Truist Financial NYSE: TFC reported third-quarter 2026 adjusted earnings per share of $1.16, up 12% from a year earlier, as the bank advanced a strategic review aimed at simplifying its business mix, improving balance-sheet composition and redirecting resources toward relationship-based banking businesses.
Reported net income available to common shareholders was $684 million, or $0.56 per diluted share. Results included the effects of the completed sale of the company’s Regional Acceptance Corporation, or RAC, auto loan portfolio and a related available-for-sale securities repositioning. Those actions reduced reported earnings per share by a net $0.60, according to Chief Financial Officer Mike Maguire.
“We have all the raw materials to become one of the country’s top-performing banks,” Chief Executive Officer Mike Lyons said on his first earnings call in the role. Lyons said the company’s central objective is to improve operating performance, growth, profitability and shareholder value, while acknowledging Truist has not performed up to its potential in recent years.
Portfolio exits and balance-sheet changes
Truist completed the previously announced sale of its $5.5 billion RAC auto loan portfolio at the end of the third quarter, receiving $5.2 billion in net proceeds that it used to reduce borrowings. Maguire said the sale reduced consolidated non-performing loans by 28% and lowered expected annualized net charge-offs by 10 basis points.
The RAC transaction generated approximately $1 billion, or 23 basis points, of common equity tier 1 capital. Truist used that capital to reposition a portion of its available-for-sale securities portfolio, selling $8.6 billion of lower-yielding agency mortgage-backed securities with a 2.67% book yield and a 5.8-year duration. It purchased $7.2 billion of investment securities yielding about 5.6%, adjusted for associated pay-fixed swaps, with a duration of 2.3 years.
Maguire said the combined actions were immediately accretive to tangible book value per share and are expected to benefit earnings per share and return on tangible common equity beginning in the fourth quarter.
The company also announced an agreement to sell $7.7 billion of loans representing substantially all assets of LightStream, its national direct unsecured personal-lending business. The transaction is expected to close in the fourth quarter and generate $7.2 billion in net proceeds, $850 million of CET1 capital, and an estimated 7-basis-point reduction in consolidated annual net charge-offs.
Truist expects to use LightStream sale proceeds to repay wholesale funding and could use incremental capital to reposition additional available-for-sale securities, depending on market conditions. Lyons described both RAC and LightStream as nationally focused, standalone lending businesses that did not fit Truist’s strategy of building deeper client relationships around core deposit accounts.
Quarterly operating trends
Average deposits increased 1.4% from the prior quarter and 3.6% from a year earlier, driven largely by higher client deposit balances. Average client deposits rose $16 billion year over year, while other treasury and corporate-managed deposits declined $2 billion. Truist also reported positive net new checking-account growth during both the quarter and year to date.
Average loans and leases declined $3.6 billion, or 1.1%, from the prior quarter to $326 billion, largely reflecting the RAC portfolio transfer and reduced lending activity in less strategic consumer and commercial portfolios. Excluding strategic runoff and the RAC action, core loan balances increased $800 million, supported by growth in Service Finance, Sheffield and residential mortgage lending.
Taxable-equivalent net interest income rose $40 million, or 1.1%, sequentially to $3.7 billion, while net interest margin increased 2 basis points to 3.0%. The company expects fourth-quarter net interest income of $3.65 billion to $3.7 billion, including an estimated $125 million reduction from the RAC sale that will be partly offset by about $40 million from the securities repositioning.
Adjusted non-interest income declined 2.9% from the prior quarter to $1.6 billion. Lower investment banking and trading revenue, as well as lower other income, were partly offset by a $32 million increase in wealth management income. Wealth management revenue totaled a record $407 million for the quarter.
Non-interest expense increased 1.6% sequentially to $3.1 billion, primarily due to $40 million in severance and other costs tied to the RAC sale. Excluding those costs, adjusted expenses rose 0.3% from the second quarter.
Investment priorities and outlook
Lyons said Truist will focus its investment agenda on its branch and ATM networks, technology and artificial intelligence capabilities, digital banking, payments, credit cards, treasury management and client-facing talent. In consumer banking, the company aims to deepen primary checking relationships across its existing branch footprint and expand products that support those relationships, including credit cards, home lending and unsecured loans.
In wholesale banking, Truist plans to build its treasury management platform, add sales capacity in middle-market banking, rates and foreign exchange, brokerage and wealth advisory, and pursue lending opportunities where it lacks scale. Lyons said the company recently added more than 40 commercial middle-market bankers.
The company also announced leadership changes in its consumer and small-business operations. Steve Boland will join as vice chair; Shim Sameer will become chief consumer banking officer after initially being named head of Truist Wealth Management; and Jeff Warner will lead small business banking.
For the fourth quarter, Truist expects approximately $5.35 billion in revenue, including about 5% sequential growth in adjusted non-interest income. It expects reported non-interest expense to rise about 2.5% sequentially, net charge-offs of 45 basis points, and roughly $1 billion in share repurchases. The guidance excludes potential effects from additional strategic actions, including the LightStream sale.
Lyons reiterated Truist’s return targets of 15% ROTCE in 2027 and 16% to 18% over the long term. The company expects to provide a more detailed strategic and financial outlook in early 2027 after completing its review of businesses, operations and resource allocation.
About Truist Financial (NYSE:TFC)
Truist Financial Corporation NYSE: TFC is a financial services company headquartered in Charlotte, North Carolina. Through its principal banking subsidiary, Truist Bank, the company provides a broad range of financial products and services to consumers, small businesses, commercial clients, and institutional customers.
Its offerings include deposit accounts, consumer and small-business lending, mortgages, credit cards, payments, treasury management, commercial and corporate banking, investment banking, wealth management, and asset management.
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