Truist's reported EPS falls to $0.56 on a $1.4 billion securities loss; adjusted EPS rises 11.5%

Truist reported third-quarter 2026 net income of $799 million, or $0.56 a diluted share, after a $1.4 billion pre-tax loss on the sale of $8.6 billion of available-for-sale securities. Adjusted net income available to common shareholders was $1.4 billion, or $1.16 a diluted share, 11.5% above the $1.04 of a year earlier, and the company agreed on October 14 to sell $7.7 billion of LightStream loans to Carlyle Group Inc.

Third-quarter results, filed with the Securities and Exchange Commission on October 16, 2026, cover the three months ended September 30, 2026 with comparisons for the second quarter of 2026 and the third quarter of 2025. Net income was $799 million, $684 million of it available to common shareholders after preferred dividends, and diluted earnings per share were $0.56, against $1.23 sequentially and $1.04 a year earlier.

A $1.4 billion securities loss lands in reported earnings

Three items separate the reported quarter from the adjusted one: a $1.4 billion pre-tax loss on the sale of available-for-sale securities, a $581 million pre-tax loan loss reserve recapture tied to the RAC loan sale, and $106 million of pre-tax impacts from that sale. Adjusted net income available to common shareholders was $1.4 billion, or $1.16 a diluted share, 11.5% above the $1.04 reported a year earlier; the release rounds that change to 12%.

The loss came from a portfolio swap. Truist sold $8.6 billion of book value available-for-sale securities with a weighted average book yield of 2.67% and a duration of 5.8 years, and bought $7.2 billion of securities with a weighted average yield of 5.60% and a duration of 2.3 years. The presentation calls the transactions modestly accretive to earnings, ROTCE and tangible book value per share, but the loss lands in the reported quarter. Total revenue was $3.75 billion, against $5.27 billion in the second quarter, while adjusted revenue on a taxable-equivalent basis was $5.3 billion, 0.1% below the prior quarter. Noninterest income fell 95% to $84 million on the securities loss and losses from the RAC sale; adjusted noninterest income of $1.6 billion was 2.5% above a year earlier.

Two loan sales shrink the balance sheet

Truist completed the sale of a $5.5 billion RAC auto loan portfolio for $5.2 billion, a transaction the presentation says created $990 million, or 23 bps, of CET1 capital, reduces net charge-offs by about 10 bps a year, and funded repayment of $5.2 billion of borrowings. Chief Executive Officer Mike Lyons said the company "delivered a solid quarter while also taking decisive actions to better position Truist for the future."

On October 14, 2026, two days before the release, Truist signed an agreement to sell $7.7 billion of loans representing substantially all assets of LightStream, its national unsecured lending platform, to Carlyle Group Inc. The presentation expects the sale to generate $7.2 billion of net proceeds, create roughly $850 million, or 20 bps, of CET1 capital, cut net charge-offs by about 7 bps a year, and close in the fourth quarter of 2026 subject to customary closing conditions, with proceeds earmarked to repay wholesale borrowings.

End-of-period loans and leases held for investment were $323.9 billion, down $5.9 billion from June 30, 2026, a sequential decline of 1.8%, with $5.5 billion of that drop from the RAC sale. Deposits ended the quarter at $413.2 billion, up 0.9% from June 30, 2026, and average deposits of $410.7 billion rose 1.4% from the second quarter on a 6.4% sequential increase in interest checking. The net charge-off ratio was 0.77%, including 39 basis points from RAC; excluding RAC it was 0.38%. The allowance for loan and lease losses fell to 1.25% of loans from 1.51%, and nonperforming loans were 0.40% of loans and leases held for investment. The preliminary CET1 ratio was 10.7%, down 20 basis points sequentially. The release attributes that decline mainly to capital returned to shareholders and to the repositioning of the AFS securities portfolio, with current-quarter earnings and the benefits of the RAC loan sale partly offsetting it. Tangible book value per common share was $31.90, down from $33.40 at June 30, 2026 and $32.57 a year earlier; the release gives no driver for that move, while the presentation calls the securities transactions modestly accretive to tangible book value per share.

Deposits and wealth management carry the adjusted quarter

Taxable-equivalent net interest income of $3.71 billion rose 1.1% from the second quarter and 0.7% from a year earlier, helped by an extra day in the quarter and fixed asset and liability repricing, partly offset by lower loan balances; the taxable-equivalent net interest margin was 3.00%. Wealth management income of $407 million was a quarterly record, up 8.5% sequentially and 8.8% from a year earlier on favorable market performance. Noninterest expense of $3.11 billion rose 1.6% sequentially and 3.0% from a year earlier, driven by personnel expense of $1.85 billion, up 6.0%; excluding $40 million of RAC loan sale costs, expense was stable. The effective tax rate fell to 10.7% from 14.4% as the securities loss reduced pre-tax income and raised the relative benefit of tax credits. The board declared $0.52 a share in common dividends while the company repurchased $1.2 billion of stock, and adjusted ROTCE was 14.6% against reported ROTCE of 7.2%.

Fourth-quarter guidance and the LightStream closing

The earnings presentation guides to fourth-quarter revenue on a taxable-equivalent basis of about $5.35 billion, reflecting a $125 million reduction from the RAC loan sale and a $40 million increase from the securities repositioning. The presentation also sets out fourth-quarter net interest income of $3.65 billion to $3.7 billion, noninterest expense growth of 2.5%, a net charge-off ratio of about 0.45%, an effective tax rate near 13.5% and about $1 billion of share repurchases, and says the outlook excludes the impact of potential strategic actions. The presentation adds that a broader strategic review is ongoing without quantifying its cost or benefit. Lyons said in the release that the company remains "confident in our ability to deliver against our near- and long-term ROTCE targets".