TRUIST FINANCIAL CORP Q4 FY2025 earnings call

Management Statement and Operational Highlights

• Purpose and Strategy: Truist's purpose to inspire and build better lives and communities drives its strategy. Significant investments include enhancing tech and digital capabilities, improving client experience, recruiting talent, opening 100 new insight-driven branches, and enhancing over 300 branch locations.
• 2025 Results: Net income available to common shareholders was $5 billion or $3.82 per diluted share for the full year 2025, and $1.3 billion or $1 per diluted share for the fourth quarter. Strong loan growth, 100 basis points of positive adjusted operating leverage, talent and technology investments, strong asset quality with net charge-offs declining and nonperforming loans stable, and $5.2 billion capital return to shareholders.
• 2026 Focus: Strategic priorities remain to accelerate revenue growth, drive greater positive operating leverage, continue investments while maintaining expense and risk discipline, and return capital to shareholders at an accelerated rate, with a goal to deliver a 15% return on tangible common equity in 2027.

Segment Performance

• Consumer and Small Business Banking (CSBB): In 2025, CSBB saw 5% growth in average consumer and small business loans and 1% growth in average deposits. Loan growth was broad-based, with strong contributions from indirect auto and specialty niche lending platforms like Sheffield, Service Finance, and LightStream. Premier Banking delivered strong results with 2025 production up 22% in deposits, 32% in lending, and 12% in financial plans. In digital, Truist added 77,000 digital new-to-bank clients, up 10% from the prior year quarter, with digital production up 9%, and a 97% increase in digital chat engagement due to the launch of Ask Truist Assist universal search.
• Wholesale: Wholesale had a strong finish in 2025 with average wholesale loans up 3% for the full year, and Q4 average loans up 8% compared to Q4 2024. Investment banking and trading revenue improved in the second half, with Q4 revenues up 28% vs 2024. Wealth had positive net asset flows, and wholesale payment fees rose 8% in 2025, with treasury management fees growing 13% due to new client acquisition and deeper relationships.

Guidance

• Full Year 2026: Revenue is expected to increase 4%-5% relative to 2025 revenue of $20.5 billion, driven by 3%-4% growth in net interest income and mid to high single-digit growth in noninterest income. Noninterest expense is expected to increase 1.25%-2.25% vs 2025's $12.1 billion. Net charge-offs are expected to be about 55 basis points. Target approximately $4 billion in share repurchases during the year.
• Fourth Quarter 2026: Revenue is expected to decrease approximately 2%-3% relative to Q4 2025 revenue of $5.3 billion. Net interest income is expected to decrease 2%-3% primarily due to fewer days in the quarter and seasonal deposit decline. Noninterest income is expected to decline 2%-3% linked quarter. Noninterest expense of $3.2 billion in Q4 is expected to decrease by 4%-5% linked quarter, excluding the impact of the Q4 2025 legal accrual.

Risks

• Macro Concerns: Concerns about the overall economic environment, including whether the economy will hold up to support business growth and deployment of strategies. Employment is a key focus as it impacts financial services. Credit spreads being at tight levels and a fierce competitive marketplace are also areas of concern.

Question and Answer

Q: Ryan Nash asks about loan growth breakdown between commercial and consumer.

A: William Rogers Jr. discusses C&I momentum, rebalancing focus on high client value areas, with consumer businesses like Sheffield and LightStream continuing growth.

Q: Ryan Nash follows up on net interest margin.

A: Mike Maguire talks about margin expansion, deposit betas, and fixed-rate asset repricing contributing to margin improvement throughout the year.

Q: John Pancari inquires about the 15% ROTCE target and components.

A: William Rogers Jr. explains the focus on holding capital steady and improving return from the numerator, highlighting areas like payments, middle market expansion, premier banking, and wealth as accretive to ROTCE.

Q: Scott Siefers asks about capital markets momentum.

A: William Rogers Jr. discusses strong momentum in investment banking, driven by organic activity, talent, and technology, with confidence in continued high growth potential.

Q: Ebrahim Poonawala asks about deposits and wholesale strategy.

A: William Rogers Jr. talks about deposit momentum, leading indicators like treasury management fees and net new clients, and Truist's position as a premier middle market investment bank with specialization and right to win.

Q: Ken Usdin asks about average earning assets trajectory.

A: Mike Maguire explains expectations for securities and cash levels, and how loan growth and earning asset mix contribute to net interest income outlook.

Q: Mike Mayo asks about efficiency ratio and headcount.

A: Mike Maguire discusses expected incremental improvement in the efficiency ratio and how severance charges and headcount changes impact P&L.

Q: Gerard Cassidy asks about surprises to watch in 2026.

A: William Rogers Jr. and Mike Maguire mention macro concerns like economic environment and employment as top risks, along with credit spreads and competitive marketplace.

Q: Chris McGratty asks about net new checking accounts and branch openings.

A: William Rogers Jr. discusses strong net new checking account growth, high quality of new clients, and the start of branch opening strategy with focus on high-return markets.