					$	(1,221)					$	1,531					$	(1)					$	1,530
Derivatives not subject to master netting arrangement or similar arrangement			388						—						388						—						388
Exchange traded derivatives			887						(436)						451						—						451
Total derivative assets			$	4,027					$	(1,657)					$	2,370					$	(1)					$	2,369
Derivative liabilities:
Derivatives subject to master netting arrangement or similar arrangement			$	(2,873)					$	2,514					$	(359)					$	66					$	(293)
Derivatives not subject to master netting arrangement or similar arrangement			(225)						—						(225)						—						(225)
Exchange traded derivatives			(438)						436						(2)						—						(2)
Total derivative liabilities			$	(3,536)					$	2,950					$	(586)					$	66					$	(520)

The following table presents the carrying value of hedged items in fair value hedging relationships:

						March 31, 2022																		December 31, 2021
												Hedge Basis Adjustment																		Hedge Basis Adjustment
(Dollars in millions)						Hedged Asset / Liability Basis						Items Currently Designated						Discontinued Hedges						Hedged Asset / Liability Basis						Items Currently Designated						Discontinued Hedges
AFS securities (1)						$	48,429					$	(441)					$	(5)					$	108,758					$	(400)					$	(150)
Loans and leases						377						—						12						382						—						12
Long-term debt						24,562						(355)						361						27,361						(137)						629

(1)The amortized cost of AFS securities was $51.3 billion at March 31, 2022 and $110.6 billion at December 31, 2021.

32 Truist Financial Corporation

Impact of Derivatives on the Consolidated Statements of Income and Comprehensive Income

Derivatives Designated as Hedging Instruments under GAAP

No portion of the change in fair value of derivatives designated as hedges has been excluded from effectiveness testing.

The following table summarizes amounts related to cash flow hedges, which consist of interest rate contracts.

									Three Months Ended March 31,
(Dollars in millions)															2022						2021
Pre-tax gain (loss) reclassified from AOCI into interest expense:
Deposits															$	—					$	(1)
Short-term borrowings															—						(5)
Long-term debt															(6)						(5)
Total															$	(6)					$	(11)
Pre-tax gain (loss) reclassified from AOCI into other expense: (1)
Deposits															$	—					$	(12)
Short-term borrowings															—						(20)
Long-term debt															—						(4)
Total															$	—					$	(36)

(1)Represents the accelerated amortization of amounts reclassified from AOCI, where management determined that the forecasted transaction is probable of not occurring.

The following table summarizes the impact on net interest income related to fair value hedges:

									Three Months Ended March 31,
(Dollars in millions)															2022						2021
AFS securities:
Amounts related to interest settlements															$	(5)					$	(11)
Recognized on derivatives															414						524
Recognized on hedged items															(402)						(526)
Net income (expense) recognized															7						(13)
Loans and leases:
Amounts related to interest settlements															—						—
Recognized on derivatives															—						—
Recognized on hedged items															(1)						(1)
Net income (expense) recognized															(1)						(1)
Long-term debt:
Amounts related to interest settlements															16						—
Recognized on derivatives															(429)						—
Recognized on hedged items															486						79
Net income (expense) recognized															73						79
Net income (expense) recognized, total															$	79					$	65

The following table presents information about the Company’s terminated cash flow and fair value hedges:

(Dollars in millions)						Mar 31, 2022						Dec 31, 2021
Cash flow hedges:
Net unrecognized after-tax gain (loss) on terminated hedges recorded in AOCI (to be recognized in earnings through 2022)						$	(4)					$	(9)
Estimated portion of net after-tax gain (loss) on terminated hedges to be reclassified from AOCI into earnings during the next 12 months						(4)						(9)
Fair value hedges:
Unrecognized pre-tax net gain (loss) on terminated hedges (to be recognized as interest primarily through 2030) (1)						$	856					$	767
Portion of pre-tax net gain (loss) on terminated hedges to be recognized as a change in interest during the next 12 months						216						231

(1)Includes deferred gains that are recorded in AOCI as a result of the reclassification to HTM of previously hedged securities of $502 million at March 31, 2022.

Derivatives Not Designated as Hedging Instruments under GAAP

The Company also enters into derivatives that are not designated as accounting hedges under GAAP to economically hedge certain risks as well as in a trading capacity with its clients.

Truist Financial Corporation 33

The following table presents pre-tax gain (loss) recognized in income for derivative instruments not designated as hedges:

												Three Months Ended March 31,
(Dollars in millions)			Income Statement Location															2022						2021
Client-related and other risk management:
Interest rate contracts			Investment banking and trading income and other income															$	56					$	102
Foreign exchange contracts			Investment banking and trading income and other income															32						26
Equity contracts			Investment banking and trading income and other income															5						(8)
Credit contracts			Investment banking and trading income and other income															8						(34)
Commodity contracts			Investment banking and trading income															5						2
Mortgage banking:
Interest rate contracts			Residential mortgage income															261						91
Interest rate contracts			Commercial mortgage income															(1)						(1)
MSRs:
Interest rate contracts			Residential mortgage income															(349)						(333)
Interest rate contracts			Commercial mortgage income															(9)						(12)
Total																		$	8					$	(167)

Credit Derivative Instruments

As part of the Company’s corporate investment banking business, the Company enters into contracts that are, in form or substance, written guarantees; specifically, risk participations, TRS, and credit default swaps. The Company accounts for these contracts as derivatives.

Truist has entered into risk participation agreements to share the credit exposure with other financial institutions on client-related interest rate derivative contracts. Under these agreements, the Company has guaranteed payment to a dealer counterparty in the event the counterparty experiences a loss on the derivative due to a failure to pay by the counterparty’s client. The Company manages its payment risk on its risk participations by monitoring the creditworthiness of the underlying client through the normal credit review process that the Company would have performed had it entered into a derivative directly with the obligors. At March 31, 2022, the remaining terms on these risk participations ranged from less than one year to 16 years. The potential future exposure represents the Company’s maximum estimated exposure to written risk participations, as measured by projecting a maximum value of the guaranteed derivative instruments based on scenario simulations and assuming 100% default by all obligors on the maximum value.

The Company has also entered into TRS contracts on loans and bonds. To mitigate its credit risk, the Company typically receives initial margin from the counterparty upon entering into the TRS and variation margin if the fair value of the underlying reference assets deteriorates. For additional information on the Company’s TRS contracts, see “Note 14. Commitments and Contingencies.”

The Company enters into credit default swaps to hedge credit risk associated with certain loans and leases. The Company accounts for these contracts as derivatives, and accordingly, recognizes these contracts at fair value.

The following table presents additional information related to interest rate derivative risk participation agreements and total return swaps:

(Dollars in millions)			Mar 31, 2022						Dec 31, 2021
Risk participation agreements:
Maximum potential amount of exposure			$	327					$	521
Total return swaps:
Cash collateral held			323						290

34 Truist Financial Corporation

The following table summarizes collateral positions with counterparties:

(Dollars in millions)			Mar 31, 2022						Dec 31, 2021
Dealer and other counterparties:
Cash and other collateral received from counterparties			$	332					$	346
Derivatives in a net gain position secured by collateral received			450						506
Unsecured positions in a net gain with counterparties after collateral postings			79						143
Cash collateral posted to counterparties			1,861						1,704
Derivatives in a net loss position secured by collateral			2,196						2,591
Additional collateral that would have been posted had the Company’s credit ratings dropped below investment grade			2						3
Central counterparties clearing:
Cash collateral, including initial margin, posted to central clearing parties			—						31
Derivatives in a net loss position			7						18
Derivatives in a net gain position			86						—
Securities pledged to central counterparties clearing			797						904

NOTE 17. Computation of EPS

Basic and diluted EPS calculations are presented in the following table:

									Three Months Ended March 31,
(Dollars in millions, except per share data, shares in thousands)															2022						2021
Net income available to common shareholders															$	1,327					$	1,334
Weighted average number of common shares															1,329,037						1,345,666
Effect of dilutive outstanding equity-based awards															12,526						13,266
Weighted average number of diluted common shares															1,341,563						1,358,932
Basic EPS															$	1.00					$	0.99
Diluted EPS															$	0.99					$	0.98
Anti-dilutive awards															—						376

NOTE 18. Operating Segments

Truist operates and measures business activity across three segments: CB&W, C&CB, and IH, with functional activities included in 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. For additional information, see “Note 21. Operating Segments” of the Annual Report on Form 10-K for the year ended December 31, 2021.

Truist Financial Corporation 35

The following table presents results by segment:

Three Months Ended March 31, (Dollars in millions)			CB&W												C&CB												IH												OT&C (1)												Total
2022						2021						2022						2021						2022						2021						2022						2021						2022						2021
Net interest income (expense)			$	1,529					$	1,753					$	1,093					$	1,208					$	24					$	24					$	537					$	300					$	3,183					$	3,285
Net intersegment interest income (expense)			649						231						156						72						—						—						(805)						(303)						—						—
Segment net interest income			2,178						1,984						1,249						1,280						24						24						(268)						(3)						3,183						3,285
Allocated provision for credit losses			74						100						(150)						(35)						—						1						(19)						(18)						(95)						48
Segment net interest income after provision			2,104						1,884						1,399						1,315						24						23						(249)						15						3,278						3,237
Noninterest income			950						920						619						692						737						633						(164)						(48)						2,142						2,197
Amortization of intangibles			73						79						33						38						31						27						—						—						137						144
Other noninterest expense			1,846						1,836						724						737						529						453						438						440						3,537						3,466
Income (loss) before income taxes			1,135						889						1,261						1,232						201						176						(851)						(473)						1,746						1,824
Provision (benefit) for income taxes			271						208						276						266						49						43						(266)						(166)						330						351
Segment net income (loss)			$	864					$	681					$	985					$	966					$	152					$	133					$	(585)					$	(307)					$	1,416					$	1,473
Identifiable assets (period end)			$	160,220					$	159,541					$	184,834					$	183,241					$	10,292					$	8,062					$	188,633					$	166,693					$	543,979					$	517,537

(1)Includes financial data from business units below the quantitative and qualitative thresholds requiring disclosure.

36 Truist Financial Corporation