Truist Financial 10-Q 2025-03-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-Q

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☒ Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the quarterly period ended: March 31, 2025

Commission File Number: 1-10853

TRUIST FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

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Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At March 31, 2025, 1,309,538,961 shares of the registrant’s common stock, $5 par value, were outstanding.

Glossary of Defined Terms

The following terms may be used throughout this report, including the consolidated financial statements and related notes.

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Forward-Looking Statements and Other Terms

From time to time we have made, and in the future will make, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “believe,” “expect,” “anticipate,” “intend,” “pursue,” “seek,” “continue,” “estimate,” “project,” “outlook,” “forecast,” “potential,” “target,” “objective,” “trend,” “plan,” “goal,” “initiative,” “priorities,” or other words of comparable meaning or future-tense or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, or results.

This report, including any information incorporated by reference in this report, contains forward-looking statements. We also may make forward-looking statements in other documents that are filed or furnished with the SEC. In addition, we may make forward-looking statements orally or in writing to investors, analysts, members of the media, and others. All forward-looking statements, by their nature, are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Actual future objectives, strategies, plans, prospects, performance, conditions, and results may differ materially from those set forth in any forward-looking statement. While no list of assumptions, risks, and uncertainties could be complete, some of the factors that may cause actual results or other future events or circumstances to differ from those in forward-looking statements include:

• evolving political, geopolitical, business, social, economic, and market conditions at local, regional, national, and international levels;

• monetary, fiscal, and trade laws or policies, including tariffs or responses to rates of inflation above target levels;

• the legal, regulatory, and supervisory environment, including changes in financial-services legislation, regulation, policies, or government officials or other personnel;

• our ability to address heightened scrutiny and expectations from supervisory or other governmental authorities and to timely and credibly remediate related concerns or deficiencies;

• judicial, regulatory, and administrative inquiries, examinations, investigations, proceedings, disputes, or rulings that create uncertainty for or are adverse to us or the financial-services industry;

• the outcomes of judicial, regulatory, and administrative inquiries, examinations, investigations, proceedings, disputes, or rulings to which we are or may be subject (either directly or indirectly through our ownership interests in other entities) and our ability to absorb and address any damages or other remedies that are sought or awarded and any collateral consequences;

• evolving accounting standards and policies;

• the adequacy of our corporate governance, risk-management framework, compliance programs, and internal controls over financial reporting, including our ability to control lapses or deficiencies in financial reporting, to make appropriate estimates, or to effectively mitigate or manage operational risk;

• any instability or breakdown in the financial system, including as a result of the actual or perceived soundness of another financial institution or another participant in the financial system;

• disruptions and shifts in investor sentiment or behavior in the securities, capital, or other financial markets, including financial or systemic shocks and volatility or changes in market liquidity, interest or currency rates, or valuations;

• our ability to cost-effectively fund our businesses and operations, including by accessing long- and short-term funding and liquidity and by retaining and growing client deposits;

• changes in any of our credit ratings;

• our ability to manage any unexpected outflows of uninsured deposits and avoid selling investment securities or other assets at an unfavorable time or at a loss;

• negative market perceptions of our investment portfolio or its value;

• adverse publicity or other reputational harm to us, our service providers, or our senior officers;

• business and consumer sentiment, preferences, or behavior, including spending, borrowing, or saving by businesses or households;

• our ability to execute on strategic and operational plans, including accelerating growth, improving profitability, investing in talent, technology, and risk infrastructure, maintaining expense, credit, and risk discipline, and returning capital to shareholders;

• changes in our corporate and business strategies, the composition of our assets, or the way in which we fund those assets;

• our ability to successfully make and integrate acquisitions and to effect divestitures;

• our ability to develop, maintain, and market our products or services or to absorb unanticipated costs or liabilities associated with those products or services;

• our ability to innovate, to anticipate the needs of current or future clients, to successfully compete, to increase or hold market share in changing competitive environments, or to deal with pricing or other competitive pressures;

• our ability to maintain secure and functional financial, accounting, technology, data processing, or other operating systems or infrastructure, including those that safeguard personal and other sensitive information;

• our ability to appropriately underwrite loans that we originate or purchase and to otherwise manage credit risk;

• our ability to satisfactorily and profitably perform loan servicing and similar obligations;

• the credit, liquidity, or other financial condition of our clients, counterparties, service providers, or competitors;

• our ability to effectively deal with economic, business, or market slowdowns or disruptions;

• the efficacy of our methods or models in assessing business strategies or opportunities or in valuing, measuring, estimating, monitoring, or managing positions or risk;

• our ability to keep pace with changes in technology that affect us or our clients, counterparties, service providers, or competitors or to maintain rights or interests in associated intellectual property;

• our ability to attract, hire, and retain key teammates and to engage in adequate succession planning;

• the performance and availability of third-party service providers on whom we rely in delivering products and services to our clients and otherwise in conducting our business and operations;

• our ability to detect, prevent, mitigate, and otherwise manage the risk of fraud or misconduct by internal or external parties;

• our ability to manage and mitigate physical-security and cybersecurity risks, including denial-of-service attacks, hacking, phishing, social-engineering attacks, malware intrusion, data-corruption attempts, system breaches, identity theft, ransomware attacks, environmental conditions, and intentional acts of destruction;

• natural or other disasters, calamities, and conflicts, including terrorist events, cyber-warfare, and pandemics;

• widespread outages of operational, communication, and other systems;

• our ability to maintain appropriate corporate responsibility practices, oversight, and disclosures;

• policies and other actions of governments to manage and mitigate climate and related environmental risks, and the effects of climate change or the transition to a lower-carbon economy on our business, operations, and reputation; and

• other assumptions, risks, or uncertainties described in the Risk Factors (Item 1A), Management’s Discussion and Analysis of Financial Condition and Results of Operations (Item 7), or the Notes to the Consolidated Financial Statements (Item 8) in our Annual Report on Form 10-K or described in any of the Company’s subsequent quarterly or current reports.

Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except as required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, or Current Report on Form 8-K.

Unless the context otherwise requires, “sale of TIH” and similar phrases refer to the sale of our majority stake in TIH on May 6, 2024.

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CONSOLIDATED BALANCE SHEETS

TRUIST FINANCIAL CORPORATION AND SUBSIDIARIES

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

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CONSOLIDATED STATEMENTS OF INCOME

TRUIST FINANCIAL CORPORATION AND SUBSIDIARIES

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MD&A is intended to assist readers in their analysis of the accompanying Consolidated Financial Statements and supplemental financial information. It should be read in conjunction with the Consolidated Financial Statements, the accompanying Notes to the Consolidated Financial Statements in this Form 10-Q, other information contained in this document, as well as with Truist’s Annual Report on Form 10-K for the year ended December 31, 2024.

A description of certain factors that may affect our future results and risk factors is set forth in Part I, Item 1A-Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024.

Regulatory and Supervisory Update

We are subject to significant regulatory frameworks that affect the products and services that we may offer and the manner in which we may offer them, the risks that we may take, the ways in which we may operate, and the corporate and financial actions that we may take.

The description below summarizes an update to the regulatory and supervisory framework applicable to Truist since the filing of the Annual Report on Form 10-K for the year ended December 31, 2024. This update does not summarize all actual, proposed, or possible changes in statutes, regulations, and other laws applicable to Truist and is not intended to be a substitute for those laws. Refer to “Regulatory and Supervisory Considerations” in Truist’s Annual Report on Form 10-K for the year ended December 31, 2024 for additional disclosures.

In December 2024, the CFPB issued a final rule to financial institutions with more than $10 billion in assets to either limit the cost of overdraft services to the amount of their costs and losses or adhere to a fee cap of $5. The rule was expected to take effect on October 1, 2025. In late March and early April 2025, the Senate and House of Representatives invoked the Congressional Review Act to overturn this rule. If the resolution is signed by the President, the rule will not become effective and banks with more than $10 billion in assets, including Truist Bank, will not be required to change their overdraft fee structures to comply with the rule.

Executive Overview

We delivered solid first quarter results as we focused on executing strategic growth initiatives amidst market volatility. We grew average loans and deposits on a linked-quarter basis while delivering strong asset quality metrics and maintaining credit and risk discipline.

We prudently managed expenses yet continued to invest in talent, technology, and risk infrastructure. Our strong capital and liquidity profile positioned us for a variety of economic environments and enabled us to continue capitalizing on opportunities for our shareholders.

We returned $1.2 billion of capital to our common shareholders through $679 million of common stock dividends and $500 million of common share repurchases during the first quarter of 2025. As of March 31, 2025, we had $3.5 billion remaining under our $5.0 billion common share repurchase authorization through the end of 2026.

Financial Results

Net income available to common shareholders for the first quarter of 2025 of $1.2 billion was up 6.0% compared with the first quarter of 2024. On a diluted per common share basis, earnings for the first quarter of 2025 were $0.87, an increase of $0.06, or 7.4%, compared to the first quarter of 2024. Truist’s results of operations for the first quarter of 2025 produced an annualized return on average assets of 0.96% and an annualized return on average common shareholders’ equity of 8.1% compared to prior year returns of 0.91% and 8.4%, respectively.

Net income from continuing operations was $1.3 billion for the first quarter of 2025, compared to $1.1 billion for the first quarter of 2024.

Taxable-equivalent net interest income for the first quarter of 2025 was up $130 million, or 3.8%, compared to the first quarter of 2024 primarily due to the balance sheet repositioning in the second quarter of 2024. Net interest margin was 3.01%, up 13 basis points.

• The yield on the average total loan portfolio was 5.97%, down 41 basis points due to the impact of variable rate loans repricing. The yield on the average securities portfolio was 3.16%, up 71 basis points, reflecting the aforementioned balance sheet repositioning and reinvesting cash flows into higher yielding securities.

• The average cost of total deposits was 1.79%, down 24 basis points. The average cost of short-term borrowings was 4.49%, down 113 basis points. The average cost of long-term debt was 5.05%, up 31 basis points.

Noninterest income for the first quarter of 2025 was down $54 million, or 3.7%, compared to the first quarter of 2024 primarily due to lower investment banking and trading income and wealth management income.

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Noninterest expense for the first quarter of 2025 was down $47 million, or 1.6%, compared to the first quarter of 2024 due to lower regulatory costs driven by the prior period FDIC special assessment adjustment of $75 million and lower personnel expense, partially offset by higher professional fees and outside processing expense. Restructuring charges for both quarters include severance charges as well as costs associated with facilities optimization initiatives. Adjusted noninterest expense, which excludes the FDIC special assessment adjustment and restructuring charges, increased $41 million, or 1.5%, compared to the earlier quarter.

The higher effective tax rate for the first quarter of 2025 compared to the first quarter of 2024 is primarily due to higher forecasted 2025 pre-tax earnings, partially offset by lower discrete tax expense.

Asset quality remained strong during the first quarter of 2025.

• Nonperforming loans and leases held for investment were 0.48% of loans and leases held for investment at March 31, 2025, up one basis points compared to December 31, 2024.

• Loans 90 days or more past due and still accruing totaled $616 million at March 31, 2025, up one basis point as a percentage of loans and leases compared with December 31, 2024. Excluding government guaranteed loans, the ratio of loans 90 days or more past due and still accruing as a percentage of loans and leases was 0.05% at March 31, 2025, unchanged from December 31, 2024.

• The allowance for credit losses was $5.2 billion and included $4.9 billion for the allowance for loan and lease losses and $296 million for the reserve for unfunded commitments. The ALLL ratio was 1.58%, down one basis point from December 31, 2024.

• The provision for credit losses was $458 million compared to $500 million for the first quarter of 2024.

• The net charge-off ratio was 60 basis points, down 4 basis points compared to the first quarter of 2024 primarily driven by lower net charge-offs in the CRE portfolio.

Capital ratios remained strong during the first quarter of 2025.

• Truist’s CET1 ratio was 11.3% as of March 31, 2025, down 20 basis points compared to December 31, 2024 due to capital returned to shareholders, an increase in risk-weighted assets, and the final CECL phase-in, partially offset by current quarter earnings.

• Truist declared common dividends of $0.52 per share during the first quarter of 2025 and repurchased $500 million of common stock. For the first quarter of 2025, the dividend payout ratio was 59%, and the total payout ratio was 102%.

• Truist’s average consolidated LCR was 111% for the three months ended March 31, 2025, compared to the regulatory minimum of 100%.

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Analysis of Results of Operations

Net Interest Income and NIM

Taxable-equivalent net interest income for the first quarter of 2025 was up $130 million, or 3.8%, compared to the first quarter of 2024 primarily due to the balance sheet repositioning in the second quarter of 2024. Net interest margin was 3.01%, up 13 basis points.

• Average earning assets decreased $283 million, or 0.1%, primarily due to a decline

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Evaluation of Disclosure Controls and Procedures

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

Changes in Internal Control over Financial Reporting

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

There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Refer to the Legal Proceedings and Other Matters section in “Note 14. Commitments and Contingencies,” which is incorporated by reference into this item.

There have been no material changes to the risk factors disclosed in Truist’s Annual Report on Form 10-K for the year ended December 31, 2024. Additional risks and uncertainties not currently known to Truist or that management has deemed to be immaterial also may materially adversely affect Truist’s business, financial condition, or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Refer to the Share Repurchase Activity section in the MD&A, which is incorporated by reference into this item.

(c) During the three months ended March 31, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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