Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is management’s discussion and analysis of the financial condition and operating results of Truist, which should be read in conjunction with the Consolidated Financial Statements and the accompanying Notes to the Consolidated Financial Statements in this Form 10-Q, as well as with Truist’s Annual Report on Form 10-K for the year ended December 31, 2025.

A description of certain factors that may affect our future results and risk factors is set forth in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.

Executive Overview

We delivered strong earnings in the first quarter of 2026, with diluted EPS increasing 25% from the first quarter of 2025, driven by disciplined execution against our strategic priorities and continued momentum across the franchise.

We continued to build new client relationships, grow in attractive markets, and generate high‑quality loan and deposit growth that is translating into improved profitability.

We also maintained strong asset quality metrics, returned capital to shareholders at an accelerated pace, and continued to invest in scalable technology to better serve our clients and operate more efficiently.

During the first quarter of 2026, we returned $1.8 billion of capital to our common shareholders through $645 million of common stock dividends and $1.1 billion in common share repurchases. As of March 31, 2026, we had $8.9 billion remaining under our $10.0 billion common share repurchase authorization.

Table 1: Earnings Highlights
(Dollars in millions)Three Months Ended March 31,Change
202620252026 vs. 2025
Net interest income$3,599$3,507$92
TE adjustment(1)4548(3)
Net interest income - TE(1)3,6443,55589
Noninterest income1,5531,392161
Total revenue5,1524,899253
Total revenue - TE(1)5,1974,947250
Noninterest expense2,9832,90677
Income before income taxes1,6901,535155
Provision for income taxes209274(65)
Net income1,4811,261220
Net income available to common shareholders1,3771,157220
​
Diluted earnings per common share$1.09$0.87$0.22
Common shareholders’ equity per common share47.6044.852.75
TBVPS(1)33.1930.952.24
Return on average common shareholders’ equity9.3%8.1%120 bps
ROTCE(1)13.812.3150 bps
NIM - TE(1)3.023.011 bp

(1)Represents a non-GAAP measure. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in the “Non-GAAP Financial Measures” section of this report or within the table above for TE measures. NIM – TE is calculated using net interest income on a TE basis to determine the total yield on interest-earning assets.

Net income available to common shareholders was $1.4 billion for the first quarter of 2026, an increase of 19% compared to the first quarter of 2025.

Total TE revenue was up 5.1% compared to the first quarter of 2025.

  • Taxable-equivalent net interest income increased $89 million, or 2.5%, compared to the first quarter of 2025, driven by fixed-rate asset repricing and loan growth, partially offset by fixed-rate liability repricing. NIM - TE was 3.02%, up one basis point compared to the first quarter of 2025.

  • Noninterest income increased $161 million, or 12%, compared to the first quarter of 2025, driven by increases in investment banking and trading income, wealth management income, and mortgage banking income.

46 Truist Financial Corporation

Noninterest expense was up $77 million, or 2.6%, compared to the first quarter of 2025 primarily due to higher personnel expense, partially offset by lower professional fees and outside processing expense.

The effective tax rate was 12.4% for the three months ended March 31, 2026, compared to 17.9% for the three months ended March 31, 2025. The lower effective tax rate was driven by discrete tax benefits and tax credit activity.

Asset quality:

  • Nonperforming loans and leases HFI were 0.50% of loans and leases HFI at March 31, 2026, up two basis points compared to December 31, 2025.

  • Loans 90 days or more past due and still accruing totaled $760 million at March 31, 2026, up two basis points as a percentage of loans and leases HFI compared to December 31, 2025. Excluding government guaranteed loans, the ratio of loans 90 days or more past due and still accruing was 0.05% as a percentage of loans and leases HFI at March 31, 2026, flat compared to December 31, 2025.

  • The ACL was $5.3 billion and included $5.0 billion for the ALLL and $309 million for the reserve for unfunded commitments. The ALLL as a percentage of loans and leases HFI was 1.53%, flat compared to December 31, 2025.

  • The provision for credit losses was $479 million compared to $458 million for the first quarter of 2025.

  • NCOs as a percentage of loans and leases were 61 basis points, up one basis point compared to the first quarter of 2025.

Capital and liquidity:

  • Truist’s preliminary CET1 ratio was 10.8% as of March 31, 2026, flat compared to December 31, 2025 as capital returned to shareholders was largely offset by current quarter earnings.

  • Truist declared common dividends of $0.52 per share during the first quarter of 2026 and repurchased $1.1 billion of common stock. For the first quarter of 2026, the dividend payout ratio was 47%, and the total payout ratio was 129%.

  • Truist’s average consolidated LCR was 110% for the three months ended March 31, 2026, relative to the regulatory minimum of 100%.

Truist Financial Corporation 47

Analysis of Results of Operations

Net Interest Income and NIM - TE

Taxable-equivalent net interest income increased $89 million, or 2.5%, compared to the first quarter of 2025, driven by fixed-rate asset repricing and loan growth, partially offset by fixed-rate liability repricing. NIM - TE was 3.02%, up one basis point compared to the first quarter of 2025. Amounts presented on a TE basis represent a non-GAAP measure. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included within the “Executive Overview” section of this report. NIM – TE is calculated using net interest income on a TE basis to determine the total yield on interest-earning assets.

  • Average earning assets increased $10.1 billion, or 2.1%, primarily due to an increase in average total loans of $21.4 billion, or 7.0%, partially offset by a decline in average securities of $7.9 billion, or 6.4%, and average other earning assets (primarily cash at the Federal Reserve) of $3.5 billion, or 9.1%.

  • The yield on the average total loan portfolio was 5.71%, down 26 basis points. The yield on the average securities portfolio was 2.93%, down 23 basis points.

  • Average deposits increased $6.7 billion, or 1.7%, average short-term borrowings increased $337 million, or 1.1%, and average long-term debt increased $4.7 billion, or 15%.

  • The average cost of total deposits was 1.55%, down 24 basis points. The average cost of short-term borrowings was 3.78%, down 71 basis points. The average cost of long-term debt was 4.80%, down 25 basis points.

The major components of net interest income - TE and the related annualized yields as well as the variances between the periods caused by changes in interest rates versus changes in volumes are summarized below.

48 Truist Financial Corporation

Table 2: Taxable-Equivalent Net Interest Income and Rate / Volume Analysis
Three Months Ended March 31, (Dollars in millions)Average Balances**(1)**Annualized Yield/Rate**(2)**Income/Expense**(2)**Incr. (Decr.)Change due to
202620252026202520262025RateVolume
Assets
AFS and HTM securities at amortized cost:
U.S. Treasury$13,138$14,8674.48%5.19%$145$191$(46)$(25)$(21)
GSE4744623.983.755411—
Agency MBS102,089108,3452.732.87696777(81)(37)(44)
States and political subdivisions3473704.304.2034(1)—(1)
Other70171.654.72—————
Total securities116,118124,0612.933.16849976(127)(61)(66)
Interest earning trading assets5,8075,6285.095.727480(6)(8)2
Other earning assets(3)35,45738,9973.774.53333441(108)(70)(38)
Loans and leases, net of unearned income:
Commercial and industrial166,636155,2145.305.702,1792,184(5)(160)155
CRE24,16519,8325.646.1233930237(25)62
Commercial Construction7,8458,7346.216.84117145(28)(13)(15)
Residential mortgage56,45855,6584.134.0458256220128
Home equity9,6669,5696.997.48167177(10)(12)2
Indirect auto25,34223,2487.087.1944341231(6)37
Other consumer32,05329,2918.388.3366260260456
Credit card4,8574,84910.7911.60129138(9)(9)—
Total loans and leases HFI327,022306,3955.715.974,6184,52296(209)305
LHFS1,9501,1335.245.9326179(2)11
Total loans and leases328,972307,5285.715.974,6444,539105(211)316
Total earning assets486,354476,2144.905.125,9006,036(136)(350)214
Nonearning assets57,76755,416
Total assets$544,121$531,630
Liabilities and Shareholders’ Equity
Interest-bearing deposits:
Interest-checking$120,110$109,2082.092.37619640(21)(80)59
Money market and savings136,106136,8971.812.20609743(134)(130)(4)
Time deposits39,33740,2043.063.56297353(56)(49)(7)
Total interest-bearing deposits295,553286,3092.092.461,5251,736(211)(259)48
Short-term borrowings30,66930,3323.784.49286336(50)(54)4
Long-term debt37,14132,4184.805.0544540936(21)57
Total interest-bearing liabilities363,363349,0592.512.882,2562,481(225)(334)109
Noninterest-bearing deposits103,371105,895
Other liabilities12,59312,643
Shareholders’ equity64,79464,033
Total liabilities and shareholders’ equity$544,121$531,630
Average interest-rate spread2.39%2.24%
NIM/net interest income - TE(2)3.02%3.01%$3,644$3,555$89$(16)$105
Less: TE adjustment4548
Net interest income$3,599$3,507
Memo: Total deposits$398,924$392,2041.55%1.79%$1,525$1,736$(211)

(1)Represents daily average balances. Unrealized gains and losses on AFS securities are included in nonearning assets. Active hedge basis adjustments for fair value hedges are included in nonearning assets and other liabilities.

(2)Amounts related to interest income and yields are on a TE basis, which represents a non-GAAP measure, utilizing the federal income tax rate of 21% for the periods presented. Interest income includes certain fees, deferred costs, and dividends. A reconciliation of net interest income - TE to net interest income is included within the table above. NIM – TE is calculated using net interest income on a TE basis to determine the total yield on interest-earning assets. The change in interest not solely due to changes in rate or volume has been allocated based on the pro-rata absolute dollar amount of each.

(3)Includes cash equivalents, interest-bearing deposits with banks, FHLB stock, and other earning assets.

Truist Financial Corporation 49

Noninterest Income

Noninterest income is a significant driver of Truist’s financial results. The Company has diversified its sources of revenue to reduce its reliance on traditional spread-based interest income, as certain fee-based activities are a relatively stable revenue source during periods of changing interest rates. The following table provides the components of Truist’s noninterest income:

Table 3: Noninterest Income
Three Months Ended March 31,Change
(Dollars in millions)202620252026 vs. 2025
Wealth management income$370$3447.6%
Card and treasury management fees3383331.5
Investment banking and trading income37227336.3
Other deposit revenue1201172.6
Mortgage banking income13310823.1
Lending related fees1189524.2
Securities gains (losses)—(1)NM
Other income102123(17.1)
Total noninterest income$1,553$1,39211.6

Noninterest income was up $161 million, or 12%, compared to the first quarter of 2025.

  • Investment banking and trading income increased primarily due to higher trading income and capital markets activity.

  • Wealth management income increased primarily due to higher assets under management.

  • Mortgage banking income increased primarily due to higher commercial and residential production revenues.

Noninterest Expense

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

Table 4: Noninterest Expense
Three Months Ended March 31,Change
(Dollars in millions)202620252026 vs. 2025
Personnel expense$1,727$1,6047.7%
Professional fees and outside processing313364(14.0)
Software expense230230—
Net occupancy expense1791686.5
Equipment expense85823.7
Marketing and customer development79755.3
Amortization of intangibles6475(14.7)
Regulatory costs6869(1.4)
Other expense238239(0.4)
Total noninterest expense$2,983$2,9062.6

Noninterest expense was up $77 million, or 2.6%, compared to the first quarter of 2025.

  • Personnel expense increased primarily due to increased salaries, incentives, and employee benefits related to hiring.

  • Professional fees and outside processing expense decreased primarily due to the completion of various projects.

50 Truist Financial Corporation

Income Taxes

The following table provides information about the effective tax rate for the first quarter of 2026 and 2025:

Table 5: Effective Tax Rate
Three Months Ended March 31,Change
(Dollars in millions)202620252026 vs. 2025
Income before income taxes$1,690$1,53510.1%
Provision for income taxes209274(23.7)
Effective tax rate12.4%17.9%(550) bps

During 2026, the IRS concluded its examination of the Company’s federal income tax returns for the 2022 tax year, with no material adjustments or impact on the Company’s financial position or results of operations. The effective tax rate was 12.4% for the three months ended March 31, 2026 compared to 17.9% for the three months ended March 31, 2025. The lower effective tax rate was driven by discrete tax benefits and tax credit activity.

Segment Results

Truist operates and measures business activity across two reportable segments: Consumer and Small Business Banking (CSBB) and Wholesale Banking (WB), with functional activities included in Other, Treasury, and Corporate (OT&C). The Company’s business segment structure is based on the manner in which financial information is evaluated by management as well as the products and services provided or the type of client served. Refer to “Note 16. Operating Segments” for additional information on the Company’s reportable segments.

Table 6: Net Income from Continuing Operations by Reportable Segment
Three Months Ended March 31,Change
(Dollars in millions)202620252026 vs. 2025
Consumer and Small Business Banking$733$57627.3%
Wholesale Banking8888139.2
Other, Treasury & Corporate(140)(128)9.4
Truist Financial Corporation$1,481$1,26117.4

Consumer and Small Business Banking

CSBB net income was $733 million for the first quarter of 2026, an increase of $157 million compared to the first quarter of 2025.

  • Segment net interest income increased $248 million primarily driven by higher spreads on deposits.

  • The allocated provision for credit losses increased $47 million reflecting increased charge-offs and an allowance build in the current quarter.

  • Noninterest income increased $26 million primarily due to increases in residential mortgage income.

  • Noninterest expense increased $17 million driven by higher enterprise technology, corporate risk management, and regulatory costs, partially offset by lower enterprise operations charges.

CSBB average loans and leases HFI increased $5.3 billion, or 4.1%, for the first quarter of 2026 compared to the first quarter of 2025, primarily due to higher indirect lending in the prime auto and Service Finance portfolios and increased real estate lending driven by residential mortgage and mortgage warehouse lending.

CSBB average total deposits increased $2.8 billion, or 1.3%, for the first quarter of 2026 compared to the first quarter of 2025, primarily driven by increases in money market and savings and noninterest-bearing deposits, partially offset by decreases in interest checking and time deposits.

Truist Financial Corporation 51

Wholesale Banking

WB net income was $888 million for the first quarter of 2026, an increase of $75 million compared to the first quarter of 2025.

  • Segment net interest income was flat primarily due to higher deposit spreads and higher loan and deposit balances, partially offset by lower loan yields.

  • The allocated provision for credit losses decreased $27 million, which reflects a higher net reserve release.

  • Noninterest income increased $121 million driven by higher income from investment banking and trading activity, wealth management, and lending related fees, partially offset by decreased income from certain equity and other investments.

  • Noninterest expense increased $47 million primarily due to higher revenue-related incentives.

WB average loans HFI increased $15.4 billion, or 8.6%, for the first quarter of 2026 compared to the first quarter of 2025, primarily due to increases in average commercial and industrial loan balances.

WB average total deposits increased $2.3 billion, or 1.6%, for the first quarter of 2026 compared to the first quarter of 2025, primarily due to increases in interest checking balances, partially offset by declines in average money market and savings and noninterest-bearing deposits.

Other, Treasury & Corporate

OT&C generated a net loss of $140 million in the first quarter of 2026, compared to a net loss of $128 million in the first quarter of 2025.

  • OT&C net interest income decreased $160 million primarily due to a decline in interest income on cash balances and securities resulting from lower balances and yields in those portfolios as well as higher inter-segment funding costs for deposits driven by higher segment deposit balances, partially offset by funding charges primarily on loan balances to other segments.

  • Noninterest income increased $14 million primarily due to an increase in tax equivalent offset activity related to tax credit investments in the WB segment.

  • Noninterest expense increased $13 million primarily due to increased salaries driven by higher investments in talent in the technology and risk management functions and a loss on the early extinguishment of long-term debt, partially offset by lower professional fees and outside processing expenses.

52 Truist Financial Corporation

Analysis of Financial Condition

Investment Activities

The securities portfolio totaled $111.9 billion at March 31, 2026, compared to $112.2 billion at December 31, 2025. U.S. Treasury, GSE, and agency MBS represented 99.6% and 99.7% of the total securities portfolio at March 31, 2026 and December 31, 2025, respectively. The majority of the portfolio is agency MBS.

  • The decrease in 2026 was driven by paydowns, maturities, and sales of $4.9 billion, partially offset by purchases of $4.8 billion.

  • As of March 31, 2026, 40% of the investment securities portfolio at amortized cost was classified as held-to-maturity, excluding portfolio-level basis adjustments associated with certain AFS securities compared to 41% at December 31, 2025.

  • As of March 31, 2026, approximately 4.3% of the securities portfolio was variable rate, excluding the impact of swaps, compared to 3.7% as of December 31, 2025.

  • The effective duration of the AFS securities portfolio was 4.4 years at both March 31, 2026 and December 31, 2025, excluding the impact of swaps, or 3.2 years at March 31, 2026 and 2.9 years at December 31, 2025, including the impact of swaps. The effective duration of the HTM securities portfolio was 7.4 years at March 31, 2026, and 7.5 years at December 31, 2025.

Lending Activities

The following table presents the composition of average loans and leases:

Table 7: Average Loans and Leases
Three Months Ended
(Dollars in millions)Mar 31, 2026Dec 31, 2025Sep 30, 2025Jun 30, 2025Mar 31, 2025
Commercial:
Commercial and industrial$166,636$163,990$162,207$158,491$155,214
CRE24,16523,20521,17119,68719,832
Commercial construction7,8458,0158,2588,6138,734
Consumer:
Residential mortgage56,45857,10057,67656,78955,658
Home equity9,6669,6799,5889,5869,569
Indirect auto25,34225,63924,96424,15823,248
Other consumer32,05332,18131,71430,38729,291
Credit card4,8574,9564,9154,8904,849
Total average loans and leases HFI$327,022$324,765$320,493$312,601$306,395

Average loans and leases HFI were $327.0 billion, an increase of $2.3 billion, or 0.7%, compared to the fourth quarter of 2025.

  • Average commercial loans increased 1.8% primarily due to an increase in the commercial and industrial and CRE portfolios.

  • Average consumer loans decreased 0.9% primarily due to a decline in the residential mortgage portfolio.

End of period loans and leases HFI were $329.2 billion, up $643 million, or 0.2% compared to December 31, 2025, primarily due to increases in the commercial and industrial and CRE portfolios, partially offset by declines in the indirect auto and residential mortgage portfolios.

At March 31, 2026 and December 31, 2025, 56% of loans and leases HFI were variable rate.

Truist Financial Corporation 53

Asset Quality

The following tables summarize asset quality information:

Table 8: Asset Quality
(Dollars in millions)Mar 31, 2026Dec 31, 2025Sep 30, 2025Jun 30, 2025Mar 31, 2025
NPAs:
NPLs:
Commercial and industrial$738$839$800$520$586
CRE214798128294
Commercial construction23414212
Residential mortgage231213196191179
Home equity10199103107114
Indirect auto455267247240248
Other consumer7371666465
Total NPLs HFI1,6421,5771,5521,2511,488
Loans held for sale79—191277
Total nonperforming loans and leases1,7211,5771,5711,2631,565
Foreclosed real estate63444
Other foreclosed property5853544949
Total nonperforming assets$1,785$1,633$1,629$1,316$1,618
Loans 90 days or more past due and still accruing:
Commercial and industrial$4$3$3$2$5
Residential mortgage – government guaranteed609532438424468
Residential mortgage – nonguaranteed3938414162
Home equity77666
Other consumer2628272423
Credit card7576694952
Total loans 90 days or more past due and still accruing$760$684$584$546$616
Loans 30-89 days past due and still accruing:
Commercial and industrial$260$127$73$122$118
CRE422563412
Commercial construction1036515—
Residential mortgage – government guaranteed263329327330284
Residential mortgage – nonguaranteed293357344365347
Home equity5769545457
Indirect auto508679620582484
Other consumer240281241239246
Credit card7077737071
Total loans 30-89 days past due and still accruing$1,743$1,980$1,743$1,811$1,619

Nonperforming assets totaled $1.8 billion at March 31, 2026, up $152 million compared to December 31, 2025, primarily due to increases in the indirect auto and LHFS portfolios and partially offset by decreases in the commercial and industrial and CRE portfolios. The increase in indirect auto was driven by an enhancement to nonaccrual criteria for certain loans in that portfolio effective January 1, 2026 to prospectively include accounts in which cumulative payment extensions are at or above 12 months. Nonperforming loans and leases were 0.50% as a percentage of loans and leases, up two basis points compared to December 31, 2025.

Loans 90 days or more past due and still accruing totaled $760 million at March 31, 2026, up two basis points as a percentage of loans and leases compared to December 31, 2025. Excluding government guaranteed loans, the ratio of loans 90 days or more past due and still accruing was 0.05% as a percentage of loans and leases at March 31, 2026, flat compared to December 31, 2025.

Loans 30-89 days past due and still accruing totaled $1.7 billion at March 31, 2026, down $237 million, or seven basis points as a percentage of loans and leases, compared to December 31, 2025.

54 Truist Financial Corporation

The following tables present asset quality metrics. In addition, for the commercial portfolio segment, loans that are rated special mention or substandard performing are closely monitored by management as potential problem loans. Refer to “Note 4. Loans and ACL” for the amortized cost basis of loans by origination year and credit quality indicator as well as additional disclosures related to NPLs.

Table 9: Asset Quality Ratios
Mar 31, 2026Dec 31, 2025Sep 30, 2025Jun 30, 2025Mar 31, 2025
NPLs as a percentage of loans and leases HFI0.500.480.480.390.48
NPLs as a percentage of total loans and leases(1)0.520.480.480.390.51
NPAs(1) as a percentage of total assets0.330.300.300.240.30
Nonperforming assets as a percentage of loans and leases plus foreclosed property0.520.500.500.410.50
Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI0.230.210.180.170.20
Loans 90 days or more past due and still accruing as a percentage of loans and leases, excluding government guaranteed loans(2)0.050.050.050.040.05
Loans 30-89 days past due and still accruing as a percentage of loans and leases HFI0.530.600.540.570.52
ALLL as a percentage of loans and leases1.531.531.541.541.58
Ratio of ALLL to nonperforming loans and leases3.1x3.2x3.2x3.9x3.3x

(1)Nonperforming assets and total loans and leases include loans held for sale.

(2)This asset quality ratio has been adjusted to remove the impact of government guaranteed loans. Management believes the inclusion of such assets in this asset quality ratio results in distortion of this ratio because collection of principal and interest on government guaranteed loans is reasonably assured.

Table 10: Asset Quality Ratios
Three Months Ended
Mar 31, 2026Dec 31, 2025Sep 30, 2025Jun 30, 2025Mar 31, 2025
Net charge-offs (recoveries) as a percentage of average loans and leases:
Commercial:
Commercial and industrial0.31%0.29%0.19%0.22%0.20%
CRE0.060.140.440.711.29
Commercial construction0.84(0.04)(0.03)(0.02)(0.02)
Consumer:
Residential mortgage(0.01)0.01———
Home equity(0.02)(0.04)(0.11)(0.04)(0.07)
Indirect auto2.142.101.991.632.26
Other consumer1.911.841.551.541.71
Credit card5.154.643.134.845.21
Total0.610.570.480.510.60
Ratio of ALLL to net charge-offs2.5x2.7x3.3x3.1x2.6x

Ratios are annualized.

Truist Financial Corporation 55

The following table presents activity related to NPAs:

Table 11: Rollforward of NPAs
(Dollars in millions)20262025
Balance, January 1$1,633$1,477
New NPAs944890
Advances and principal increases10690
Disposals of foreclosed assets(1)(150)(156)
Disposals of NPLs(2)(48)(95)
Charge-offs and losses(357)(323)
Payments(283)(206)
Transfers to performing status(60)(58)
Other, net—(1)
Ending balance, March 31$1,785$1,618

(1)Includes charge-offs and losses recorded upon sale of $76 million and $69 million for the three months ended March 31, 2026 and 2025, respectively.

(2)Includes gains, net of charge-offs and losses recorded upon sale, of $1 million and $3 million for the three months ended March 31, 2026 and 2025, respectively.

Commercial Credit Concentrations

Truist has established the following general practices to manage commercial credit risk:

  • limiting the amount of credit that Truist may extend to a borrower;

  • establishing a process for credit approval accountability;

  • initial underwriting and analysis of borrower, transaction, market, and collateral risks;

  • evaluating the diversity of the loan portfolio in terms of type, industry, and geographical concentration;

  • ongoing servicing and monitoring of individual loans and lending relationships;

  • continuous monitoring of the portfolio, market dynamics, and the economy; and

  • periodically reevaluating the Company’s strategy and overall exposure as economic, market, and other relevant conditions change.

Truist monitors various segments of its credit portfolios to assess potential concentration risks. Management is involved in the credit approval and review process, and risk acceptance criteria are adjusted as needed to reflect the Company’s risk appetite. Consistent with established risk management objectives, the Company utilizes various risk mitigation techniques, including collecting collateral and security interests, obtaining guarantees, and, to a limited extent, through the purchase of credit loss protection via third-party insurance or use of credit derivatives such as credit default swaps.

In the commercial portfolio, risk concentrations are evaluated regularly on both an aggregate portfolio level and on an individual client basis. The Company manages its commercial exposure through portfolio targets, limits, and transactional risk acceptance criteria as well as other techniques, including loan syndications/participations, loan sales, collateral, structure, covenants, and other risk reduction techniques.

The following tables provide industry distribution by major types of commercial credit exposure and the geographical distribution of commercial exposures. Industry classification for commercial and industrial loans is based on the North American Industry Classification System. CRE loans are classified based on type of property. For the geographic disclosures, amounts are generally assigned to a state based on the physical billing address of the client or physical property address.

56 Truist Financial Corporation

Table 12: Commercial and Industrial Portfolio Industry and Geography
March 31, 2026December 31, 2025
(Dollars in millions)LHFI% of TotalNPLLHFI% of TotalNPL
Industry:
Finance and insurance$31,47818.6%$6$30,46418.2%$2
Manufacturing14,0438.314613,4188.091
Real estate and rental and leasing13,1197.8711,9937.11
Retail trade11,8457.01811,9407.124
Health care and social assistance11,4566.8311,7797.067
Public administration8,6785.1—8,6585.22
Wholesale trade8,0524.82137,6554.6212
Information7,0204.1327,5234.5158
Utilities6,5923.9—6,5823.9—
Professional, scientific, and technical services5,4543.255,0433.05
Educational services4,6872.8—4,8682.9—
Transportation and warehousing4,4742.6344,4972.722
Arts, entertainment, and recreation4,2742.514,1822.51
Construction3,4442.0163,3502.04
Administrative and support and waste management and remediation services3,1771.9433,1081.936
Accommodation and food services2,9181.7232,9901.824
Other(1)11,3806.86411,9037.0115
Subtotal152,09189.9611149,95389.4764
Business owner occupied17,15610.112717,85510.675
Total commercial and industrial$169,247100.0%$738$167,808100.0%$839
Geography:
Florida$18,71811.1%$34$18,53211.0%$30
Texas18,01410.69017,00110.1157
New York12,4897.46212,7197.670
North Carolina11,9407.11512,1547.211
Georgia11,8597.016111,4526.8149
California11,5856.83312,4607.434
Virginia9,6595.739,0615.43
Maryland7,3034.377,0574.24
Pennsylvania6,7894.0136,8904.1131
Tennessee6,0323.6525,8733.542
New Jersey4,7592.8114,7432.85
Illinois4,1722.5123,9702.412
South Carolina4,1552.524,2132.54
Ohio3,5142.1623,6242.2—
Other(2)38,25922.518138,05922.8187
Total commercial and industrial$169,247100.0%$738$167,808100.0%$839

(1)Represents other remaining industries that are deemed to be individually insignificant.

(2)Represents other remaining states, U.S. territories, and non-U.S. loans that are deemed to be individually insignificant.

The Finance and insurance industry category includes various types of nonbank financial institutions, including asset securitization, securities-based lending, and certain REITs, which together comprise approximately 57% and 59% of Truist’s funded loans within that industry category at March 31, 2026 and December 31, 2025, respectively. Asset securitization facilities are structured to provide funding to clients based on advance rates that are applied to pools of eligible collateral that generally result in over collateralization of the funded exposures. Securities-based lending arrangements are collateralized by marketable securities that are maintained in a restricted account and monitored by Truist on a daily basis to help determine whether the value of the underlying securities collateral complies with the terms of the margin agreement established with the origination of the loan.

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Table 13: CRE Portfolio Property Type and Geography
March 31, 2026December 31, 2025
(Dollars in millions)LHFI% of TotalNPLLHFI% of TotalNPL
Industry:
Multifamily$8,58435.1%$5$8,05534.0%$4
Industrial5,48122.4—5,52123.3—
Retail4,29217.664,24417.95
Office2,4289.982,43510.336
Hotel1,5596.4—1,5586.6—
Other(1)2,1038.621,9077.92
Total CRE$24,447100.0%$21$23,720100.0%$47
Geography:
Florida$2,77111.3%$2$2,66811.2%$2
Georgia2,69311.012,58610.91
Texas2,59610.612,41110.21
New York2,2869.452,3239.86
North Carolina2,2449.222,3249.81
Pennsylvania1,7137.011,5666.6—
California1,6296.721,6286.9—
New Jersey1,2084.931,1184.73
Illinois1,1624.8—1,1785.013
Virginia1,0134.1—1,0344.4—
Maryland1,0034.118833.72
Other(2)4,12916.934,00116.818
Total CRE$24,447100.0%$21$23,720100.0%$47

(1)Represents other remaining property types that are deemed to be individually insignificant.

(2)Represents other remaining states, U.S. territories, and non-U.S. loans that are deemed to be individually insignificant.

Table 14: Commercial Construction Portfolio Property Type and Geography
March 31, 2026December 31, 2025
(Dollars in millions)LHFI% of TotalNPLLHFI% of TotalNPL
Industry:
Multifamily$3,58747.1%$—$3,87149.7%$—
Industrial1,96625.8—1,88424.2—
Single Family - construction to permanent1,14115.0—1,07013.7—
Office3494.6223925.040
Single Family - acquisition and development and commercial land2042.712082.7—
Other(1)3734.8—3584.71
Total commercial construction$7,620100.0%$23$7,783100.0%$41
Geography:
Florida$1,44218.9$—$1,45318.7$—
Georgia1,10314.5—1,18815.3—
Texas99713.1—1,08814.0—
North Carolina6999.2—7489.6—
California4796.3—4315.5—
Other(2)2,90038.0232,87536.941
Total commercial construction$7,620100.0%$23$7,783100.0%$41

(1)Represents other remaining property types that are deemed to be individually insignificant.

(2)Represents other remaining states, U.S. territories, and non-U.S. loans that are deemed to be individually insignificant.

Refer to “Note 4. Loans and ACL” for additional information on the commercial portfolios, including loans by origination year and credit quality indicator.

58 Truist Financial Corporation

ACL

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

Table 15: Activity in ACL
Three Months Ended
(Dollars in millions)Mar 31, 2026Dec 31, 2025Sep 30, 2025Jun 30, 2025Mar 31, 2025
Balance, beginning of period$5,347$5,305$5,253$5,166$5,161
Provision for credit losses479512436488458
Charge-offs:
Commercial and industrial(142)(141)(98)(120)(102)
CRE(7)(14)(25)(38)(70)
Commercial construction(17)————
Residential mortgage(1)(3)(1)(1)(1)
Home equity(3)(2)(2)(4)(2)
Indirect auto(158)(160)(150)(127)(154)
Other consumer(184)(178)(155)(146)(154)
Credit card(71)(67)(49)(70)(74)
Total charge-offs(583)(565)(480)(506)(557)
Recoveries:
Commercial and industrial1623203124
CRE36237
Commercial construction11—1—
Residential mortgage212—2
Home equity33544
Indirect auto2524252825
Other consumer3328313130
Credit card99101211
Total recoveries929595110103
Net charge-offs(491)(470)(385)(396)(454)
Other——1(5)1
Balance, end of period$5,335$5,347$5,305$5,253$5,166
ACL:
ALLL$5,026$5,030$4,988$4,899$4,870
RUFC309317317354296
Total ACL$5,335$5,347$5,305$5,253$5,166

The ACL was $5.3 billion at March 31, 2026, and included $5.0 billion for the ALLL and $309 million for the RUFC. The ALLL as a percentage of loans and leases HFI at March 31, 2026 was 1.53%, flat compared to December 31, 2025. The ALLL covered nonperforming loans and leases HFI 3.1x at March 31, 2026, compared to 3.2x at December 31, 2025. For the three months ended March 31, 2026, the ALLL was 2.5x annualized net charge-offs, compared to 2.7x for the three months ended December 31, 2025.

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The following table presents an allocation of the ALLL. The entire amount of the allowance is available to absorb losses occurring in any category of loans and leases.

Table 16: Allocation of ALLL by Category
March 31, 2026December 31, 2025
(Dollars in millions)Amount% ALLL in Each Category% Loans in Each CategoryAmount% ALLL in Each Category% Loans in Each Category
Commercial and industrial$1,38427.6%51.5%$1,32626.3%51.0%
CRE4569.17.44769.57.2
Commercial construction1994.02.32464.92.4
Residential mortgage1983.917.11983.917.3
Home equity821.62.9841.73.0
Indirect auto1,03620.67.61,03620.67.8
Other consumer1,25825.09.71,23824.69.8
Credit card4138.21.54268.51.5
Total ALLL5,026100.0%100.0%5,030100.0%100.0%
RUFC309317
Total ACL$5,335$5,347

Truist monitors the performance of its home equity loans and lines secured by second liens similarly to other consumer loans and utilizes assumptions specific to these loans in determining the necessary ALLL. Truist also receives notification when the first lien holder, whether Truist or another financial institution, has initiated foreclosure proceedings against the borrower. When notified that the first lien is in the process of foreclosure, Truist obtains valuations to determine if any additional charge-offs or reserves are warranted. These valuations are updated at least annually thereafter.

Truist has limited ability to monitor the delinquency status of the first lien, unless the first lien is held or serviced by Truist. Truist estimates credit losses on second lien loans where the first lien is delinquent based on historical experience; the increased risk of loss on these credits is reflected in the ALLL.

Other Assets

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

Table 17: Other Assets as of Period End
(Dollars in millions)Mar 31, 2026Dec 31, 2025
Tax credit and other private equity investments$10,219$9,882
Bank-owned life insurance8,5688,515
Pension assets, net8,0057,920
Accounts receivable2,1221,624
Accrued income1,9682,028
FHLB stock1,4471,521
DTA1,4191,507
Derivative assets1,3661,343
Leased assets and related assets1,2871,359
Prepaid expenses1,0801,075
ROU assets1,0321,045
Other1,1571,151
Total other assets$39,670$38,970

60 Truist Financial Corporation

Funding Activities

Deposits

The following table presents average deposits:

Table 18: Average Deposits
Three Months Ended
(Dollars in millions)Mar 31, 2026Dec 31, 2025Sep 30, 2025Jun 30, 2025Mar 31, 2025
Noninterest-bearing deposits$103,371$105,552$105,751$106,686$105,895
Interest checking120,110112,313109,244116,193109,208
Money market and savings136,106138,114136,515135,607136,897
Time deposits39,33740,03145,09041,99740,204
Total average deposits$398,924$396,010$396,600$400,483$392,204

Average deposits for the first quarter of 2026 were $398.9 billion, up $2.9 billion, or 0.7%, compared to the fourth quarter of 2025.

Average noninterest-bearing deposits decreased 2.1% compared to the fourth quarter of 2025 and represented 25.9% of total deposits for the first quarter of 2026 and 26.7% for the fourth quarter of 2025. Average interest checking deposits increased 6.9%. Average money market and savings accounts decreased 1.5%. Average time deposits decreased 1.7%.

End of period deposits were $404.1 billion, up $3.7 billion, or 0.9%, compared to December 31, 2025 primarily due to increases in interest checking deposits and time deposits, partially offset by a decline in money market and savings.

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Borrowings

At March 31, 2026, short-term borrowings totaled $27.4 billion, a decrease of $398 million compared to December 31, 2025.

Long-term debt provides funding and, to a lesser extent, regulatory capital, and primarily consists of senior and subordinated notes issued by the Parent Company and Truist Bank. Long-term debt totaled $41.6 billion at March 31, 2026, a decrease of $341 million compared to December 31, 2025. During the three months ended March 31, 2026, the Company had:

  • Issuances of $2.5 billion of primarily fixed-to-floating rate senior notes with a weighted average interest rate of 4.37% due between January 27, 2029 and January 27, 2032 and $350 million of floating rate senior notes due March 2, 2027.

  • Net redemptions of $1.6 billion of floating rate FHLB advances.

  • Maturities and redemptions of $1.3 billion of senior notes.

In April 2026, the Parent Company issued $1.0 billion principal amount of fixed-to-floating rate senior notes with an interest rate of 4.68% due April 23, 2032, and $1.0 billion principal amount of fixed-to-floating rate senior notes with an interest rate of 5.28% due April 23, 2037.

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

Shareholders’ Equity

Total shareholders’ equity was $64.2 billion at March 31, 2026, a decrease of $1.0 billion from December 31, 2025. This decrease reflected $1.1 billion in common share repurchases, $749 million in common and preferred dividends, and a $568 million decrease in AOCI, partially offset by $1.5 billion in net income. Truist’s book value per common share at March 31, 2026, was $47.60, compared to $47.74 at December 31, 2025. Truist’s TBVPS was $33.19 at March 31, 2026, compared to $33.48 at December 31, 2025. TBVPS is a non-GAAP financial measure. See the “Non-GAAP Financial Measures” section in MD&A for a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure.

In April 2026, the Company repurchased $1.2 billion of common stock through open market repurchases.

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Risk Management

Truist seeks to maintain a comprehensive risk management framework supported by people, processes, and systems designed to identify, assess, measure, monitor, control, mitigate, govern, and report on risks arising from exposures and business activities. Truist has developed a risk taxonomy to provide for the identification, measurement, and reporting of primary risk types and classification of risk elements at Truist. Primary risk types are defined across eight categories including credit, market, liquidity, strategic, operational, technology, compliance, and financial crimes. See Item 1, “Business”, Item 1A, “Risk Factors”, and the “Risk Management” section of MD&A in Truist’s Annual Report on Form 10-K for the year ended December 31, 2025 for additional information regarding these primary risk types.

Truist has established an enterprise risk management framework to enable the execution of strategic goals and objectives in alignment with its risk appetite.

Truist is committed to fostering a culture that prioritizes and supports the identification and escalation of risks across the organization. All teammates are responsible for upholding the Company’s purpose, mission, and values, and are encouraged to speak up if there is any activity or behavior that is inconsistent with the Company’s culture. The Truist Code of Ethics influences the Company’s decision making and informs teammates on how to act in the absence of specific guidance.

Truist seeks an appropriate return for the risk taken in its business operations. Risk-taking activities must be evaluated and prioritized to identify those that are within the Company’s risk appetite and present attractive risk-adjusted returns, while preserving asset value and capital.

Market Risk

Market risk is the risk to current or anticipated earnings, capital, or economic value arising from changes in interest rates, spreads, or prices of financial instruments, and the corresponding impact on the composition of the balance sheet or trading and fair value positions. Market risk results from changes in the level, volatility, or correlations among financial market risk factors or prices, including interest rates, credit spreads, foreign exchange rates, equity, and commodity prices.

Truist’s most significant market risk exposure is to interest rate risk in its balance sheet. However, market risk also results from underlying product liquidity risk, price risk, and volatility risk of instruments held in Truist’s business units. Interest rate risk results from:

  • differences between the timing of rate changes and the timing of cash flows associated with assets and liabilities (re-pricing risk);

  • changing rate relationships among different yield curves affecting bank activities (basis risk);

  • changing rate relationships across the spectrum of maturities (yield curve risk); and

  • interest-related options inherently embedded in bank products (options risk).

The primary objectives of market risk management are to minimize adverse effects from changes in market risk factors on net interest income, net income, and capital, and to offset the risk of price changes for certain assets and liabilities recorded at fair value. At Truist, market risk management also includes the enterprise-wide IPV function.

Market Risk - Interest Rate

As a financial institution, Truist is exposed to interest rate risk from assets, liabilities, and off-balance sheet positions. Truist primarily monitors this risk through two measurement types, (i) NII at risk and (ii) economic value of equity. Truist manages this interest rate risk with securities, derivatives, and broader asset liability management activities. Truist uses derivatives to hedge interest income variability of floating rate loans and to hedge valuation changes of long-term debt and investment securities.

Corporate Treasury is responsible for the management of Truist’s IRR position as part of an integrated balance sheet management strategy. The TMRO team within the RMO monitors Corporate Treasury’s execution of these responsibilities. The ALCO and the BRC approve the policies governing interest rate management and, along with the ERC, receive periodic updates. IRR measurement is reported monthly through the ALCO. Monthly IRR reporting includes exposure and historical trends relative to risk limit scenarios, impacts to a wide range of rate scenarios, and sensitivity tests of key assumptions. IRR reporting is provided to the BRC quarterly.

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IRR measurement is influenced by data, assumptions, and models. Due to their high sensitivity to market rates, mortgage (loan and security) prepayments leverage an industry model that results in varying prepayment speeds across rate scenarios. Prepayments for non-mortgage loans leverage a mix of dynamic models (varying results based on market rates) and static prepayment assumptions based on historical experience. Our analysis incorporates dynamic client deposit balance levels, the mix across product types, and deposit rate paid across alternate rate scenarios based on modeled changes in client and bank behavior. The use of dynamic deposit balance models results in rotation to higher cost funding products (e.g., CDs) when market rates increase and to lower cost funding products (e.g., non-maturity deposits) when market rates decrease. The use of dynamic rate paid models results in varying deposit betas based on the timing and conditions within market rate cycles.

NII at risk measures the change in NII under alternate interest rate scenarios relative to Truist’s baseline scenario, which incorporates Truist’s current balance sheet and off-balance sheet hedges as well as expectations for new business over the forecast horizon. Truist’s baseline scenario relies on assumptions including expectations of the economy and interest rates – which are influenced by market conditions, new business volume, pricing, and client behavior. In measuring NII at risk, Truist assumes that changes in key factors, such as prepayments and deposit pricing (betas), largely move in line with those Truist has experienced in prior rate cycles. However, future behavior of key factors may vary from Truist’s assumptions. NII at risk measurement assumes, when applicable, that U.S. interest rates floor at zero and Truist does not take any balance sheet or hedging actions in response to the rate scenarios.

Truist evaluates a wide range of alternate scenarios including instantaneous and gradual as well as parallel and non-parallel changes in interest rates. The table below presents the estimated change to NII over the following 12 months for select parallel alternate scenarios, expressed as a percentage change relative to baseline NII.

Table 19: Interest Sensitivity Simulation Analysis
Mar 31, 2026Dec 31, 2025
Up 200bps gradual change in interest rates(0.8)%(0.9)%
Up 50bps instantaneous change in interest rates(0.2)(0.1)
Down 50bps instantaneous change in interest rates(0.1)(0.2)
Down 200bps gradual change in interest rates(0.4)(0.3)

Truist performs and monitors sensitivity tests of key assumptions used in NII risk including:

  • Asset prepayment speeds

  • New loan volume pricing spreads

  • Interest-bearing deposit betas

  • Non-interest-bearing demand deposit balance runoff, replaced by market funding

EVE measures changes in the economic value of Truist’s current balance sheet and off-balance sheet hedges under alternate rate scenarios relative to starting economic value. Truist uses EVE as a longer-term measure of interest rate risk. Truist performs and monitors sensitivity tests of key assumptions used in EVE including:

  • Asset prepayment speeds

  • Mortgage spreads (mortgage loan and security valuations)

  • Interest-bearing deposit beta

  • Deposit runoff / decay

Key assumption tests are generally performed by increasing and decreasing the assumption, whether static or dynamically modeled, relative to their respective starting values and then measuring the resulting impact to NII and EVE under baseline and alternate rate scenarios.

The identification and testing of key assumptions are influenced by market conditions and management’s views on key risks. The results of key assumption sensitivity tests are reported to the ALCO and the BRC at least quarterly. Key assumptions and their associated sensitivity tests are reviewed with the ALCO and the BRC at least annually.

Market Risk - Trading Activities

As a financial intermediary, Truist provides its clients access to derivatives, foreign exchange, and securities markets, which generate market risks. Trading market risk is managed using a multi-faceted risk management approach, which includes measuring risk using VaR, stress testing, and sensitivity analysis. Risk metrics are monitored against a suite of limits at both the trading desk level and at the aggregate portfolio level.

64 Truist Financial Corporation

Truist is also subject to risk-based capital guidelines for market risk under the Market Risk Rule. The Capital Markets Risk Management team within the RMO selects, calibrates and monitors compliance with key risk indicators and other risk measures, designed to establish risk-taking parameters for the trading desks within WB. The Capital Markets Risk Committee, ERC and BRC establish policies governing trading activities and receive regular updates to support the oversight of those activities.

Covered Trading Positions

Covered positions subject to the Market Risk Rule include trading assets and liabilities, specifically those held for the purpose of short-term resale or with the intent of benefiting from actual or expected short-term price movements or to lock in arbitrage profits. Truist’s trading portfolio of covered positions results primarily from market making and underwriting services for the Company’s clients, as well as associated risk mitigating hedging activity. The trading portfolio, measured in terms of VaR, consists primarily of four sub-portfolios of covered positions: (i) credit trading, (ii) fixed income securities, (iii) interest rate derivatives, and (iv) equity derivatives. As a market maker across different asset classes, Truist’s trading portfolio also contains other sub-portfolios, including foreign exchange, loan trading, and commodity derivatives; however, these portfolios do not generate material trading risk exposures.

Valuation policies and methodologies exist for all trading positions. Additionally, these positions are subject to independent price verification. Refer to the “Critical Accounting Estimates” section in MD&A, “Note 13. Fair Value Disclosures,” and “Note 14. Derivative Financial Instruments” for discussion of valuation policies and methodologies.

Securitizations

As of March 31, 2026, the aggregate market value of on-balance sheet securitization positions subject to the Market Risk Rule, which were non-agency asset backed securities positions, was $160 million. Consistent with the Market Risk Rule requirements, the Company performs pre-purchase due diligence on each securitization position to identify the characteristics, including deal structure and the asset quality of the underlying assets, that materially affect valuation and performance. Securitization positions are subject to Truist’s risk management framework, which includes daily monitoring against a suite of limits. There were no off-balance sheet securitization positions during the reporting period.

Correlation Trading Positions

The trading portfolio of covered positions did not contain any correlation trading positions as of March 31, 2026.

VaR-Based Measures

VaR measures the potential loss of a given position or portfolio of positions at a specified confidence level and time horizon. Truist utilizes a historical VaR methodology to measure and aggregate risks across its covered trading positions. The VaR calculation is based on a historical simulation approach and measures the potential trading losses using a one-day holding period at a one-tail, 99% confidence level. For Market Risk Rule purposes, the Company calculates VaR using a 10-day holding period and a 99% confidence level. Due to inherent limitations of the VaR methodology, such as the assumption that past market behavior is indicative of future market performance, VaR is only one of several tools we use to measure and manage market risk. Other tools used to manage market risk include stress testing, scenario analysis, and stop loss limits.

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The trading portfolio’s VaR profile is influenced by a variety of factors, including the size and composition of the portfolio, market volatility, and the correlation between different positions. A portfolio of trading positions is typically less risky than the sum of the risk from each of the individual sub-portfolios, because, under normal market conditions, risk within each category partially offsets the exposure to other risk categories. The following table summarizes certain VaR-based measures for the three months ended March 31, 2026 and 2025. Average VaR measures in the three months ended March 31, 2026 were lower compared to the three months ended March 31, 2025, due to lower risk positions.

Table 20: VaR-based Measures
Three Months Ended March 31,
20262025
(Dollars in millions)10-Day Holding Period1-Day Holding Period10-Day Holding Period1-Day Holding Period
VaR-based Measures:
Maximum$25$7$40$15
Average135208
Minimum7394
Period-end134269
VaR by Risk Class:
Interest Rate Risk26
Credit Spread Risk27
Equity Price Risk57
Foreign Exchange Risk11
Portfolio Diversification(5)(13)
Period-end49

Stressed VaR-based measures

Stressed VaR, another component of market risk capital, is calculated using the same internal models as used for the VaR-based measure. Stressed VaR is calculated over a ten-day holding period at a one-tail, 99% confidence level and employs a historical simulation approach based on a continuous twelve-month historical window selected to reflect a period of significant financial stress for the Company’s trading portfolio. The following table summarizes Stressed VaR-based measures:

Table 21: Stressed VaR-based Measures - 10 Day Holding Period
Three Months Ended March 31,
(Dollars in millions)20262025
Maximum$85$287
Average39181
Minimum1371
Period-end33229

Specific Risk Measures

Specific risk is a measure of idiosyncratic risk that could result from risk factors other than broad market movements (e.g., default or event risks). The Market Risk Rule provides fixed risk weights under a standardized measurement method while also allowing a model-based approach, subject to regulatory approval. Truist utilizes the standardized measurement method to calculate the specific risk component of market risk regulatory capital. As such, incremental risk capital requirements do not apply.

66 Truist Financial Corporation

VaR Model Backtesting

In accordance with the Market Risk Rule, the Company evaluates the accuracy of its VaR model through daily backtesting by comparing aggregate daily trading gains and losses (excluding fees, commissions, reserves, net interest income, and intraday trading) from covered positions with the corresponding daily VaR-based measures generated by the model. As illustrated in the following graph, there was one Company-wide VaR backtesting exception during the twelve months ended March 31, 2026. The backtesting exception was driven by tariff-related market volatility. The total number of Company-wide VaR backtesting exceptions over the preceding twelve months is used to determine the multiplication factor for the VaR-based capital requirement under the Market Risk Rule. The capital multiplication factor increases from a minimum of three to a maximum of four, depending on the number of exceptions. All Company-wide VaR backtesting exceptions are reviewed in the context of VaR model use and performance. There was no change in the capital multiplication factor over the preceding twelve months.

12295

Model Risk Oversight

The MRO is responsible for the independent model validation of all decision models, including trading market risk models. As part of ongoing monitoring efforts, the performance of all trading risk models is reviewed regularly to evaluate model performance with emerging developments in financial markets, assess evolving modeling approaches, and identify potential model enhancements.

Stress Testing

The Company uses a range of stress testing techniques to help monitor risks across trading desks and to augment standard daily VaR and other risk limits reporting. The stress testing framework is designed to quantify the impact of extreme, but plausible, stress scenarios that could lead to large, unexpected losses. Stress tests include simulations for risk factor sensitivities, historical repeats, and hypothetical scenarios with varying liquidity horizons of key risk factors. All trading positions within each applicable market risk category (i.e., interest rate risk, equity risk, foreign exchange rate risk, credit spread risk, and commodity price risk) are included in the Company’s stress testing framework. Management reviews stress testing scenarios and makes updates on an ongoing basis. Management also utilizes stress analyses to support the Company’s capital adequacy assessment standards. Refer to the “Capital” section in MD&A for additional discussion of capital adequacy.

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Liquidity

Liquidity is the ability to fund increases in assets and meet obligations as they come due, all without incurring unacceptable costs. In addition to the level of liquid assets, such as cash, cash equivalents, and highly liquid unencumbered securities, other factors affect the ability to meet liquidity needs, including access to a variety of funding sources, maintaining borrowing capacity, growing core deposits, loan repayment, and the ability to securitize or package loans for sale.

Truist has a liquidity risk management process designed to identify, measure, and monitor key liquidity risks to assess whether Truist is operating within its liquidity risk appetite. The liquidity risk appetite is outlined using a qualitative statement and more granular detailed risk appetite statements aligned to Truist’s risk taxonomy. Risk statements form the basis for aligning risk appetite with risk management goals and strategy. Using the risk appetite statements, key risk indicators are developed that represent quantitative metrics which measure current risk exposure relative to Truist’s risk appetite, which help the Board oversee and management monitor liquidity risk-taking activity. Truist’s key risk indicators are designed to support the following objectives:

  • maintain (i) a diversified, but client deposit centric, funding base, (ii) a level of liquid, readily monetized assets sufficient to satisfy business as usual and stressed cash flow needs across multiple liquidity horizons, and (iii) an appropriate level of contingent funding to meet any unexpected needs;

  • limit concentration risk from individual, correlated counterparties, and funding concentrations in tenors that may negatively impact Truist from an unforeseen idiosyncratic or market event; and

  • maintain sufficient liquidity in the holding company to serve as a source of strength to its subsidiaries.

Internal Liquidity Stress Testing

Liquidity stress testing is conducted for Truist and Truist Bank using a variety of institution-specific and market-wide adverse scenarios. Each liquidity stress test scenario applies defined assumptions to execute sources and uses of liquidity over varying planning horizons. The types of expected liquidity uses during a stressed event may include deposit attrition, contractual maturities, reductions in unsecured and secured funding, increased draws on unfunded commitments, and the potential need to post additional collateral for derivatives. To mitigate liquidity outflows, Truist has identified sources of liquidity; however, access to these sources of liquidity could be affected within a stressed environment.

Truist maintains a liquidity buffer of cash on hand and highly liquid unencumbered securities that is designed to meet the projected 30-day net stressed cash-flow needs. Truist’s liquidity buffer is substantially the same in composition to what qualifies as HQLA under the LCR rule. Truist periodically monetizes a representative sample of the liquidity buffer to assess operational readiness through available monetization channels.

Contingency Funding Plan

Truist has a contingency funding plan designed to address ongoing obligations and commitments, particularly in the event of a liquidity contraction. This plan is designed to examine and quantify the organization’s liquidity under the various internal liquidity stress scenarios and is periodically tested to assess the plan’s reliability. Additionally, the plan provides a framework for management and other teammates to follow in the event of a liquidity contraction or in anticipation of such an event. The plan addresses authority for activation and decision making, liquidity options, and the responsibilities of key departments in the event of a liquidity contraction. On a quarterly basis, Truist conducts testing of market access for alternative sources of funds (e.g., FRB, discount window, standing repo facility, etc.) to test operational readiness. On a periodic basis, Truist conducts a tabletop test of the Contingency Funding Plan to assess reliability of the plan during liquidity stress events and to simulate the operational elements of the plan such as communications, coordination, and decision-making.

LCR, NSFR, and HQLA

The LCR rule requires that Truist and Truist Bank maintain an amount of eligible HQLA that is sufficient within the parameters of the rule to meet their estimated total net cash outflows over a prospective 30 calendar-day period of stress. Eligible HQLA, for purposes of calculating the LCR, is the amount of unencumbered HQLA that satisfies operational requirements of the LCR rule. Truist and Truist Bank are subject to the Category III reduced LCR requirements. For the three months ended March 31, 2026, Truist held average weighted eligible HQLA of $89.3 billion, and Truist’s average LCR was 110%, which exceeded the regulatory minimum of 100%.

The NSFR rule defines a minimum amount of stable, long-term funding that Truist and Truist Bank must maintain in relation to their asset composition and off-balance sheet activities. Truist and Truist Bank are subject to the Category III reduced NSFR requirements. At March 31, 2026, Truist was compliant with this requirement.

68 Truist Financial Corporation

Sources of Funds

Truist funds its balance sheet through diverse sources of funding, including client deposits, secured and unsecured capital markets funding, and shareholders’ equity. Truist Bank’s primary source of funding is client deposits. Continued access to client deposits is highly dependent on public confidence in the stability of Truist Bank and its ability to return funds to clients when requested.

Truist Bank maintains a number of diverse funding sources to meet its liquidity requirements. These sources include unsecured borrowings from the capital markets through the issuance of senior or subordinated bank notes, institutional CDs, overnight and term Federal funds markets, and retail brokered CDs. Truist Bank also maintains access to secured borrowing sources, including FHLB advances, repurchase agreements, and the Federal Reserve discount window. Available investment securities could be pledged to create additional secured borrowing capacity. The following table presents a summary of Truist Bank’s available secured borrowing capacity and eligible cash at the Federal Reserve:

Table 22: Selected Liquidity Sources
(Dollars in millions)Mar 31, 2026Dec 31, 2025
Unused borrowing capacity:
Federal Reserve$85,236$84,160
FHLB24,41623,464
Available investment securities (at fair value)73,32670,150
Available secured borrowing capacity182,978177,774
Eligible cash at the Federal Reserve29,90229,973
Total$212,880$207,747

At March 31, 2026, Truist Bank’s available secured borrowing capacity represented approximately 4.8 times the amount of wholesale funding maturities in one year or less.

Parent Company

The Parent Company serves as the primary source of capital for its operating subsidiaries. The Parent Company’s assets consist primarily of cash on deposit with Truist Bank, equity investments in subsidiaries, and advances to subsidiaries, including notes receivable from subsidiaries. The principal obligations of the Parent Company are payments on long-term debt. The main sources of funds for the Parent Company are dividends and management fees from subsidiaries, repayments of advances to subsidiaries, and proceeds from the issuance of equity and long-term debt. The primary uses of funds by the Parent Company are investments in subsidiaries, advances to subsidiaries, dividend payments to common and preferred shareholders, repurchases of common stock, payments on and, from time to time, potential repurchases or redemptions of a portion of an outstanding tranche of long-term debt of the Parent Company (as may be permitted by the terms of each respective series), and the redemption of preferred stock. Refer to “Note 22. Parent Company Financial Information” in Truist’s Annual Report on Form 10-K for the year ended December 31, 2025 for additional information regarding dividends from subsidiaries and debt transactions.

Access to funding at the Parent Company is more sensitive to market disruptions. Therefore, Truist manages cash levels at the Parent Company to exceed a minimum of 12 months of projected cash outflows. In determining the buffer, Truist considers cash requirements for common and preferred dividends, unfunded commitments to affiliates, serving as a source of strength to Truist Bank and the Parent Company’s other subsidiaries, and being able to withstand sustained market disruptions that could limit access to the capital markets. At March 31, 2026, the Parent Company held cash on hand to meet these requirements.

Credit Ratings

Credit ratings are forward-looking opinions of rating agencies as to the Company’s ability to meet its financial commitments and repay its securities and obligations in accordance with their terms of issuance. Credit ratings influence both borrowing costs and access to the capital markets. The Company’s credit ratings are continuously monitored by the rating agencies and are subject to change at any time. As Truist seeks to maintain high quality credit ratings, management meets with the major rating agencies on a regular basis to provide financial and business updates and to discuss current outlooks and trends.

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The following table presents the credit ratings and outlooks of the Parent Company and Truist Bank as of March 31, 2026:

Table 23: Credit Ratings of Truist Financial Corporation and Truist Bank
S&PMoody’sFitchDBRS Morningstar
Truist Financial Corporation:
IssuerA- / A-2Baa1A / F1AAL / R-1M
Senior unsecuredA-Baa1A-AAL
SubordinatedBBB+Baa1BBB+AH
Preferred stockBBB-Baa3(hyb)BBB-AL
Truist Bank:
IssuerA / A-1A3A / F1AA / R-1H
Senior unsecuredAA3AAA
DepositsNAA1 / P-1A+ / F1AA
SubordinatedA-A3A-AAL
Ratings outlook:
Credit trendStableStableStableStable

Capital

The maintenance of appropriate levels of capital is a management priority and is monitored on a regular basis. Truist’s principal goals related to the maintenance of capital are to provide adequate capital to support Truist’s risk profile consistent with the Board-approved risk appetite; provide financial flexibility to support future growth and client needs; comply with relevant laws, regulations, and supervisory guidance; achieve optimal credit ratings for Truist; for the Parent Company to remain a source of strength for the Parent Company’s subsidiaries; and provide a competitive return to shareholders. Risk-based capital ratios, which include CET1 capital, Tier 1 capital, and Total capital, are calculated based on regulatory guidance related to the measurement of capital and risk-weighted assets.

Management regularly monitors the capital position of Truist on both a consolidated and bank-level basis. In this regard, management’s objective is to maintain capital at levels that are in excess of internal capital limits, which are above the regulatory “well-capitalized” minimums. Truist also regularly performs stress testing on its capital levels and is required to periodically submit the Company’s capital plans and stress testing results to the banking regulators. Management has implemented internal stress capital ratio minimums that serve as limits which are measured under internally-developed stress testing scenarios to evaluate whether capital ratios calculated under hypothetical stress, and after the effect of alternative capital actions, are likely to remain above internal stressed minimums. Breaches of internal capital limits, or projected breaches of internal stress capital ratio minimums under hypothetical stress, result in the activation of Truist’s capital contingency plan.

Table 24: Capital Requirements
Minimum CapitalWell-CapitalizedMinimum Capital Plus Stress Capital Buffer**(1)**
TruistTruist Bank
CET14.5%NA6.5%7.0%
Tier 1 capital6.06.0%8.08.5
Total capital8.010.010.010.5
Leverage ratio4.0NA5.0NA
Supplementary leverage ratio3.0NANANA

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

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

Table 25: Capital Ratios - Truist Financial Corporation
(Dollars in millions)Mar 31, 2026Dec 31, 2025
Risk-based:(preliminary)
CET110.8%10.8%
Tier 1 capital11.911.9
Total capital13.713.8
Leverage ratio9.910.0
Supplementary leverage ratio8.38.3
Risk-weighted assets$441,485$443,257

70 Truist Financial Corporation

Capital Contingency Plan

In the event of a realized or potential capital shortfall, Truist has a capital contingency plan that is designed to facilitate improvement of the Company’s capital position through the execution of specific contingency actions which either increase capital, decrease risk-weighted assets, or both. The plan provides a framework designed to monitor for the occurrence of these events by establishing mechanisms to detect capital contraction, including market and economic stress that could adversely impact the Company’s capital position. The plan also establishes governance protocols for activation or deactivation and decision making, lists capital contingency options and associated key information, and addresses the responsibilities of key departments.

Capital ratios remained strong compared to the regulatory requirements for well-capitalized banks. Truist’s CET1 ratio was 10.8% as of March 31, 2026, flat compared to December 31, 2025 as capital returned to shareholders was largely offset by current quarter earnings.

Truist declared common dividends of $0.52 per share during the first quarter of 2026 and repurchased $1.1 billion of common stock. For the first quarter of 2026, the dividend payout ratio was 47%, and the total payout ratio was 129%.

Share Repurchase Activity

Table 26: Share Repurchase Activity
(Dollars in millions, except per share data, shares in thousands)Total Number of Shares Purchased**(1)**Average Price Paid Per Share**(2)(3)**Total Number of Shares Purchased as part of Publicly Announced PlansApproximate Dollar Value of Shares that may yet be Purchased Under the Plans**(3)(4)**
January 1, 2026 to January 31, 202613,936$50.2713,936$9,299
February 1, 2026 to February 28, 20268,21552.778,2158,866
March 1, 2026 to March 31, 2026———8,866
Total22,151$51.1922,151

(1)Includes shares exchanged or surrendered in connection with the exercise of equity-based awards under equity-based compensation plans.

(2)Excludes commissions.

(3)Excludes excise taxes on share repurchases.

(4)In December 2025, Truist announced that the Board had authorized the repurchase of up to $10.0 billion of common stock effective immediately with no expiration date, replacing the previous repurchase authority from June 2024, as part of Truist’s overall capital distribution strategy. Repurchased shares revert to the status of authorized and unissued shares upon repurchase. The share-repurchase program enables Truist to acquire shares through open-market purchases or privately negotiated transactions, including through Rule 10b5-1 plans and other programs, at the discretion of management and on terms (including quantity, timing, and price) that management determines to be advisable. Actions in connection with the share-repurchase program will be subject to various factors, including Truist's capital and liquidity positions and related internal frameworks, accounting and regulatory considerations (including any changes to capital, liquidity, and other regulatory requirements that may be proposed or adopted by the U.S. banking agencies), Truist's financial and operational performance, alternative uses of capital, the trading price of Truist's common stock, and general market conditions. The share-repurchase program does not obligate Truist to acquire a specific dollar amount or number of shares and may be extended, modified, or discontinued at any time.

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Regulatory and Supervisory Update

We are subject to an extensive regulatory framework that affects the products and services that we may offer and the manner in which we may offer them, the risks that we may take, the ways in which we may operate, and the corporate and financial actions that we may take, including our ability to make distributions to shareholders.

The description below summarizes updates to the regulatory and supervisory framework applicable to Truist since the filing of the Annual Report on Form 10-K for the year ended December 31, 2025. 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, 2025 for additional disclosures.

On March 19, 2026, the FDIC, FRB, and OCC issued two joint notices of proposed rulemaking to modernize the regulatory capital framework. The proposals include (i) revisions to the existing standardized approach to calculating risk-weighted assets applicable to Category III and IV institutions and smaller banking organizations, including Truist and Truist Bank; and (ii) a new expanded risk-based approach to calculating risk-weighted assets applicable to the largest and most internationally active banking organizations (Category I and II institutions). As Category III institutions, Truist and Truist Bank would have the option under the proposals to apply the expanded risk-based approach in lieu of the revised standardized approach. The proposals would also (i) update the market risk framework applicable to banking organizations with significant trading activity; and (ii) require Category III and IV banking organizations, including Truist and Truist Bank, to recognize most elements of AOCI in their regulatory capital, subject to a five-year transition period. The timing and content of any final rules, and the potential effects of any final rules on Truist and Truist Bank, remain uncertain.

Critical Accounting Estimates

The accounting and reporting policies of Truist are in accordance with GAAP and conform to the accounting and reporting guidelines prescribed by bank regulatory authorities. The preparation of financial statements in accordance with GAAP requires management to make estimates that are used in arriving at the carrying value of assets and liabilities, and amounts reported for revenues and expenses. Certain of these estimates are considered critical because they require the use of difficult, complex, or subjective judgments, which are sensitive to changes in key assumptions or inputs. The selection of different assumptions or inputs could result in material changes in Truist’s consolidated financial position or consolidated results of operations, and related disclosures. Estimates that are particularly susceptible to significant change include the ACL; fair value measurement; goodwill; income taxes; and pension and postretirement benefit obligations. Understanding Truist’s accounting policies is fundamental to understanding its consolidated financial position and consolidated results of operations. The critical accounting policies are discussed in MD&A in Truist’s Annual Report on Form 10-K for the year ended December 31, 2025. Significant accounting policies and changes in accounting principles and effects of new accounting pronouncements are discussed in “Note 1. Basis of Presentation” in Form 10-K for the year ended December 31, 2025. Disclosures regarding the effects of new accounting pronouncements are included in “Note 1. Basis of Presentation” in this report, as applicable.

Goodwill

Goodwill is subject to ongoing periodic impairment testing based on the fair values of the reporting units to which the acquired goodwill relates. Refer to “Note 1. Basis of Presentation” and “Note 7. Goodwill and Other Intangible Assets” in Truist’s Annual Report on Form 10-K for the year ended December 31, 2025 for a description of management’s impairment testing approach and the Company's most recent annual quantitative test.

The estimated fair value of a reporting unit is highly sensitive to changes in management’s estimates and assumptions, including management’s financial projections, discount rate estimates, and other inputs. Therefore, in some instances, changes in these assumptions could impact whether the fair value of a reporting unit is greater than its carrying value. The valuation of the WB reporting unit as of October 1, 2025 indicated that if the discount rate increased 100 basis points, with other cash flow assumptions unchanged, the reporting unit’s fair value would be less than its carrying value, indicating a goodwill impairment under the income approach. Ultimately, adverse performance in relation to management’s projections or potential future changes in management’s assumptions may impact the estimated fair value of a reporting unit and cause the fair value of the reporting unit to be below its carrying value. Additionally, a reporting unit’s carrying value could change based on market conditions, changes in the underlying makeup of the reporting unit, or changes in the risk profile of the reporting unit, which could impact whether the fair value of a reporting unit is less than its carrying value.

The Company monitored events and circumstances during the period from January 1, 2026 to March 31, 2026, including macroeconomic and market factors, industry and banking sector events, Truist specific performance indicators, a comparison of management’s forecast and assumptions to those used in its October 1, 2025 quantitative impairment test, and the sensitivity of the October 1, 2025 quantitative results to changes in assumptions as of March 31, 2026. Based on these considerations, Truist concluded that it was not more-likely-than-not that the fair value of one or more of its reporting units is below its respective carrying amount as of March 31, 2026.

72 Truist Financial Corporation

Non-GAAP Financial Measures

Tangible common equity, average tangible common equity, and related measures, including ROTCE and TBVPS, are non-GAAP measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Truist’s management uses these measures to assess profitability, returns relative to balance sheet risk, and shareholder value. These measures should not be considered in isolation or as a substitute for the related GAAP financial measures presented in this report and are not necessarily comparable to similar non-GAAP financial measures that may be presented by other companies. The following tables reconcile each non-GAAP financial measure to the most directly comparable GAAP financial measure.

Table 27: Reconciliation of ROTCE
Three Months Ended March 31,
(Dollars in millions)20262025
Calculation of tangible net income available to common shareholders:
Net income available to common shareholders(a)$1,377$1,157
Amortization of intangibles6475
Applicable income taxes related to amortization of intangibles(1)(15)(18)
Tangible net income available to common shareholders(b)$1,426$1,214
Calculation of average tangible common shareholders’ equity:
Average common shareholders’ equity(c)$59,879$58,125
Average intangible assets(18,386)(18,669)
Applicable deferred taxes related to intangible assets(1)404422
Average tangible common shareholders’ equity(d)$41,897$39,878
Return on average common shareholders’ equity(a)/(c)9.3%8.1%
ROTCE(b)/(d)13.812.3

(1)Calculated using the applicable marginal tax rate.

Table 28: Reconciliation of Tangible Common Equity
(Dollars in millions, except per share data, shares in thousands)March 31, 2026December 31, 2025
Calculation of period end tangible common equity:
Total shareholders’ equity$64,214$65,189
Preferred stock(4,916)(4,916)
Common shareholders’ equity(a)59,29860,273
Intangible assets(18,350)(18,416)
Applicable deferred taxes related to intangible assets(1)403407
Tangible common equity(b)$41,351$42,264
Common shares outstanding at end of period(c)1,245,8791,262,470
Common shareholders’ equity per common share(a)/(c)$47.6047.74
TBVPS(b)/(c)33.1933.48

(1)Calculated using the applicable marginal tax rate.

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