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What changed in Truist Financial's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Truist Financial's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+741 added−790 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-27)

Top changes in Truist Financial's 2024 10-K

741 paragraphs added · 790 removed · 540 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

120 edited+48 added−50 removed65 unchanged
Biggest changeWhile FHCs may engage in certain acquisitions without prior approval of the FRB, any acquisition over $10 billion in assets would require prior approval by the FRB. In order to maintain its status as an FHC, Truist and its affiliated IDI must be well-capitalized and well-managed and Truist Bank must have at least a satisfactory CRA rating.
Biggest changeTo maintain its standing as a FHC, Truist and its affiliated IDI must be well-capitalized and well managed and Truist Bank must have at least a satisfactory CRA rating. If the FRB determines that a FHC is not well-capitalized or well managed, the FRB may impose corrective capital and managerial requirements on the FHC.
Website Access to Truist’s Filings with the SEC Truist’s electronic filings with the SEC, including the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to these reports filed or furnished pursuant to Sections 13(a) or 15(d) of the Exchange Act, as amended, are made available at no cost on the Company’s Investor Relations website, IR.Truist.com , as soon as reasonably practicable after Truist files such material with, or furnishes it to, the SEC.
Website Access to Truist’s Filings with the SEC Truist’s electronic filings with the SEC, including the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Sections 13(a) or 15(d) of the Exchange Act are made available at no cost on the Company’s Investor Relations website, IR.Truist.com , as soon as reasonably practicable after Truist files such material with, or furnishes it to, the SEC.
These agencies and organizations generally have broad authority and discretion in restricting and otherwise affecting our businesses and operations and may take formal or informal supervisory, enforcement, and other actions against us when, in the applicable agency’s or organization’s judgment, our businesses or operations fail to comply with applicable law, comport with safe and sound practices, or meet its supervisory expectations.
These agencies and organizations generally have broad authority and discretion in restricting and otherwise affecting our businesses and operations and may take formal or informal supervisory, enforcement, and other actions against us when, in the applicable agency’s or organization’s judgment, our businesses or operations fail to comply with applicable law, comport with safe and sound practices, or meet supervisory expectations.
The FRB may require BHCs, including Truist, to maintain capital ratios in excess of mandated minimum levels, depending upon general economic conditions and a BHC’s particular condition, risk profile, and growth plans. In July 2023, the U.S. banking regulators issued a proposal to revise the risk-based capital standards applicable to the Company and Truist Bank.
The FRB may require BHCs, including Truist, to maintain capital ratios in excess of mandated minimum levels, depending upon general economic conditions and a BHC’s particular condition, risk profile, and growth plans. In July 2023, the U.S. banking regulators issued a proposal to revise the risk-based capital standards applicable to Truist and Truist Bank.
For teammates who qualify, Truist also provides tuition assistance so teammates can continue formal education by seeking degrees that align with career goals and/or develop needed emerging skills through our Future Skills program. Truist offers career and job transparency through a comprehensive set of resources including career discovery and career planning online services.
For teammates who qualify, Truist also provides tuition assistance so teammates can continue formal education by seeking degrees that align with career goals or develop needed emerging skills through our Future Skills program. Truist offers career and job transparency through a set of resources including career discovery and career planning online services.
Truist and certain of its subsidiaries and affiliates, including those that engage in derivatives transactions, securities underwriting, market making, brokerage, investment advisory, and insurance activities, are subject to other federal and state laws and regulations, as well as supervision and examination by other federal and state regulatory agencies and other regulatory authorities, including the SEC, CFTC, FINRA, and NFA.
Truist and certain of its subsidiaries and affiliates, including those that engage in derivatives transactions, securities underwriting, market making, brokerage, and investment advisory activities, are subject to other federal and state laws and regulations, as well as supervision and examination by other federal and state regulatory agencies and other regulatory authorities, including the SEC, CFTC, FINRA, and NFA.
Longstanding federal regulations require a FHC to act as a source of financial and managerial strength for its subsidiary banks. In times of severe financial stress, the obligation to serve as a source of strength could cause Truist to commit significant resources to supporting Truist Bank that otherwise would be available to Truist’s creditors and shareholders.
Federal regulations require a FHC to act as a source of financial and managerial strength for its subsidiary banks. In times of severe financial stress, the obligation to serve as a source of strength could cause Truist to commit significant resources to supporting Truist Bank that otherwise would be available to Truist’s creditors and shareholders.
The federal consumer financial protection laws that are subject to the CFPB’s supervision and enforcement powers include, among others, the Truth in Lending Act, Truth in Savings Act, Home Mortgage Disclosure Act, Fair Credit Reporting Act, Electronic Funds Transfer Act, Real Estate Settlement Procedures Act, Fair Debt Collection Practices Act, Equal Credit Opportunity Act, and Fair Housing Act.
The federal consumer financial protection laws that are subject to the CFPB’s supervision and enforcement powers include, among others, the Truth in Lending Act, Truth in Savings Act, Home Mortgage Disclosure Act, Fair Credit Reporting Act, Electronic Funds Transfer Act, Real Estate Settlement Procedures Act, Fair Debt Collection Practices Act, and Equal Credit Opportunity Act.
Truist Financial Corporation 9 Long-Term Debt and Clean Holding Company Requirements In August 2023, the U.S. banking regulators proposed a rule that would require banking organizations with $100 billion or more in total assets to comply with long-term debt requirements and clean holding company requirements that currently apply only to GSIBs.
Truist Financial Corporation 9 Long-Term Debt and Clean Holding Company Requirements In 2023, the U.S. banking regulators proposed a rule that would require banking organizations with $100 billion or more in total assets to comply with long-term debt requirements and clean holding company requirements that currently apply only to GSIBs.
Examinations by regulators consider not only compliance with applicable laws, regulations, and supervisory policies of the agency, but also capital levels, asset quality, risk management effectiveness, the ability and performance of management and the board of directors, the effectiveness of internal controls, earnings, liquidity, and various other factors.
Examinations by regulators consider not only compliance with applicable laws, regulations, and supervisory policies of the agency, but also capital levels, asset quality, risk management effectiveness, the ability and performance of management and the Board, the effectiveness of internal controls, earnings, liquidity, and various other factors.
Failure to meet capital guidelines may subject a banking organization to a variety of other enforcement remedies, including additional substantial restrictions on its operations and activities, termination of deposit insurance by the FDIC and, under certain conditions, the appointment of a conservator or receiver. 10 Truist Financial Corporation Transactions with Affiliates There are various legal restrictions on the extent to which Truist and its non-bank subsidiaries may borrow or otherwise engage in certain types of transactions with Truist Bank.
Failure to meet capital guidelines may subject a banking organization to a variety of other enforcement remedies, including additional substantial restrictions on its operations and activities, termination of deposit insurance by the FDIC and, under certain conditions, the appointment of a conservator or receiver. 10 Truist Financial Corporation Transactions with Affiliates There are various legal restrictions on the extent to which Truist and its nonbank subsidiaries may borrow or otherwise engage in certain types of transactions with Truist Bank.
Truist’s benefits program for qualified teammates includes a company-funded defined benefit pension plan, a 401(k) Plan, an employee stock purchase plan, Truist Momentum financial well-being education, healthcare and insurance benefits, Lifeforce physical well-being program, mental well-being support, paid time off, teammate and family resources such as access to backup child-care centers and family care resources, tuition assistance, and on-site services such as health centers and fitness centers.
Truist Financial Corporation 17 Truist’s benefits program for qualified teammates includes a company-funded defined benefit pension plan, a 401(k) plan, an employee stock purchase plan, Truist Momentum financial well-being education, healthcare and insurance benefits, Lifeforce physical well-being program, mental well-being support, paid time off, teammate and family resources such as access to backup child-care centers and family care resources, tuition assistance, and on-site services such as health centers and fitness centers.
These guidelines require each financial institution, under the supervision and ongoing oversight of its board of directors or an appropriate committee thereof, to create, implement, and maintain a comprehensive written information security program designed to ensure the security and confidentiality of customer information, protect against any anticipated threats or hazards to the security or integrity of such information and protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer.
These guidelines require each financial institution, under the supervision and ongoing oversight of its board of directors or an appropriate committee thereof, to create, implement, and maintain a comprehensive written information security program designed to support the security and confidentiality of customer information, protect against any anticipated threats or hazards to the security or integrity of such information and protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer.
Successfully competing in our markets also depends on our ability to innovate, to invest in technology and infrastructure, to execute transactions reliably and efficiently, to maintain and enhance our reputation, and to attract, retain, and motivate talented employees, all while effectively managing risks and expenses. We expect that competition will only intensify in the future.
Successfully competing in our markets also depends on our ability to innovate, to invest in technology and infrastructure, to execute transactions reliably and efficiently, to maintain and enhance our reputation, and to attract, retain, and motivate talented teammates, all while effectively managing risks and expenses. We expect that competition will only intensify in the future.
The rule is expected to result in a significant increase in the thresholds for large banks to receive “Outstanding” ratings in the future. The rule is expected to take effect on April 1, 2024, with most of the provisions becoming applicable on January 1, 2026. Reporting of the collected data will not be required until 2027.
The rule was expected to result in a significant increase in the thresholds for large banks to receive “Outstanding” ratings in the future. The rule was expected to take effect on April 1, 2024, with most of the provisions becoming applicable on January 1, 2026. Reporting of the collected data will not be required until 2027.
Capital Requirements Truist and Truist Bank are subject to certain risk-based and leverage capital ratio requirements established by the FRB, for Truist, and by the FDIC, for Truist Bank.
Capital Requirements Truist and Truist Bank are subject to certain risk-based and leverage capital ratio requirements. These are established by the FRB, for Truist, and by the FDIC, for Truist Bank.
These laws and regulations, as well as proposed legislation, are still subject to revision or formal guidance and may be interpreted or applied in a manner inconsistent with the Company’s understanding, which may result in further uncertainty and require Truist to incur additional costs to comply.
These laws and regulations, as well as proposed legislation and regulation, are subject to revision or formal guidance and may be interpreted or applied in a manner inconsistent with the Company’s understanding, which may result in further uncertainty and require Truist to incur additional costs to comply.
Competition affects every aspect of our business, including product and service offerings and features, rates, pricing and fees, credit limits, and client service.
Competition affects every aspect of our business, including product and service offerings, rates, pricing and fees, credit limits, and client service.
In addition, transactions between Truist Bank and its non-bank affiliates are required to be on arm’s length terms and must be consistent with standards of safety and soundness. Acquisitions Truist is subject to numerous laws that may require regulatory approval for acquisitions.
In addition, transactions between Truist Bank and its nonbank affiliates are required to be on arm’s length terms and must be consistent with standards of safety and soundness. Acquisitions Truist is subject to numerous laws that may require regulatory approval for acquisitions.
Truist Bank would be required to issue the minimum amount of eligible long-term debt to the Company, and the Company would be required to issue the minimum amount of eligible long-term debt externally.
Truist Bank would be required to issue the minimum amount of eligible long-term debt to Truist, and Truist would be required to issue the minimum amount of eligible long-term debt externally.
In addition, various U.S. regulators, including the FRB and the SEC, have increased their focus on cybersecurity through guidance, examinations, and regulations. At the federal level, the Gramm-Leach-Bliley Act requires financial institutions to, among other things, implement policies and procedures regarding the disclosure of nonpublic personal information about consumers to non-affiliated third parties.
In addition, various U.S. regulators, including the FRB and the SEC, have increased their focus on cybersecurity through guidance, examinations, and regulations. Truist Financial Corporation 13 At the federal level, the Gramm-Leach-Bliley Act requires financial institutions to, among other things, implement policies and procedures regarding the disclosure of nonpublic personal information about consumers to non-affiliated third parties.
Failure to be well-capitalized or to meet minimum capital requirements could result in certain mandatory and discretionary actions by regulators that, if undertaken, could have an adverse material effect on Truist’s operations or financial condition.
Failure to be well-capitalized or to meet minimum capital requirements could result in certain mandatory and discretionary actions by regulators that, if undertaken, could have an adverse material effect on our operations or financial condition.
The ultimate amount of expenses associated with the special assessment will also be impacted by the finalization of the losses incurred by the FDIC in the resolutions of Silicon Valley Bank and Signature Bank, which could result in additional expense.
The ultimate amount of expenses associated with the special assessment will also be impacted by the finalization of the losses incurred by the FDIC in the resolutions of Silicon Valley Bank, Signature Bank, and First Republic Bank, which could result in additional expense.
Under the Federal Reserve Act and FRB regulations, Truist Bank and its subsidiaries are subject to quantitative and qualitative limits on extensions of credit, purchases of assets, and certain other transactions involving its non-bank affiliates.
Under the Federal Reserve Act and FRB regulations, Truist Bank and its subsidiaries are subject to quantitative and qualitative limits on extensions of credit, purchases of assets, and certain other transactions involving its nonbank affiliates.
Consumer Protection Laws and Regulations In connection with its lending and leasing activities, Truist Bank is subject to a number of federal and state laws designed to protect borrowers and promote lending to various sectors of the economy and population.
Consumer Protection Laws and Regulations In connection with its lending and leasing activities, Truist Bank is subject to federal and state laws designed to protect borrowers and promote lending to various sectors of the economy and population.
Truist Financial Corporation 13 Like other lenders, Truist Bank uses credit bureau data in its underwriting activities. The Fair Credit Reporting Act regulates reporting information to credit bureaus, prescreening individuals for credit offers, sharing of information between affiliates, and using affiliate data for marketing purposes. Similar state laws may impose additional requirements on Truist Bank.
Like other lenders, Truist Bank uses credit bureau data in its underwriting activities. The Fair Credit Reporting Act regulates reporting information to credit bureaus, prescreening individuals for credit offers, sharing of information between affiliates, and using affiliate data for marketing purposes. Similar state laws may impose additional requirements on Truist Bank.
Capital Planning and Stress Testing Requirements In addition to the regulatory capital requirements, under the FRB’s CCAR process, Truist must submit an annual capital plan to the FRB that reflects its projected financial performance under hypothetical macro-economic scenarios, including a supervisory severely adverse scenario provided by the FRB.
Capital Planning and Stress Testing Requirements In addition to the regulatory capital requirements, under the FRB’s CCAR process and related capital plan rule, Truist must submit an annual capital plan to the FRB that reflects its projected financial performance under hypothetical macro-economic scenarios, including stress scenarios designed by Truist and a supervisory severely adverse scenario provided by the FRB.
A range of competitors differ from us in their strategic and tactical priorities and, for example, may be willing to suffer meaningful financial losses in the pursuit of disruptive innovation and client growth or to accept more aggressive business, compliance, and other risks in the pursuit of higher returns and market valuations.
Certain competitors differ from us in their strategic and tactical priorities and, for example, may be willing to suffer meaningful financial losses in the pursuit of disruptive innovation and client growth or to accept more aggressive business, compliance, and other risks in the pursuit of higher returns and market valuations.
Following examinations by banking agencies, Truist and Truist Bank receive supervisory findings and ultimately are assigned supervisory ratings. Examination reports, supervisory ratings, and other actions under this supervisory framework, which are considered confidential supervisory information, can impact the conduct, growth, and profitability of Truist’s operations, possibly to a significant degree.
Following examinations by banking supervisors, Truist and Truist Bank may receive supervisory findings and ultimately are assigned supervisory ratings. Examination reports, supervisory ratings, and other actions under this supervisory framework, which are considered confidential supervisory information, can impact the conduct, growth, and profitability of Truist’s operations, possibly to a significant degree.
If the full countercyclical buffer amount is implemented, Truist would be required to maintain a CET1 capital ratio of at least 9.9%, a Tier 1 capital ratio of at least 11.4%, and a Total capital ratio of at least 13.4% to avoid limitations on capital distributions and certain discretionary incentive compensation payments.
If the full countercyclical buffer amount is implemented, Truist would be required to maintain a CET1 capital ratio of at least 9.8%, a Tier 1 capital ratio of at least 11.3%, and a Total capital ratio of at least 13.3% to avoid limitations on capital distributions and certain discretionary incentive compensation payments.
Truist is required to submit its next capital plan and the results of its own stress tests to the FRB by April 5, 2024. The FRB is required to announce the results of its supervisory stress tests by June 30, 2024.
Truist is required to submit its next capital plan and the results of its own stress tests to the FRB by April 5, 2025. The FRB is required to announce the results of its supervisory stress tests by June 30, 2025.
In addition, if adopted as proposed, the clean holding company requirement would limit or prohibit the Company from entering into certain transactions that could impede its orderly resolution, including, for example, prohibiting the Company from entering into transactions that could spread losses to subsidiaries and third parties, as well as limiting the amount of the Company’s liabilities that are not eligible long-term.
In addition, if adopted as proposed, the clean holding company requirement would limit or prohibit Truist from entering into certain transactions that could impede its orderly resolution, including, for example, prohibiting Truist from entering into transactions that could spread losses to subsidiaries and third parties, as well as limiting the amount of Truist’s liabilities that are not eligible long-term debt.
The proposed rule also would require data providers holding a consumer account, such as Truist Bank, to establish a developer interface satisfying certain data security specifications and other standards, through which the data provider can receive requests for, and provide, specific types of data covered by the rule in electronic, usable form to authorized third parties, including data aggregators.
The rule also requires data providers holding a consumer account, such as Truist Bank, to establish a developer interface satisfying certain data security specifications and other standards, through which the data provider can receive requests for, and provide, specific types of data covered by the rule in electronic, usable form to authorized third parties, including data aggregators.
These factors include the competitive effects of the proposal in the relevant geographic markets; the financial and managerial resources and future prospects of the companies and banks involved in the transaction; the effect of the transaction on the financial stability of the United States; the organizations’ compliance with anti-money laundering laws and regulations; the convenience and needs of the communities to be served; and the records of performance under the CRA of the IDIs involved in the transaction.
These factors include the competitive effects of the proposal in the relevant geographic markets; the financial and managerial resources and future prospects of the companies and banks involved in the transaction; the effect of the transaction on the financial stability of the U.S.; the organizations’ compliance with anti-money laundering laws and regulations; the convenience and needs of the communities to be served; and the records of performance under the CRA of the IDIs involved in the transaction.
Stengel Senior Executive Vice President, Chief Legal Officer, and Head of Government Affairs Chief Legal Officer and Head of Government Affairs since December 2023. General Counsel at Ally Financial Inc. from May 2016 to December 2023. — 52 Kristin Lesher Senior Executive Vice President and Chief Wholesale Banking Officer Chief Wholesale Banking Officer since February 2024.
Stengel Senior Executive Vice President, Chief Legal Officer, and Head of Government Affairs Chief Legal Officer and Head of Government Affairs since December 2023. General Counsel at Ally Financial Inc. from May 2016 to December 2023. 1 53 Kristin Lesher Senior Executive Vice President and Chief Wholesale Banking Officer Chief Wholesale Banking Officer since February 2024.
The Patriot Act imposes substantial obligations on financial institutions to maintain appropriate policies, procedures and processes to detect, prevent, and report money laundering, terrorist financing, and other financial crimes. Failure to comply with these regulations may result in fines, penalties, lawsuits, regulatory sanctions, reputational damage, or restrictions on business.
The BSA further imposes substantial obligations on financial institutions to maintain appropriate policies, procedures, and processes to detect, prevent, and report money laundering, terrorist financing, and other financial crimes. Failure to comply with these regulations may result in fines, penalties, lawsuits, regulatory sanctions, reputational damage, or restrictions on business.
Truist Financial Corporation 5 Regulatory and Supervisory Considerations We are subject to significant regulatory frameworks that affect the products and services that we may offer and the manner in which we may offer them, the risks that we may take, the ways in which we may operate, and the corporate and financial actions that we may take.
Regulatory and Supervisory Considerations We are subject to significant regulatory frameworks that affect the products and services that we may offer and the manner in which we may offer them, the risks that we may take, the ways in which we may operate, and the corporate and financial actions that we may take.
Our competitors may be subject to different and, in some cases, less stringent legislative, regulatory, and supervisory regimes than ours.
Our competitors may be subject to different and, in some cases, less stringent legislative, regulatory, and supervisory regimes than Truist.
Resolution Planning As a Category III banking organization, Truist is required to submit to the FRB and FDIC a resolution plan every three years with submissions alternating between a full resolution plan and a targeted resolution plan.
Resolution Planning As a Category III banking organization, Truist is required to submit to the FRB and FDIC a resolution plan every three years with submissions alternating between a full resolution plan and a targeted resolution plan (a “165(d) Resolution Plan”).
Truist recognizes that attracting the best talent, making investments in teammates, caring to better understand their backgrounds and experiences, and helping to bolster their career trajectory ultimately leads to more engaged and productive teammates, which can contribute to better business outcomes for Truist overall.
Truist recognizes that attracting the best talent, making investments in teammates, caring to better understand their backgrounds and experiences, and helping to bolster their career trajectories ultimately leads to more engaged and productive teammates, which can contribute to better client service and business outcomes for Truist overall.
Truist Bank is also subject to additional state and federal laws, as well as various compliance regulations, which govern its activities, the investments it makes, and the aggregate amount of loans that may be granted to one borrower.
Truist Bank is subject to additional state and federal laws, as well as various regulations, which govern its activities, the investments it may make, and the aggregate amount of loans that may be granted to one borrower.
Truist Financial Corporation 11 DIF Assessments Truist Bank’s deposits are insured by the FDIC up to the applicable limits, which is currently $250,000 per account ownership type.
DIF Assessments Truist Bank’s deposits are insured by the FDIC up to the applicable limits, which is currently $250,000 per account ownership type.
In November 2021, the FRB, OCC, and FDIC adopted a new regulation that, among other things, requires a banking organization to notify its primary federal regulators as soon as possible and within 36 hours after identifying a “computer-security incident” that the banking organization believes in good faith is reasonably likely to materially disrupt or degrade its business or operations in a manner that would, among other things, jeopardize the viability of its operations, result in customers being unable to access their deposit and other accounts, result in a material loss of revenue, profit or stock price, or pose a threat to the financial stability of the U.S.
A joint regulation from the FRB, OCC, and FDIC requires a banking organization to notify its primary federal regulators as soon as possible and within 36 hours after identifying a “computer-security incident” that the banking organization believes in good faith has materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade its business or operations in a manner that would, among other things, jeopardize the viability of its operations, result in customers being unable to access their deposit and other accounts, result in a material loss of revenue, profit or stock price, or pose a threat to the financial stability of the U.S.
As such, Truist is subject to more stringent liquidity and capital requirements, leverage limits, stress testing, single-counterparty credit limits, resolution planning and risk management standards than those applicable to smaller institutions. Certain larger banking organizations are subject to additional enhanced prudential standards.
Truist is subject to more stringent liquidity and capital requirements, leverage limits, stress testing, single-counterparty credit limits, resolution planning, and enhanced risk management standards than those applicable to smaller institutions, while certain larger banking organizations are subject to even more enhanced prudential standards than Truist.
The FRB assigned Truist an SCB of 2.9%, which is effective from October 1, 2023 to September 30, 2024, at which point a revised SCB will be calculated and provided to Truist.
The FRB assigned Truist an SCB of 2.8%, which is effective from October 1, 2024 to September 30, 2025, at which point a revised SCB will be calculated and provided to Truist.
These quantitative calculations are minimums, and the FRB and FDIC may determine that a banking organization, based on its size, complexity, or risk profile, must maintain a higher level of capital in order to operate in a safe and sound manner.
These quantitative calculations prescribe minimum capital levels, and the FRB and FDIC may determine that a banking organization, based on its size, complexity, or risk profile, must maintain a higher level of capital to operate in a safe and sound manner.
FHC Regulation Truist has elected to be treated as an FHC, which allows it to engage in a broader range of activities than would otherwise be permissible for a BHC, including activities that are financial in nature or incidental thereto, such as securities underwriting or merchant banking.
The intensity of supervision has increased in recent years. FHC Regulation Truist has elected to be treated as a FHC, which allows it to engage in a broader range of activities than would otherwise be permissible for a BHC, including activities that are financial in nature or incidental thereto, such as securities underwriting or merchant banking.
If adopted, this proposal would require the Company and Truist Bank to each maintain a minimum outstanding eligible long-term debt amount of no less than the greatest of (i) 6% of risk-weighted assets, (ii) 2.5% of total leverage exposure and (iii) 3.5% of average total consolidated assets.
If adopted, this proposal would require Truist and Truist Bank to each maintain a minimum outstanding eligible long-term debt amount equal to the largest of (i) 6% of risk-weighted assets, (ii) 2.5% of total leverage exposure, and (iii) 3.5% of average total consolidated assets.
Under the proposed rule, data providers would be prohibited from charging consumers or third parties fees for processing these consumer data requests. The proposed rule would also place certain data security, authorization, and other obligations on third parties accessing covered data from data providers, which could include Truist and Truist Bank when acting in certain capacities.
Data providers are prohibited from charging consumers or third parties fees for processing these consumer data requests. The rule also places certain data security, authorization, and other obligations on third parties accessing covered data from data providers, which could include Truist and Truist Bank when acting in certain capacities.
Truist’s subsidiaries compete actively with national, regional, and local financial services providers, including banks, thrifts, credit unions, investment advisers, asset managers, securities brokers and dealers, private-equity funds, hedge funds, mortgage-banking companies, finance companies, financial technology companies, and insurance companies.
Truist competes actively with national, regional, and local financial services providers, including banks, thrifts, credit unions, investment advisers, asset managers, securities brokers and dealers, private-equity funds, hedge funds, mortgage-banking companies, finance companies, and financial technology companies.
In addition, the Patriot Act requires the federal bank regulatory agencies to consider the effectiveness of a financial institution’s anti-money laundering activities when reviewing bank mergers and BHC acquisitions. 12 Truist Financial Corporation BSA/AML and Sanctions Truist continues to be subject to examinations and ongoing monitoring to assess compliance with BSA/AML and OFAC laws and regulations.
In addition, the Patriot Act requires the federal bank regulatory agencies to consider the effectiveness of a financial institution’s anti-money laundering activities when reviewing bank mergers and BHC acquisitions. BSA/AML and Sanctions Financial institutions that are subject to the BSA are subject to examinations and ongoing monitoring to assess compliance with BSA/AML and OFAC laws and regulations.
Table 4: Teammate Diversity (1) Gender Race / Ethnicity Female Male Caucasian Black/African American Hispanic or Latino Asian American Indian/Alaska Native Native Hawaiian/Other Pacific Islander Two or More Races Executive management & senior leaders 27.7 % 72.3 % 82.9 % 7.5 % 3.8 % 4.3 % 0.3 % — % 1.2 % First / mid-level managers 52.8 47.2 70.3 13.5 7.8 6.0 0.4 0.1 1.9 Professionals 48.3 51.7 66.2 15.6 6.0 9.6 0.5 0.2 1.9 All others 75.7 24.3 53.8 23.9 14.3 3.9 0.8 0.3 3.0 All teammates 62.9 37.1 60.5 19.5 10.6 6.1 0.6 0.2 2.5 (1) Source: EEO-1 data as of December 31, 2022.
Table 4: Teammate Composition (1) Gender Race / Ethnicity Female Male Caucasian Black/African American Hispanic or Latino Asian American Indian/Alaska Native Native Hawaiian/Other Pacific Islander Two or More Races Executive management & senior leaders 27.8 % 72.2 % 81.2 % 9.0 % 3.8 % 4.6 % 0.3 % — % 1.1 % First / mid-level managers 53.9 46.1 69.0 14.1 8.0 6.5 0.4 0.1 1.9 Professionals 48.9 51.1 65.1 15.6 6.3 10.5 0.5 0.2 1.8 All others 75.4 24.6 54.3 23.2 14.5 4.0 0.8 0.3 2.9 All teammates 62.7 37.3 60.5 19.1 10.6 6.6 0.6 0.2 2.4 (1) Source: EEO-1 data as of December 31, 2023.
We strive to maintain constructive relationships with supervisory authorities. The regulatory and supervisory framework applicable to banking organizations is intended primarily for the protection of depositors and other customers, the DIF, the broader economy, and the stability of the U.S. financial system, rather than for the protection of shareholders and non-deposit creditors.
The regulatory and supervisory framework applicable to banking organizations is intended primarily for the protection of depositors and other customers, the DIF, the broader economy, and the stability of the U.S. financial system, rather than for the protection of shareholders and non-deposit creditors.
Truist’s SEC filings are also available through the SEC’s website at sec.gov . Truist may use its website to distribute company information, including as a means of disclosing material, non-public information and for complying with its disclosure obligations under Regulation FD. Truist routinely posts and makes accessible financial and other information, including corporate responsibility information, regarding Truist on its website.
Truist’s SEC filings are also available through the SEC’s website at sec.gov . Truist may use its website to distribute Company information, including as a means of disclosing material, non-public information and for complying with its disclosure obligations under Regulation FD.
In addition, the proposal requires category III and IV financial institutions to include certain components of AOCI in the calculation of regulatory capital, as well as change the calculation of certain deductions consistent with standards in place for category I and II financial institutions.
In addition, the proposal requires Category III and IV financial institutions to include certain components of AOCI in the calculation of regulatory capital, as well as change the calculation of certain deductions consistent with standards in place for Category I and II financial institutions. The FRB has indicated the intent to re-propose the revised risk-based capital standards.
Chief Risk Officer since July 2009. 41 64 Dontá L. Wilson Senior Executive Vice President and Chief Consumer & Small Business Banking Officer Chief Consumer & Small Business Banking Officer since November 2023. Chief Retail & Small Business Banking Officer from March 2022 to November 2023. Chief Digital and Client Experience Officer from November 2018 to March 2022.
Wilson Senior Executive Vice President and Chief Consumer & Small Business Banking Officer Chief Consumer & Small Business Banking Officer since November 2023. Chief Retail & Small Business Banking Officer from March 2022 to November 2023. Chief Digital and Client Experience Officer from November 2018 to March 2022.
The ability of non-banking entities, including financial technology companies, to provide financial products and services directly as well as indirectly through partnerships has increased competition. Many of our competitors have substantial positions nationally or in the markets in which we operate. Some also have greater scale, financial and operational resources, investment capacity, and brand recognition.
At the same time, non-banking entities, including financial technology companies, have increased competition by providing financial products and services directly to customers and indirectly through partnerships. Many of our competitors have substantial positions nationally or in the markets in which we operate. Some also have greater scale, financial and operational resources, investment capacity, product and service offerings, and brand recognition.
To be considered “well managed” under this rating system, a firm must be rated “broadly meets expectations” or “conditionally meets expectations” for each of its three component ratings. 6 Truist Financial Corporation The results of examinations by any of Truist’s federal bank regulators can result in the imposition of significant limitations on Truist’s activities and growth.
To be considered “well managed” under this rating system, a firm must be rated “broadly meets expectations” or “conditionally meets expectations” for each of its three component ratings. Depending on the results of examinations of Truist, federal or state bank regulators can impose significant limitations on our activities and growth.
All others include sales workers and administrative support EEO-1 job categories. Talent Development and Engagement Truist teammates have access to extensive programs and benefits for career advancement. Teammates can partner with a certified coach to help them identify and focus on potential career paths, create clear goals, and remain accountable in achieving those goals.
Talent Development Truist teammates have access to extensive programs and benefits for career advancement. Teammates can partner with a certified coach to help them identify and focus on potential career paths, create clear goals, and remain accountable in achieving those goals.
In addition, Truist Bank, as an IDI, is required by FDIC regulation to file a separate bank level resolution plan every three years.
In addition, Truist Bank, as an IDI, is required by FDIC regulation to file a separate bank level resolution plan every three years (an “IDI Resolution Plan”). Truist Bank submitted its inaugural IDI Resolution Plan to the FDIC in November 2022.
The following table reflects examples of services provided by Truist: Table 1: Services Consumer Services: Commercial Services: Asset management Asset based lending Automobile lending Asset management Credit card lending Commercial deposit and treasury services Consumer finance Commercial lending Home equity and other direct retail lending Floor plan lending Home mortgage lending Derivatives Insurance Institutional trust services Investment brokerage services Insurance Mobile/online banking Insurance premium finance Payment solutions International banking Point-of-sale lending Investment banking and capital markets services Retail and small business deposit products Leasing Small business lending Merchant services Wealth management/private banking Mortgage warehouse lending Payment solutions Real estate lending Supply chain financing Market Area The following table reflects Truist’s deposit market share and branch locations by state: Table 2: Deposit Market Share and Branch Locations by State % of Truist’s Deposits (2) Deposit Market Share Rank (2) Number of Branches (3) Florida 23 % 3rd 452 Georgia 19 1st 213 Virginia 15 2nd 265 North Carolina (1) 13 2nd 285 Maryland 7 3rd 145 Tennessee 5 4th 100 Pennsylvania 4 9th 146 South Carolina 4 3rd 98 Texas 3 21st 99 West Virginia 2 1st 43 Kentucky 2 4th 55 Washington, D.C. 1 5th 22 Alabama 1 6th 51 New Jersey 1 24th 21 Other states NA NA 6 (1) Deposit market share rank excludes home office deposits.
Examples of these products and services include: Table 1: Products and Services Consumer Services: Wholesale Services: Asset management Asset based lending Automobile lending Asset management Credit card lending Commercial deposit and treasury services Consumer finance Commercial lending Home equity and other direct retail lending Floor plan lending Home mortgage lending Derivatives Investment brokerage services Institutional trust services Mobile/online banking Insurance premium finance Payment solutions International banking Point-of-sale lending Investment banking and capital markets services Retail and small business deposit products Leasing Small business lending Merchant services Mortgage warehouse lending Payment solutions Real estate lending Supply chain financing Wealth management/private banking Market Area The following table details Truist Bank’s deposit market share and branch locations by state: Table 2: Deposit Market Share and Branch Locations by State % of Truist’s Deposits (2) Deposit Market Share Rank (2) Number of Branches (3) Florida 23 % 4th 441 Georgia 19 1st 202 Virginia 15 1st 260 North Carolina (1) 13 2nd 276 Maryland 7 3rd 138 Tennessee 5 5th 98 Pennsylvania 4 12th 136 South Carolina 4 3rd 95 Texas 3 20th 96 West Virginia 2 2nd 42 Kentucky 2 4th 53 Washington, D.C. 1 5th 18 Alabama 1 6th 49 New Jersey 1 25th 20 Other states NA NA 4 (1) Deposit market share rank excludes home office deposits.
These regulatory agencies generally have broad enforcement authority and discretion to impose restrictions and limitations on the operations of a regulated entity, including the imposition of substantial monetary penalties and nonmonetary requirements against a regulated entity where the relevant agency determines that the operations of the regulated entity or any of its subsidiaries fail to comply with applicable laws or regulations, are conducted in an unsafe or unsound manner, represent an unfair, deceptive, abusive act or practice, or do not meet supervisory expectations.
Examples of restrictions and limitations include the imposition of substantial monetary penalties and nonmonetary requirements where the relevant agency determines that the operations of the regulated entity or any of its subsidiaries fail to comply with applicable laws or regulations, are conducted in an unsafe or unsound manner, engage in an unfair, deceptive, abusive act or practice, or do not meet supervisory expectations.
Refer to the “Capital” section in MD&A for disclosures containing the minimum regulatory capital ratios and well-capitalized minimum ratios applicable to Category III banking organizations.
The potential impacts on Truist and Truist Bank of a final rule remains uncertain. Refer to the “Capital” section in MD&A for disclosures containing the minimum regulatory capital ratios and well-capitalized minimum ratios applicable to Category III banking organizations.
This enforcement authority includes, among other things, the ability to assess significant civil or criminal monetary penalties, fines, or restitution; to issue cease and desist or prohibition orders; and to initiate injunctive actions against financial institutions and institution-affiliated parties. These enforcement actions may be initiated for violations of laws and regulations or unsafe and unsound practices.
DOJ, among other government agencies, with respect to AML and OFAC laws and regulations. This enforcement authority includes, among other things, the ability to assess significant civil or criminal monetary penalties, fines, or restitution; to issue cease and desist or prohibition orders; and to initiate injunctive actions against financial institutions and institution-affiliated parties.
FINRA is the primary self-regulatory organization for Truist’s registered broker-dealer subsidiaries. Truist’s broker-dealer and investment adviser subsidiaries also are subject to additional regulation by states or local jurisdictions.
Truist’s broker-dealer and investment adviser subsidiaries also are subject to additional regulation by states or local jurisdictions.
In addition to career development opportunities, Truist provides a differentiated learning experience to new and existing teammates to build the skills needed now and in the future, including role skill preparedness, upskilling for the future and access to skill building content for teammate-led learning.
In addition to career development opportunities, Truist provides learning experiences to new and existing teammates to help build the skills needed now and in the future, including role skill preparedness, upskilling for the future, and access to skill building content for teammate-led learning. Truist Learning and Development also prioritizes and integrates regulatory-related training to mitigate risk across the organization.
If the Company makes changes in, or provides waivers from, the provisions of its code of ethics that the SEC requires it to disclose, the Company intends to disclose these events in the “Governance & Responsibility” section of its Investor Relations website. Truist Financial Corporation 17 Executive Officers Executive Officer Recent Work Experience Years of Service Age William H.
If the Company makes changes in, or provides waivers from, the provisions of its Code of Ethics that the SEC requires it to disclose, the Company intends to disclose these events in the “Governance & Responsibility” section of its Investor Relations website.
The NSFR, calculated as the ratio of available stable funding to required stable funding, must exceed 1.0x. Available stable funding represents a weighted measure of a company’s funding sources over a one-year time horizon, calculated by applying standardized weightings to the company’s equity and liabilities based on their expected stability.
Available stable funding represents a weighted measure of a company’s funding sources over a one-year time horizon, calculated by applying standardized weightings to the company’s equity and liabilities based on their expected stability. Required Stable Funding is calculated by applying standardized weightings to assets, derivatives exposures, and certain other items based on their liquidity characteristics.
Upon review of the plan, the agencies may jointly determine that a resolution plan is not credible or would not facilitate an orderly resolution under the U.S. Bankruptcy Code.
Upon review of the plan, the agencies may jointly determine that a resolution plan is not credible or would not facilitate an orderly resolution under the U.S. Bankruptcy Code. Upon making this determination, the agencies would provide a joint notice identifying one or more deficiencies that could undermine the feasibility of the resolution plan.
The assessment rate schedule can change from time to time at the discretion of the FDIC, subject to certain limits. Under the current system, premiums are assessed quarterly.
The assessment rate schedule can change from time to time at the discretion of the FDIC, subject to certain limits. Under the current system, premiums are assessed quarterly. The FDIC implemented a special assessment to recoup losses to the DIF associated with bank failures in 2023.
Truist’s non-bank subsidiaries are also subject to rules and regulations issued by the Federal Trade Commission, which regulates unfair or deceptive acts or practices, including with respect to data privacy, data protection, and cybersecurity. Moreover, the U.S.
Truist’s nonbank subsidiaries are also subject to rules and regulations issued by the Federal Trade Commission, which regulates unfair or deceptive acts or practices, including with respect to data privacy, data protection, and cybersecurity. Moreover, the U.S. Congress has recently considered, and is expected to continue to consider various proposals for, more comprehensive data privacy, data protection, and cybersecurity legislation.
In addition, laws in all 50 U.S. states generally require businesses to provide notice under certain circumstances to individuals whose personal information has been disclosed as a result of a data breach.
In addition, laws in all 50 U.S. states generally require businesses to provide notice under certain circumstances to individuals whose personal information has been disclosed as a result of a data breach. Moreover, the New York Department of Financial Services Cybersecurity Regulation is driving significant cybersecurity compliance activities for Truist.
Truist offers a wide range of products and services through its wholesale and consumer businesses, including consumer and small business banking, commercial banking, corporate and investment banking, insurance, wealth management, payments, and specialized lending businesses. Headquartered in Charlotte, North Carolina, Truist is a top-10 commercial bank.
Headquartered in Charlotte, North Carolina, Truist has leading market share in many of the high-growth markets in the U.S. and offers a wide range of products and services through wholesale and consumer businesses, including consumer and small business banking, commercial and corporate banking, investment banking and capital markets, wealth management, payments, and specialized lending businesses.
Truist Bank, Truist’s largest subsidiary, was chartered in 1872 and is the oldest bank headquartered in North Carolina. Truist Bank provides a wide range of banking and trust services for clients through 2,001 offices as of December 31, 2023 and its digital platform.
Truist Bank, the largest subsidiary of Truist Financial Corporation, was chartered in 1872 and is the oldest bank headquartered in North Carolina. Truist Bank is one of the 10 largest commercial banks in the U.S. and provides banking and trust services for clients through 1,928 offices as of December 31, 2024 and its digital platform.
Financial institutions must also impose daily limits on overdraft charges, review and modify check-clearing procedures, prominently distinguish account balances from available overdraft coverage amounts, and ensure board and management oversight regarding overdraft payment programs.
Financial institutions must also impose daily limits on overdraft charges, review and modify check-clearing procedures, prominently distinguish account balances from available overdraft coverage amounts, and provide for board and management oversight regarding overdraft payment programs. In response to direct client feedback, Truist offers checking accounts that are not subject to overdraft fees.
Truist provides compensation and rewards that aim to achieve positive business results, are based on market and internal assessment, and are aligned with risk management principles. Truist conducts annual studies, factoring teammates’ roles, levels of experience, and geography.
Truist provides market competitive total rewards to attract and retain talent while enabling Truist’s short- and long-term performance. Truist provides compensation and rewards that aim to achieve positive business results, are based on market and internal assessments, and are aligned with risk management principles. Truist conducts an annual pay equity study, factoring teammates’ roles, levels of experience, and geography.
The CRA record of each subsidiary bank of a FHC also is assessed by the FRB in connection with the review of any proposed acquisition or merger application. For its most recent CRA examination period, Truist received the highest possible overall rating of “Outstanding” from the FDIC.
The CRA record of each subsidiary bank of a FHC also is assessed by the FRB in connection with the review of any proposed acquisition or merger application.
Truist Bank is registered with the CFTC as a swap dealer and conditionally registered with the SEC as a security-based swap dealer, subjecting Truist Bank to requirements under the CFTC’s and SEC’s regulatory regime, including trade reporting and recordkeeping requirements, business conduct requirements (including daily valuations, disclosure of material risks associated with swaps and disclosure of material incentives and conflicts of interest), and mandatory clearing and exchange trading requirements for certain standardized swaps designated by the CFTC.
This includes trade reporting and recordkeeping requirements, business conduct requirements (including daily valuations, disclosure of material risks associated with swaps and disclosure of material incentives and conflicts of interest), and mandatory clearing and exchange trading requirements for certain standardized swaps designated by the CFTC. The NFA is the primary self-regulatory organization for Truist’s swap dealer.
The NFA is the primary self-regulatory organization for Truist’s swap dealer. Truist Bank’s uncleared swaps and security-based swaps are subject to variation margin and initial margin requirements, which have been fully phased-in across the industry as of September 2022. Broker-Dealer and Investment Adviser Regulation Truist’s broker-dealer and investment adviser subsidiaries are subject to regulation by the SEC.
Truist Bank’s uncleared swaps and security-based swaps are subject to variation margin and initial margin requirements. Truist Financial Corporation 15 Broker-Dealer and Investment Adviser Regulation Truist’s broker-dealer and investment adviser subsidiaries are subject to regulation by the SEC. FINRA is the primary self-regulatory organization for Truist’s registered broker-dealer subsidiaries.
Other Regulatory Matters Truist is subject to examinations by federal and state banking regulators, as well as the SEC, CFTC, FINRA, NFA, various taxing authorities, and various state insurance and securities regulators.
Other Regulatory Matters Truist is subject to examinations by federal and state banking regulators, as well as the SEC, CFTC, FINRA, NFA, various taxing authorities, and various state securities regulators. Truist periodically receives requests for information on business and accounting practices from regulatory authorities in various states, including state attorneys general, securities regulators, and other regulatory authorities.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeTechnology Risks • The Company and its suppliers face a wide array of cybersecurity risks, including risks of insider threats and third-party cybersecurity incidents, which could result in the loss of operational capabilities or the disclosure of confidential, proprietary, personal, and other sensitive information, which could have an adverse impact on the Company’s operations, financial condition, and prospects, as well as cause significant reputational damage and legal and financial exposure. • The Company’s operating systems and infrastructure, as well as operational capabilities managed or supplied by third parties on whom we rely, could fail or be interrupted, compromised, or breached, which could disrupt the Company’s business and adversely impact the Company’s operations, financial condition, and prospects, as well as cause significant reputational damage and legal and financial exposure. • Truist is heavily reliant on technology, and a failure to effectively anticipate, develop, and implement new technology could harm us. • The Company faces risks associated with the quality, availability, and retention of key data for operational, strategic, regulatory, and compliance purposes.
Biggest changeTechnology Risks • The Company’s operating systems and infrastructure, as well as operational capabilities managed or supplied by third parties on whom we rely, could fail or be interrupted, which could disrupt the Company’s business and adversely impact the Company’s operations, financial condition, prospects, and reputation, and cause significant legal and financial exposure. • Truist is heavily reliant on technology, and a failure to effectively anticipate, develop, and implement new technology could negatively impact our financial results, business, operations, or security. • The Company faces risks associated with the quality, availability, and retention of key data for operational, strategic, regulatory, and compliance purposes. • The Company and its suppliers and service providers face a wide array of cybersecurity risks, which could result in the loss, alteration, or disclosure of confidential, proprietary, personal, and other sensitive information; adversely impact the Company’s operations, financial condition, prospects, and reputation; and cause significant legal and financial exposure.
GSEs could limit their purchases of conforming loans due to capital constraints or other changes in their criteria for conforming loans (e.g., maximum loan amount or borrower eligibility). This potential reduction in purchases could limit the Company’s ability to fund new loans.
The GSEs could limit their purchases of conforming loans due to capital constraints or other changes in their eligibility criteria for conforming loans (e.g., maximum loan amount or borrower eligibility). This potential reduction in purchases could limit the Company’s ability to fund new loans.
A successful penetration or circumvention of system or network security could cause serious negative consequences, including loss of clients and business opportunities; costs associated with maintaining business relationships after a cyberattack or security breach; significant disruption to the Company’s operations and business; misappropriation, exposure or destruction of the Company’s confidential, proprietary, and other sensitive information, including personal information, and funds and those of the Company’s clients; damage to the Company’s or the Company’s clients’ or third parties’ computers, systems, or networks; or a violation of applicable laws and regulations, including those related to data privacy, data protection, and cybersecurity.
A successful penetration or circumvention of system or network security could cause serious negative consequences, including loss of clients and business opportunities; costs associated with maintaining business relationships after a cyberattack or security breach; significant disruption to the Company’s operations and business; misappropriation, exposure or destruction of the Company’s confidential, proprietary, and other sensitive information, including personal information, and funds and those of the Company’s clients; damage to the Company’s or the Company’s clients’ or third parties’ computers, systems, or networks; and a violation of applicable laws and regulations, including those related to data privacy, data protection, and cybersecurity.
Additional risks could arise from the failure of the Company or third parties to provide adequate disclosure or transparency to the Company’s clients about the personal information collected from them and the use of such information; to receive, document, and honor the privacy preferences expressed by the Company’s clients; to protect personal information from unauthorized disclosure; or to maintain proper training on data privacy, data protection, or cybersecurity practices for all teammates or third parties who have access to personal information.
Additional risks could arise from the failure of the Company or third parties to provide adequate disclosure or transparency to the Company’s clients about the personal information collected from them and the use of such information; to receive, document, and honor the privacy preferences expressed by the Company’s clients; to protect personal information from unauthorized disclosure; or to maintain training on data privacy, data protection, or cybersecurity practices for all teammates or third parties who have access to personal information.
The Company is not insured against all types of losses as a result of third-party failures, and the insurance coverage that does exist may be inadequate to protect the Company from all losses resulting from system failures or other disruptions. Failures in the Company’s business infrastructure could interrupt its operations or increase the costs of doing business.
The Company is not insured against all types of losses as a result of third-party-related failures, and the insurance coverage that does exist may be inadequate to protect the Company from all losses resulting from system failures or other disruptions. Failures in the Company’s business infrastructure could interrupt its operations or increase the costs of doing business.
Additionally, the Company faces potential reputational risks as a result of its practices related to climate change, including as a result of the Company’s direct or indirect involvement in certain industries, as well as any decisions management makes in response to managing climate risk, especially as views on climate-related matters become subject to increased polarization.
Additionally, the Company faces potential reputational risks as a result of its practices related to climate change, including as a result of the Company’s direct or indirect involvement, or lack of involvement, in certain industries, as well as any decisions management makes in response to managing climate risk, especially as views on climate-related matters become subject to increased polarization.
The Company’s continued success depends, in part, upon the Company’s ability to address clients’ needs by using technology to provide products and services that satisfy client demands, including demands for faster and more secure payment services, to create efficiencies in the Company’s operations and to integrate those offerings with legacy platforms or to update those legacy platforms.
The Company’s continued success depends, in part, upon the Company’s ability to address clients’ needs by using technology to provide products and services that satisfy client demands, including demands for faster, simpler, and more secure payment services, to create efficiencies in the Company’s operations, and to integrate those offerings with legacy platforms or to update those legacy platforms.
In addition to repurchase claims from GSEs, Truist could be subject to indemnification claims from non-GSE purchasers of the Company’s mortgage loans. Claims could be made if the loans sold fail to conform to statements about their quality, the manner in which the loans were originated and underwritten or their compliance with state and federal law.
In addition to repurchase claims from GSEs, Truist could be subject to indemnification claims from non-GSE purchasers of the Company’s loans. Claims could be made if the loans sold fail to conform to statements about their quality, the manner in which the loans were originated and underwritten, or their compliance with state and federal law.
This would increase the Parent Company’s reliance on capital markets at a time when spreads and funding costs are likely elevated due to the stress impacting the Bank and would also impair the Parent Company’s ability to serve as a source of strength to its subsidiaries.
This would increase the Parent Company’s reliance on capital markets at a time when credit spreads and funding costs are likely elevated due to the stress impacting the Bank and would also impair the Parent Company’s ability to serve as a source of strength to its subsidiaries.
Additional risks that are not presently known or risks deemed immaterial may have an adverse effect on Truist’s financial condition, results of operations, business, and prospects. Market Risks The levels of or changes in interest rates could affect our results of operations and financial condition.
Additional risks that are not presently known or risks deemed immaterial may have an adverse effect on Truist’s financial condition, results of operations, business, and prospects. Market Risks The levels of or changes in interest rates could adversely affect our results of operations and financial condition.
These changes are designed to allow the Company to better serve the Company’s clients and to reduce costs. Many of these initiatives take a significant amount of time to develop and implement, are tied to critical systems, and require substantial financial, human, and other resources.
Although changes are designed to allow the Company to better serve the Company’s clients and to reduce costs, many of these initiatives take a significant amount of time to develop and implement, are tied to critical systems, and require substantial financial, human, and other resources.
Truist is also subject to heightened requirements under the enhanced prudential standards and expects increased supervisory scrutiny, including, for example, single counterparty credit limits, heightened expectations with respect to governance, risk management and internal controls and additional capital and liquidity requirements.
Truist is also subject to heightened requirements under the enhanced prudential standards and increased supervisory scrutiny, including, for example, single counterparty credit limits, heightened expectations with respect to governance, risk management and internal controls, and additional capital and liquidity requirements.
Any third-party technology failure, cyberattack, other information or security breach, termination, or constraint could, among other things, adversely affect the Company’s ability to conduct transactions, service the Company’s clients, manage the Company’s exposure to risk or expand the Company’s business.
Any third-party technology failure, other information or security breach, termination, or constraint could, among other things, adversely affect the Company’s ability to conduct transactions, service the Company’s clients, manage the Company’s exposure to risk, or expand the Company’s business.
In addition, the existence of cyberattacks or security breaches at third-party vendors and service providers with access to the Company’s data may not be disclosed to the Company in a timely manner.
In addition, the existence of cyberattacks or security breaches at third-party vendors and service providers with access to the Company’s data and systems may not be disclosed to the Company in a timely manner.
Truist may be impacted by actual or perceived soundness of other financial institutions, including as a result of the financial or operational failure of a major financial institution, or concerns about the creditworthiness of such a financial institution or its ability to fulfill its obligations, which can cause substantial and cascading disruption within the financial markets and increased expenses, including FDIC insurance premiums, and could affect our ability to attract and retain depositors and to borrow or raise capital.
Truist may be impacted by actual or perceived soundness of other financial institutions, including as a result of the financial or operational failure of a major financial institution, or concerns about the creditworthiness of such a financial institution or its ability to fulfill its obligations, which can cause substantial and cascading disruption within the financial markets and increased expenses, including FDIC insurance premiums or special assessments, and could affect our ability to attract and retain depositors and to borrow or raise capital.
The levels of or changes in interest rates could adversely affect us beyond our net interest income, including by increasing the cost or decreasing the availability of deposits or other variable-rate funding instruments, reducing the return on or demand for loans or increasing the prepayment speed of loans, increasing client or counterparty delinquencies or defaults and reducing the value of our loans, retained interests in securitizations, and fixed-income securities in our investment portfolio and the efficacy of our hedging strategies.
The levels of or changes in interest rates could adversely affect us beyond our net interest income, including by increasing the cost or decreasing the availability of deposits or other variable-rate funding instruments, reducing the yield on or demand for loans or increasing the prepayment speed of loans, increasing client or counterparty delinquencies or defaults, and reducing the value of our loans, retained interests in securitizations, and fixed-income securities in our investment portfolio and the efficacy of our hedging strategies.
Changes in law or regulation in jurisdictions in which our operations are located that affect employees may also adversely affect our ability to hire, develop, and retain qualified teammates in those jurisdictions.
Changes in law or regulation in jurisdictions in which our operations are located that affect teammates may also adversely affect our ability to hire, develop, and retain qualified teammates in those jurisdictions.
Credit ratings may also be influenced by other factors, some of which are outside the Company’s control, such as recent and anticipated economic trends, geopolitical risk, legislative and regulatory developments, including implied levels of government support during a crisis, environmental, social, and governance considerations, and litigation, as well as changes to the rating agencies’ methodologies, among others.
Credit ratings may also be influenced by other factors, some of which are outside the Company’s control, such as recent and anticipated economic trends, geopolitical risk, legislative and regulatory developments, including implied levels of government support during a crisis, environmental, social, and governance considerations, and litigation, as well as changes to the rating agencies’ methodologies.
In determining whether to approve a proposed bank or BHC acquisition, bank regulators will consider, among other factors, the effect of the acquisition on competition; financial condition and future prospects, including current and projected capital ratios and levels; the competence, experience and integrity of management; the supervisory relationship; record of compliance with laws and regulations; the convenience and needs of the communities to be served, including the acquiring institution’s record of compliance under the CRA; the effectiveness of the acquiring institution in combating money laundering activities; and public comments from various stakeholders.
In determining whether to approve a proposed bank or BHC acquisition, bank regulators will consider, among other factors, the effect of the acquisition on competition; financial condition and future prospects, including current and projected capital ratios and levels; the competence, experience, and integrity of management; the supervisory relationship; record of compliance with laws and regulations; the convenience and needs of the communities to be served, including the acquiring institution’s record of compliance under the CRA; the effectiveness of the acquiring institution in combating money laundering activities; and public comments.
Regulatory and Legal Risks • The Company may incur damages, fines, penalties, and other negative consequences from past, current, or future regulatory or other legal violations, including inadvertent or unintentional violations. • Pending or threatened legal proceedings and other matters may adversely affect the Company’s business, financial condition, results of operations, and reputation.
Regulatory and Legal Risks • The Company may incur damages, fines, penalties, and other negative consequences from past, current, or future supervisory actions and regulatory or other legal violations, including inadvertent or unintentional violations. • Pending or threatened legal proceedings and other matters may adversely affect the Company’s business, financial condition, results of operations, and reputation.
Climate change presents (i) physical risks from the direct impacts of changing climate patterns and acute weather events, such as damage to physical assets and service disruptions, and (ii) transition risks from changes in regulations, disruptive technologies, and shifting market dynamics towards a lower carbon economy.
Climate change presents physical risks from the direct impacts of changing climate patterns and acute weather events, such as damage to physical assets and service disruptions, and transition risks from changes in regulations, disruptive technologies, and shifting market dynamics towards a lower carbon economy.
In addition, the Company’s business could be adversely impacted by a significant operational breakdown or failure, theft, fraud or other unlawful conduct, or other negative outcomes caused by human error or misconduct by a teammate of Truist or an employee of another party on which Truist’s operations depend.
In addition, the Company’s business could be adversely impacted by a significant operational breakdown or failure, theft, fraud, or other unlawful conduct, or other negative outcomes caused by human error or misconduct by a teammate of Truist or a teammate of another party on which Truist’s operations depend.
See additional disclosures in the “Regulatory Considerations” section in Item 1 “Business.” Truist Financial Corporation 31 Regulatory capital and liquidity standards and future revisions to them may negatively impact our business and financial results. Truist is subject to regulatory capital and liquidity requirements established by the FRB and the FDIC.
See additional disclosures in the “Regulatory Considerations” section in Item 1 “Business.” Regulatory capital and liquidity standards and future revisions to them may negatively impact our business and financial results. Truist is subject to regulatory capital and liquidity requirements established by the FRB and the FDIC.
Our execution of strategic initiatives may be impacted by internal factors, such as maintaining a level of earnings appropriate to support growth objectives, the ability to maintain dividends in various economic cycles, or the successful delivery of innovative and technology strategies.
Our execution of strategic initiatives may be impacted by internal factors, such as maintaining a level of earnings appropriate to support growth objectives, the ability to maintain dividends in various economic cycles, or the successful delivery of innovation and technology strategies.
We may need to incur substantial expenses to address issues with a service provider, and if the issues cannot be acceptably resolved, we may not be able to timely or effectively replace the service provider due to contractual restrictions, the unavailability of acceptable alternative providers, or other reasons.
We may need to incur substantial expenses to address risks or issues with a service provider, and if such risks or issues cannot be acceptably resolved, we may not be able to timely or effectively replace the service provider due to contractual restrictions, the unavailability of acceptable alternative providers, or other reasons.
These laws and regulations are designed to protect the financial system, consumers and financial institutions from bad actors and illicit activities by requiring financial institutions to develop and implement BSA/AML programs designed to deter and when possible detect and prevent the use of the financial system to facilitate the funding of criminal activities.
These laws and regulations are designed to protect the financial system, consumers, and financial institutions from bad actors and illicit activities by requiring financial institutions to develop and implement programs designed to deter and when possible detect and prevent the use of the financial system to facilitate the funding of criminal activities.
The Company may be subject to increased repurchase obligations as a result of claims made that the Company did not satisfy its obligations as a servicer. The Company may also experience increased loss severity on repurchases, which may require a material increase to the Company’s repurchase reserve.
The Company may be subject to increased repurchase or indemnity obligations as a result of claims made that the Company did not satisfy its obligations as a servicer. The Company may also experience increased loss severity on repurchases, which may require a material increase to the Company’s repurchase reserve.
The regulatory and supervisory framework applicable to banking organizations is intended primarily for the protection of depositors and other clients, the DIF, the broader economy, and the stability of the U.S. financial system, rather than for the protection of shareholders and non-deposit creditors.
The regulatory and supervisory framework applicable to banking organizations is intended primarily for the protection of depositors and other customers, the DIF, the broader economy, and the stability of the U.S. financial system, rather than for the protection of shareholders and non-deposit creditors.
In addition, cybersecurity risks have significantly increased in recent years in part due to the increased sophistication and activities of organized crime affiliates, terrorist organizations, hostile foreign governments, state-sponsored actors, disgruntled teammates or vendors, hackers, activists and other external parties, including those involved in corporate espionage, any of which may see their effectiveness enhanced by the use of artificial intelligence, including the use of generative artificial intelligence to conduct more sophisticated social engineering attacks on the Company or clients.
In addition, cybersecurity risks have significantly increased in recent years in part due to the increased sophistication and activities of organized crime affiliates, terrorist organizations, hostile foreign governments, state-sponsored actors, disgruntled teammates or vendors, hackers, activists, and other external parties, including those involved in corporate espionage, any of which may see their effectiveness enhanced by the use of AI, including the use of generative AI to conduct more sophisticated social engineering attacks on the Company or its clients.
The Company may have more credit risk and higher credit losses if our underwriting standards and practices are inadequate, we adopt more liberal underwriting standards for competitive or other reasons, or our concentration and other risk limits are not well calibrated.
The Company could have more credit risk and higher credit losses if our underwriting standards and practices are inadequate, we adopt more liberal underwriting standards for competitive or other reasons, or our concentration and other risk limits are not well calibrated.
In some cases, the Company could be required to apply a new or revised standard retroactively, resulting in the restatement of prior period financial statements. Depressed market values for the Company’s stock and adverse economic conditions sustained over a period of time may require the Company to write down all or some portion of the Company’s goodwill.
In some cases, the Company could be required to apply a new or revised standard retroactively, resulting in the restatement of prior period financial statements. 38 Truist Financial Corporation Depressed market values for the Company’s stock and adverse economic conditions sustained over a period of time may require the Company to write down all or some portion of the Company’s goodwill.
Further, from time to time, the FASB and SEC change the financial accounting and reporting standards that govern the preparation of the Company’s financial statements. In addition, accounting standard setters and those who interpret the accounting standards may change or even reverse their previous interpretations or positions on how these standards should be applied.
Further, from time to time, the FASB and SEC adopt new accounting standards or change existing financial accounting and reporting standards that govern the preparation of the Company’s financial statements. In addition, accounting standard setters and those who interpret the accounting standards may change or even reverse their previous interpretations or positions on how these standards should be applied.
The following discussion sets forth some of the more important risk factors that could materially affect Truist’s financial condition and operations. When a risk factor spans several risk categories, the risks have been listed by their primary risk category. The risks described are not all inclusive.
Truist Financial Corporation 21 Risk Factors The following discussion sets forth some of the more important risk factors that could materially affect Truist’s financial condition and operations. When a risk factor spans several risk categories, the risks have been listed by their primary risk category. The risks described are not all inclusive.
The adoption of new technologies by competitors, including internet banking services, mobile applications, advanced ATM functionality, artificial intelligence, and cryptocurrencies, could require the Company to make substantial investments to modify or adapt the Company’s existing products and services or even radically alter the way Truist conducts business.
The adoption of new technologies by competitors, including internet banking services, mobile applications, advanced ATM functionality, AI, and cryptocurrencies, could require the Company to make substantial investments to modify or adapt the Company’s existing products and services or even radically alter the way Truist conducts business.
FRB policies can: • meaningfully influence the availability and demand for loans and deposits, the rates and other terms for loans and deposits, and the conditions in equity, fixed-income, currency, and other markets; • significantly impact the cost of funds, as well as the return on assets, both of which can have an impact on interest income; • adversely affect the value of financial assets and liabilities; • adversely affect borrowers through higher debt servicing costs and potentially increase the risk that they may fail to repay their loan obligations; and • artificially inflate asset values during prolonged periods of accommodative policy, which could in turn cause volatile markets and rapidly declining collateral values during times of restrictive monetary and fiscal policies.
These policies can: • Meaningfully influence the availability and demand for loans and deposits, the rates and other terms for loans and deposits, and the conditions in equity, fixed-income, currency, and other markets; • Significantly impact the cost of funds, as well as the return on assets, both of which can have an impact on interest income; • Adversely affect borrowers through higher debt servicing costs and potentially increase the risk they may fail to repay their loan obligations; and • Artificially inflate asset values during prolonged periods of accommodative policy, which could in turn cause volatile markets and rapidly declining collateral values during times of restrictive monetary and fiscal policies.
These and other capital investments in the Company’s business may not produce expected growth in earnings anticipated at the time of the expenditure. Acquisitions, mergers, and divestitures introduce a broad range of anticipated and unanticipated risks, including unforeseen or negative consequences from supervisory or regulatory action that may limit Truist’s ability to pursue and complete them.
These and other capital investments in the Company’s business may not produce expected growth in earnings anticipated at the time of the expenditure. Truist Financial Corporation 35 Acquisitions, mergers, and divestitures introduce a broad range of anticipated and unanticipated risks, including unforeseen or negative consequences from supervisory or regulatory action that may limit Truist’s ability to pursue and complete them.
Truist could become subject to future legislation and regulatory requirements beyond those currently proposed, adopted, or contemplated in the U.S. or abroad, including policies and rulemaking related to the Dodd-Frank Act, limits on acquisitions, more stringent capital and liquidity requirements, policies and rulemaking related to emerging technologies, cybersecurity and data, and climate risk management and ESG governance and reporting, including emissions and sustainability disclosure.
Truist could become subject to future legislation and regulatory requirements beyond those currently proposed, adopted, or contemplated in the U.S. or abroad, including limits on acquisitions, more stringent capital and liquidity requirements, policies and rulemaking related to emerging technologies, cybersecurity, and data, and climate risk management, governance, and reporting, including emissions and sustainability disclosure.
Such regulatory changes may reduce Truist’s revenues, limit the types of financial services and products it may offer, alter the investments it makes, affect the manner in which it operates its businesses, increase its litigation and regulatory costs and increase the ability of non-banks to offer competing financial services and products.
Such regulatory changes may reduce Truist’s revenues, limit the types of financial services and products it may offer, alter the investments it makes, affect the manner in which it operates its businesses, increase its litigation and regulatory costs, and increase the ability of nonbanks to offer competing financial services and products.
Any of these could damage Truist’s reputation and otherwise adversely affect its businesses. Truist Financial Corporation 33 In recent years, well-publicized incidents involving the inappropriate disclosure, collection, use, sharing, storage, and other processing of personal information have led to expanded governmental scrutiny of practices relating to the safeguarding of personal information by companies.
Any of these could damage Truist’s reputation and otherwise adversely affect its businesses. In recent years, well-publicized incidents involving the inappropriate disclosure, collection, use, sharing, storage, and other processing of personal information have led to expanded governmental scrutiny of practices relating to the safeguarding of personal information by companies.
In addition, the policies and procedures are intended to ensure that the process for changing methodologies occurs in an appropriate manner. Due to the uncertainty surrounding the Company’s judgments and the estimates pertaining to these matters, the Company cannot guarantee that adjustments to accounting policies or restatement of prior period financial statements will not be required.
In addition, the policies and procedures are intended to establish a process for changing methodologies in an appropriate manner. Due to the uncertainty surrounding the Company’s judgments and the estimates pertaining to these matters, the Company cannot guarantee that adjustments to accounting policies or restatement of prior period financial statements will not be required.
The cost of resolving the recent bank failures has also prompted the FDIC to issue a special assessment to recover costs to the DIF. Refer to the “Regulatory Considerations” section in Item 1 “Business” for additional details related to the FDIC’s special assessment.
The cost of resolving the bank failures in 2023 also prompted the FDIC to issue a special assessment to recover costs to the DIF. Refer to the “Regulatory Considerations” section in Item 1 “Business” for additional details related to the FDIC’s special assessment.
Truist must comply with laws and regulations relating to anti-money laundering, economic sanctions, embargo programs and anti-corruption, which can increase its risks of non-compliance and costs associated with the implementation and maintenance of complex compliance programs.
Truist must comply with laws and regulations relating to AML, economic sanctions, embargo programs, and anti-corruption, which can increase its risks of non-compliance and costs associated with the implementation and maintenance of complex compliance programs.
Certain investment securities, notably MBS, are very sensitive to changes in rates. Generally, when rates rise, market values will decline, prepayments will decrease and the duration of MBS will increase. Conversely, when rates fall, market values will rise, prepayments of principal and interest will increase and the duration of MBS will decrease.
Certain of our investment securities, notably MBS, are sensitive to changes in rates. Generally, when rates rise, market values will decline, prepayments of principal will decrease and the duration of MBS will increase. Conversely, when rates fall, market values will rise, prepayments of principal will increase and the duration of MBS will decrease.
In addition, the Company may be required to indemnify the securitization trustee against losses from any failure by the Company, as a servicer, to perform the Company’s servicing obligations or any act or omission on the Company’s part that involves willful misfeasance, bad faith, or gross negligence.
In addition, the Company may be required to indemnify the securitization trustee or other holder of the loan against losses from any failure by the Company, as a servicer, to perform the Company’s servicing obligations or any act or omission on the Company’s part that involves willful misfeasance, bad faith, or gross negligence.
Truist’s operations could also be impaired if the measures taken by it or by governmental authorities to help ensure the health and safety of its teammates are ineffective, or if any external party on which Truist relies fails to take appropriate and effective actions to protect the health and safety of its employees.
Truist’s operations could also be impaired if the measures taken by it or by governmental authorities to support the health and safety of its teammates are ineffective, or if any external party on which Truist relies fails to take appropriate and effective actions to protect the health and safety of its teammates.
Governments are intensely focused on the effects of climate change and environmental issues, and how they act to mitigate related risks could have an adverse effect on our business and financial results.
Governments have been focused on the effects of climate change and environmental issues, and how they act to mitigate related risks could have an adverse effect on our business and financial results.
The macroeconomic environment in the United States is susceptible to global events and volatility in financial markets. For example, trade negotiations between the U.S. and other nations remain uncertain and could adversely impact economic and market conditions for the Company and its clients and counterparties.
The macroeconomic environment in the U.S. is susceptible to geopolitical events and volatility in financial markets. For example, trade and other negotiations between the U.S. and other nations remain uncertain and could adversely impact economic and market conditions for the Company and its clients and counterparties.
Requirements to maintain specified levels of capital and liquidity and regulatory expectations as to the quality of the Company’s capital and liquidity may prevent the Company from taking advantage of opportunities in the best interest of shareholders or force the Company to take actions contrary to their interests.
Truist Financial Corporation 31 Requirements to maintain specified levels of capital and liquidity and regulatory expectations as to the quality of the Company’s capital and liquidity may prevent the Company from taking advantage of opportunities in the best interest of shareholders or force the Company to take actions contrary to their interests.
Truist cannot predict the nature or timing of future changes in monetary policies or the precise effects such changes may have on the Company’s activities and financial results.
Truist cannot control or predict the nature or timing of future changes in monetary, fiscal, or other policies or the precise effects such changes may have on the Company’s activities and financial results.
The Company and other large financial institutions have become subject to increased scrutiny, more intense supervision and regulation, and more supervisory findings and actions, with increased operational costs, as well as impacts on geographic expansion and acquisitions, which we expect to continue.
The Company and other large financial institutions have become subject to increased scrutiny, more intense supervision and regulation, and more supervisory findings and actions, with increased operational and compliance costs, as well as impacts on geographic expansion and acquisitions, which may continue.
A variety of factors could affect the realization of income and expense or the recognition of assets and liabilities in the Company’s financial statements. Truist has established detailed policies and procedures that are intended to ensure these critical accounting estimates and judgments are well controlled and applied consistently.
A variety of factors could affect the realization of income and expense or the recognition of assets and liabilities in the Company’s financial statements. Truist has established policies and procedures that are intended to provide for these critical accounting estimates and judgments to be well controlled and applied consistently.
The U.S. banking agencies have jointly issued comprehensive guidance designed to ensure that incentive compensation policies do not undermine the safety and soundness of banking organizations by encouraging teammates to take imprudent risks.
The U.S. banking agencies have jointly issued comprehensive guidance to support incentive compensation policies and practices that do not undermine the safety and soundness of banking organizations by encouraging teammates to take imprudent risks.
The Company’s credit risk and credit losses can increase if the Company’s loans are concentrated in borrowers engaged in the same or similar activities or in borrowers who as a group may be uniquely or disproportionately affected by economic conditions, market conditions, or climate change.
The Company’s credit risk and credit losses can increase if the Company’s loans are concentrated in borrowers engaged in the same or similar activities or in borrowers who as a group may be uniquely or disproportionately affected by economic conditions or market conditions, including as a result of climate change or natural disasters.
These laws and regulations and Truist’s inability to act in certain instances without receiving prior regulatory approval affect Truist’s lending practices, capital structure, investment practices, dividend policy, ability to repurchase common stock and ability to pursue strategic acquisitions, among other activities.
Laws and regulations that are applicable to us, and Truist’s inability to act in certain instances without receiving prior regulatory approval, affect Truist’s lending practices, capital structure, investment practices, dividend policy, ability to repurchase common stock, and ability to pursue strategic acquisitions, among other activities.
If we or a service provider were alleged or found to be infringing on the intellectual-property rights of another person or entity, we could be liable for significant damages for past infringement, substantial fees for continued use, and deprivation of access for limited or extended periods of time without the practical availability of an alternative.
If we or a service provider were alleged or found to be infringing on the intellectual-property rights of another person or entity, we could be liable for significant damages for past infringement, substantial fees for continued use, and deprivation of access to or use of such intellectual property for limited or extended periods of time without the practical availability of an alternative, or we could enter into a settlement agreement to resolve such claims.
Compliance risks include those associated with anti-money laundering compliance, trading activities, market conduct, and the laws, rules, and regulations related to the offering of products and services across jurisdictional borders.
Compliance risks include those associated with anti-money laundering compliance, trading activities, market conduct, and the laws, rules, and regulations related to the offering of financial products and services.
As a result of increasing consolidation, interdependence, and complexity of financial entities and technology systems and networks, a technology failure, cyberattack or other information or security breach that significantly degrades, deletes, or compromises the systems, networks, or data of one or more financial entities could have an adverse impact on counterparties or other market participants.
In addition, as a result of increasing consolidation, interdependence, and complexity of financial entities and technology systems and networks, a technology failure that significantly degrades, deletes, or compromises the systems, networks, or data of one or more financial entities could have an adverse impact on counterparties or other market participants.
RISK FACTORS Summary of Risk Factors Market Risks • The levels of or changes in interest rates could affect our results of operations and financial condition. • The Company’s hedging strategies may not be successful in mitigating our interest rate, foreign exchange, and market risks, which could adversely affect our financial results. • The political environment and monetary and fiscal policies could adversely affect us. • Inflation could negatively impact our business and financial results. • Financial results, lending, and other business activities could be adversely affected by weak or deteriorating economic conditions. • Geopolitical conditions, military conflicts, acts or threats of terrorism, and related volatility and instability in global economic and market conditions could adversely affect us.
RISK FACTORS Summary of Risk Factors Market Risks • The levels of or changes in interest rates could adversely affect our results of operations and financial condition. • The Company’s hedging strategies may not be successful in mitigating our interest rate, foreign exchange, and market risks, which could adversely affect our financial results. • Changes in monetary, fiscal, and other policies, and changes in the U.S. political environment, could adversely affect us. • Financial results, lending, and other business activities could be adversely affected by weak or deteriorating economic conditions. • Geopolitical conditions, the outbreak or escalation of hostilities, acts or threats of terrorism, and related volatility and instability in global economic and market conditions could adversely affect us.
Net interest income is significantly affected by market rates of interest, which in turn are influenced by monetary and fiscal policies, general economic and market conditions, including high or increasing levels of inflation, the political and regulatory environments, business and consumer sentiment, competitive pressures, and expectations about the future, including future changes in interest rates.
Net interest income is significantly affected by market rates of interest, which in turn are influenced by monetary and fiscal policies, general economic and market conditions, including heightened levels of inflation, the political and regulatory environments, business and consumer sentiment, competitive pressures, and expectations about the future, including future changes in interest rates and the frequency and timing of such changes.
Any future enforcement action could have an adverse impact. In addition, governmental authorities have, at times, sought criminal penalties against companies in the financial services sector for violations, and, at times, have required an admission of wrongdoing, criminal pleas or other extraordinary terms from financial institutions in connection with resolving such matters.
In addition, governmental authorities have, at times, sought criminal penalties against companies in the financial services sector for violations, and, at times, have required an admission of wrongdoing, criminal pleas or other extraordinary terms from financial institutions in connection with resolving such matters.
Such incidents may expose security vulnerabilities in the Company’s systems, networks, or other security measures, or those of third parties, that could result in the unauthorized access, gathering, monitoring, misuse, release, loss, or destruction of confidential, proprietary, or other sensitive information, including personal information.
Such incidents have exposed and may continue to expose security vulnerabilities in the Company’s systems, networks, or other security measures, or those of third parties, and have resulted and could result in the unauthorized access, gathering, monitoring, misuse, release, loss, or destruction of confidential, proprietary, or other sensitive information, including personal information.
This enforcement authority includes, among other things, the ability to assess significant civil or criminal monetary penalties, fines, or restitution; to issue cease and desist or removal orders; and to initiate injunctive actions against banking organizations and institution-affiliated parties. These enforcement actions may be initiated for violations of laws and regulations and unsafe or unsound practices.
This enforcement authority includes, among other things, the ability to: assess significant civil or criminal monetary penalties, fines, or restitution; issue cease and desist or prohibition orders; and initiate injunctive actions against financial institutions and institution-affiliated parties, including individual teammates. These enforcement actions may be initiated for violations of laws and regulations or unsafe and unsound practices.
Negative public opinion could result from the Company’s actual or alleged conduct in any number of activities, including lending, sales and other operating practices, corporate governance, acquisitions, a breach of client or teammate information, the failure of any product or service sold to meet clients’ expectations or applicable regulatory requirements.
Negative public opinion could result from the Company’s actual or alleged conduct in any number of activities, including lending, sales, training, quality assurance, client complaint resolution, and other operating practices, incentive compensation design and governance, corporate governance, acquisitions, a data breach of client or teammate information, or the failure of any product or service sold to meet clients’ expectations or applicable regulatory requirements.
The occurrence of natural disasters, extreme weather events, health crises, the occurrence or worsening of disease outbreaks or pandemics, such as COVID-19, or other catastrophic events, as well as government actions or other restrictions in connection with such events, could adversely affect the Company’s financial condition or results of operations.
The occurrence of, or increased severity and frequency of, natural disasters, extreme weather events, health crises, disease outbreaks or pandemics, or other catastrophic events, as well as government actions or other restrictions in connection with such events, could adversely affect the Company’s financial condition or results of operations.
We may be adversely affected by policies, laws, and events that have the effect of flattening or inverting the yield curve (that is, the difference between long-term and short-term interest rates), depressing the interest rates associated with our earning assets to levels near the rates associated with our interest expense, increasing the volatility of market rates of interest, including the rate of change, or changing the spreads among different interest rate indices.
Our net interest income has in the past been adversely affected and could in the future be adversely affected by policies, laws, and events that have the effect of flattening or inverting the yield curve (that is, the difference between long-term and short-term interest rates), depressing the interest rates associated with our earning assets to levels near the rates associated with our interest expense, increasing the volatility of market rates of interest, including the rate of change, or changing the spreads among different interest rate indices.
Although we take steps to mitigate the risks and uncertainties associated with these initiatives, they are not always implemented on time, within budget, or without negative financial, operational, or client impact and do not always perform as we or our clients expect. No assurance can be provided that initiatives in the future will be or will do so.
Although we take steps to mitigate the risks and uncertainties associated with these initiatives, they are not always implemented, and may not in the future be implemented, on time, within budget, or without negative financial, operational, or client impact. In addition, these initiatives do not always perform, and may not in the future perform, as we or our clients expect.
Additional factors affecting the extent to which we may securitize loans and receivables in the future include the overall credit quality of our loans and receivables, the costs of securitizing our loans and receivables, the demand for consumer asset-backed securities and the legal, regulatory, accounting or tax rules affecting securitization transactions and asset-backed securities, generally. 32 Truist Financial Corporation Truist faces risks as a servicer of loans.
Additional factors affecting the extent to which we may securitize loans and receivables in the future include the overall credit quality of our loans and receivables, the costs of securitizing our loans and receivables, the demand for consumer asset-backed securities and the legal, regulatory, accounting or tax rules affecting securitization transactions and asset-backed securities, generally.
The Company also faces indirect technology, cybersecurity and other operational risks relating to clients and other third parties that the Company relies upon to facilitate or enable business activities, including, financial counterparties, regulators, vendors, service providers, and providers of critical infrastructure such as internet access and electrical power.
The Company also faces cybersecurity risks relating to partners and other third parties that the Company relies upon to facilitate or enable business activities, including vendors, service providers, and providers of critical infrastructure such as internet access and electrical power.
In addition, to access the Company’s systems, networks, products, and services, the Company’s clients and other third parties may use personal mobile devices or computing devices that are outside of the Company’s control and network environment and can introduce added cybersecurity risks.
In addition, to access the Company’s systems, networks, products, and services, the Company’s clients and other third parties may use personal mobile devices or computing devices that are outside of the Company’s control and network environments.
A failure to maintain or enhance the Company’s competitive position with respect to technology, whether because of a failure to anticipate client expectations, a failure in the performance of technological developments or an untimely roll out of developments, may cause the Company to lose market share or incur additional expense.
A failure to maintain or enhance the Company’s competitive position with respect to technology, whether because of a failure to anticipate client expectations or keep pace with new or enhanced product or service offerings by competitors, a failure in the performance of technological developments, or an untimely roll out of developments, may cause the Company to lose market share or incur additional expense.
Further, there is increased scrutiny of climate change-related policies, goals, and disclosures, which could result in litigation and regulatory investigations and actions. We may incur additional costs and require additional resources as we evolve our strategy, practices, and related disclosures with respect to these matters.
Further, there is increased scrutiny of climate change-related policies, goals, and disclosures, which could result in litigation and regulatory investigations and actions or reputational damage. We may incur additional costs and require additional resources as we evolve our strategy, practices, and related disclosures with respect to these matters. The Company is at risk of increased losses from fraud.
Truist Financial Corporation 27 The Company’s operating systems and infrastructure, as well as operational capabilities managed or supplied by third parties on whom we rely, could fail or be interrupted, compromised, or breached, which could disrupt the Company’s business and adversely impact the Company’s operations, financial condition, and prospects, as well as cause significant reputational damage and legal and financial exposure.
Technology Risks The Company’s operating systems and infrastructure, as well as operational capabilities managed or supplied by third parties on whom we rely, could fail or be interrupted, which could disrupt the Company’s business and adversely impact the Company’s operations, financial condition, prospects, and reputation, and cause significant legal and financial exposure.
The level of and changes in market rates of interest and, as a result, these risks and uncertainties, are beyond our control. The dynamics among these risks and uncertainties are also challenging to assess and manage.
The levels of and changes in market rates of interest, and the related risks and uncertainties, are beyond our control. The dynamics among these risks and uncertainties are also challenging to assess and manage.
Truist and Truist’s clients, regulators, vendors, service providers, and other third parties, including other financial services institutions and companies engaged in data processing, have been subject to and are likely to continue to be the target of cyberattacks and other similar incidents.
In addition, Truist’s clients, regulators, and other third parties, including other financial services institutions and companies engaged in data processing, have been subject to and will continue to be the target of cyberattacks and other similar incidents.
Truist maintains systems and procedures designed to ensure that it complies with applicable laws and regulations, but there can be no assurance that these will be effective.
Truist maintains systems and procedures designed to support its compliance with applicable laws and regulations, but there can be no assurance that these will be effective.
The Company’s operations rely on its ability, and the ability of key external parties, to maintain appropriately staffed workforces and on the competence, trustworthiness, health, and safety of employees.
Truist Financial Corporation 37 The Company’s operations rely on its ability, and the ability of key external parties, to maintain appropriately staffed workforces and on the competence, trustworthiness, health, and safety of teammates.
When loans are sold or securitized, it is customary to make representations and warranties to the purchaser about the loans, including the manner in which they were originated. These agreements generally require the repurchase of loans or indemnification in the event of a breach of these representations or warranties.
When loans are sold or securitized, it is customary to make representations and warranties to the purchaser about the loans, including the manner in which they were originated, and to agree to repurchase the loans or indemnify the buyer in the event of a breach of the sale agreement, including a breach of these representations or warranties.
Reputational Risks Negative public opinion, whether real or perceived, or our failure to successfully manage it could damage the Company’s reputation and adversely impact our business, financial condition, results of operations, and prospects. Truist’s earnings, capital, and stock price are subject to risks associated with negative public opinion.
Reputational Risks • Negative public opinion, whether real or perceived, or our failure to successfully manage it could damage the Company’s reputation and adversely impact our business, financial condition, results of operations, and prospects.
Any cybersecurity breaches, attacks and other similar incidents could significantly harm Truist’s reputation, which could adversely affect the Company’s financial condition and results of operation. Negative public opinion could also result from increased polarization of environmental and social considerations that may affect Truist and clients of Truist.
Any cybersecurity breaches, attacks, and other similar incidents, including the compromise of personal information, could significantly harm Truist’s reputation, which could adversely affect the Company’s financial condition and results of operation. Negative public opinion could also result from heightened and differing stakeholder expectations regarding environmental and social considerations that may affect Truist and clients of Truist.
In addition, the Company may not be able to find market participants that are willing to act as its hedging counterparties on acceptable terms or at all, which could have an adverse effect on the success of ours hedging strategies. The Company’s hedging strategies are not designed to eliminate all interest rate, foreign exchange, and market risks.
In addition, the Company may not be able to find market participants that are willing to act as its hedging counterparties on acceptable terms or at all, which could have an adverse effect on the success of our hedging strategies.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeTruist owns or leases retail branches and other offices in a number of states, primarily concentrated in the Southeastern and Mid-Atlantic United States. See Table 2 for a list of Truist’s branches by state. Truist also operates numerous insurance agencies and other businesses that occupy facilities throughout the U.S. and Canada.
Biggest changeTruist owns or leases retail branches and other offices in a number of states, primarily concentrated in the Southeastern and Mid-Atlantic U.S. See Table 2 for a list of Truist’s branches by state. Truist also operates other businesses that occupy facilities throughout the U.S. and Canada.
Management believes that these premises, in the aggregate, are well-located and suitably equipped to serve as financial services facilities. See “Note 6. Premises and Equipment” for additional disclosures. Truist Financial Corporation 41
Management believes that these premises, in the aggregate, are well-located and suitably equipped to serve as financial services facilities. See “Note 6. Premises and Equipment” for additional disclosures. Truist Financial Corporation 43
ITEM 2. PROPERTIES Truist owns its headquarters building at 214 North Tryon Street, Charlotte, NC, 28202. Truist owns or leases free-standing operations centers, with its primary operations and information technology centers located in various locations in the Southeastern and Mid-Atlantic United States.
ITEM 2. PROPERTIES Truist owns its headquarters building at 214 North Tryon Street, Charlotte, NC, 28202. Truist owns or leases free-standing operations centers, with its primary operations and information technology centers located in various locations in the Southeastern and Mid-Atlantic U.S.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(2) Excludes commissions. 42 Truist Financial Corporation Preferred Stock Redemptions During 2021, the Company redeemed all 18,000 outstanding shares of its perpetual preferred stock series F and the corresponding depositary shares representing fractional interests in such series for $450 million, all 20,000 outstanding shares of its perpetual preferred stock series G and the corresponding depositary shares representing fractional interests in such series for $500 million, and all 18,600 outstanding shares of its perpetual preferred stock series H and the corresponding depositary shares representing fractional interests in such series for $465 million.
Biggest changeAt December 31, 2024, Truist had remaining authorization to repurchase up to $4.0 billion of common stock under the Board approved repurchase plan. 44 Truist Financial Corporation Preferred Stock Redemptions During 2024, the Company redeemed all 7,500 outstanding shares of its perpetual preferred stock series L and the corresponding 750,000 depositary shares representing fractional interests in such series at a redemption price of $1,000 per depositary share (equivalent to $100,000 per share of preferred stock) plus any accrued and unpaid dividends, for $750 million.
The graph and table assume an initial investment of $100 was made on December 31, 2018 in each of the Company’s common stock and the two indexes, as well as reinvestment of all dividends without commissions.
The graph and table assume an initial investment of $100 was made on December 31, 2019 in each of the Company’s common stock and the two indexes, as well as reinvestment of all dividends without commissions.
Management’s target common dividend payout ratio (computed by dividing common stock dividends by net income available to common shareholders) is between 30% and 50% during normal economic conditions. Truist paid $2.8 billion, $2.7 billion, and $2.5 billion in common stock dividends during 2023, 2022, and 2021, respectively.
Management’s target common dividend payout ratio (computed by dividing common stock dividends by net income available to common shareholders) is between 30% and 50% during normal economic conditions. Truist paid $2.8 billion, $2.8 billion, and $2.7 billion in common stock dividends during 2024, 2023, and 2022, respectively.
Truist Financial Corporation 43 Five-Year Common Stock Performance The following graph and table compare the cumulative total shareholder return of the Company’s common stock, the S&P 500 Index, and the KBW Nasdaq Bank Index for the five-year period ended December 31, 2023. The Company is a component of both indexes.
Truist Financial Corporation 45 Five-Year Common Stock Performance The following graph and table compare the cumulative total shareholder return of the Company’s common stock, the S&P 500 Index, and the KBW Nasdaq Bank Index for the five-year period ended December 31, 2024. The Company is a component of both indexes.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Truist’s common stock is traded on the NYSE under the symbol “TFC.” As of December 31, 2023, Truist’s common stock was held by 77,243 registered shareholders.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Truist’s common stock is traded on the NYSE under the symbol “TFC.” As of December 31, 2024, Truist’s common stock was held by 73,681 registered shareholders.
The following table provides additional information on share repurchases as part of publicly announced plans and shares exchanged or surrendered in connection with the exercise of equity-based awards: Table 5: 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) Total Number of Shares Purchased as part of Publicly Announced Plans Approximate Dollar Value of Shares that may yet be Purchased Under the Plans October 1, 2023 to October 31, 2023 11 $ 27.91 — $ — November 1, 2023 to November 30, 2023 — 31.96 — — December 1, 2023 to December 31, 2023 — — — — Total 11 27.93 — (1) Includes shares exchanged or surrendered in connection with the exercise of equity-based awards under equity-based compensation plans.
The following table provides additional information on share repurchases as part of publicly announced plans and shares exchanged or surrendered in connection with the exercise of equity-based awards: Table 5: 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 Plans Approximate Dollar Value of Shares that may yet be Purchased Under the Plans (3)(4) October 1, 2024 to October 31, 2024 11,712 $ 42.69 11,712 $ 4,000 November 1, 2024 to November 30, 2024 — — — 4,000 December 1, 2024 to December 31, 2024 — — — 4,000 Total 11,712 $ 42.69 11,712 (1) Includes shares exchanged or surrendered in connection with the exercise of equity-based awards under equity-based compensation plans.
(2) Plans not approved by security holders consist of 21,821 options outstanding with a weighted average exercise price of $33.57 and 4,628,435 RSUs for plans that were assumed in mergers and acquisitions and issued prior to shareholder approval of the Truist Financial Corporation 2022 Incentive Plan. (3) Excludes RSUs and PSUs because they do not have an exercise price.
(2) Plans not approved by security holders consist of 10,369 options outstanding with a weighted average exercise price of $33.88 and 2,383,079 RSUs for plans that were assumed in mergers and acquisitions and issued prior to shareholder approval of the Truist Financial Corporation 2022 Incentive Plan. (3) Excludes RSUs and PSUs because they do not have an exercise price.
These preferred stock redemptions were in accordance with the terms of the Company’s Articles of Incorporation. See “Note 12. Shareholders’ Equity” for information about preferred stock.
This preferred stock redemption was in accordance with the terms of the Company’s Articles of Incorporation. See “Note 12. Shareholders’ Equity” for information about preferred stock.
Equity Compensation Plan Information The following table provides information about equity-based awards as of December 31, 2023: Table 6: Equity Compensation Plan Information Plan Category (a) (1)(2) Number of securities to be issued upon exercise of outstanding options, warrants and rights (b) (3) Weighted-average exercise price of outstanding options, warrants and rights (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in (a)) Approved by security holders 14,230,638 $ 35.02 34,044,469 Not approved by security holders 4,650,256 33.57 — Total 18,880,894 $ 34.94 34,044,469 (1) Includes 13,818,321 RSUs and PSUs in plans approved by security holders.
Equity Compensation Plan Information The following table provides information about equity-based awards as of December 31, 2024: Table 6: Equity Compensation Plan Information Plan Category (a) (1)(2) Number of securities to be issued upon exercise of outstanding options, warrants and rights (b) (3) Weighted-average exercise price of outstanding options, warrants and rights (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in (a)) Approved by security holders 21,057,484 $ 34.42 23,020,895 Not approved by security holders 2,393,448 33.88 — Total 23,450,932 $ 34.40 23,020,895 (1) Includes 18,157,076 RSUs and PSUs in plans approved by security holders.
In addition to shares purchased under publicly announced repurchase plans, Truist repurchased shares in connection with the exercise of equity-based awards under equity-based compensation plans. Truist did not have any share repurchases for 2023 and repurchased $250 million and $1.6 billion in common stock in 2022 and 2021, respectively, pursuant to publicly announced repurchase plans.
Any repurchase plan may be extended, modified, or discontinued at any time. In addition to shares purchased under publicly announced repurchase plans, Truist repurchases shares in connection with the exercise of equity-based awards under equity-based compensation plans. Truist repurchased $1.0 billion in common stock in 2024 and $250 million in 2022, pursuant to publicly announced repurchase plans.
The timing and exact amount of repurchases are subject to various factors, including the Company’s capital position, liquidity, accounting and regulatory considerations, including any restrictions that may be imposed by the FRB, financial and operational performance, alternative uses of capital, stock trading price and general market conditions, and may be modified, extended, discontinued, or resumed at any time.
The quantity, timing, price, and other terms of any repurchases are subject to various factors, including Truist’s capital and liquidity positions and related internal frameworks, accounting and regulatory considerations (including any restrictions that may be imposed by the FRB and 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.
Table 7: Cumulative Total Shareholder Return Invested Cumulative Total Return As of / Through December 31, 2018 2019 2020 2021 2022 2023 Truist Financial Corporation $ 100.00 $ 134.52 $ 119.55 $ 150.72 $ 115.28 $ 105.45 S&P 500 Index 100.00 131.47 155.65 200.29 163.98 207.04 KBW Nasdaq Bank Index 100.00 136.12 122.09 168.90 132.76 131.58 44 Truist Financial Corporation
Table 7: Cumulative Total Shareholder Return Invested Cumulative Total Return As of / Through December 31, 2019 2020 2021 2022 2023 2024 Truist Financial Corporation $ 100.00 $ 88.87 $ 112.04 $ 85.70 $ 78.39 $ 96.99 S&P 500 Index 100.00 118.39 152.34 124.73 157.48 196.85 KBW Nasdaq Bank Index 100.00 89.69 124.08 97.53 96.66 132.63 46 Truist Financial Corporation
Added
Truist did not repurchase any commons shares under publicly announced repurchase plans in 2023.
Added
(2) Excludes commissions. (3) Excludes excise taxes on share repurchases. (4) In June 2024, Truist announced that the Board had authorized the repurchase of up to $5.0 billion of common stock beginning in the third quarter of 2024 through 2026 as part of Truist’s overall capital distribution strategy.
Added
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.
Added
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 restrictions that may be imposed by the FRB and 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.
Added
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.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

209 edited+112 added−146 removed78 unchanged
Biggest changeTreasury $ 11,021 $ 10,591 $ 7,633 1.20 % 0.88 % 0.73 % $ 132 $ 93 $ 56 $ 39 $ 35 $ 4 $ 37 $ 13 $ 24 GSE 348 498 1,799 2.94 2.24 2.29 10 11 41 (1) 3 (4) (30) (1) (29) Agency MBS 121,313 131,669 128,306 2.32 1.94 1.52 2,821 2,552 1,953 269 478 (209) 599 547 52 States and political subdivisions 424 392 429 4.13 3.88 3.55 18 15 15 3 1 2 — 1 (1) Non-agency MBS 3,816 4,072 1,299 2.34 2.30 2.20 89 94 28 (5) 2 (7) 66 1 65 Other 20 44 31 5.37 3.60 1.90 1 2 1 (1) 1 (2) 1 1 — Total securities 136,942 147,266 139,497 2.24 1.88 1.50 3,071 2,767 2,094 304 520 (216) 673 562 111 Interest earning trading assets 4,739 5,767 5,602 6.64 4.15 2.78 314 239 156 75 124 (49) 83 78 5 Other earning assets (3) 29,765 20,429 19,498 5.24 1.88 0.24 1,561 384 48 1,177 938 239 336 334 2 Loans and leases, net of unearned income: Commercial and industrial 163,983 149,030 137,304 6.34 3.91 3.04 10,389 5,823 4,174 4,566 3,931 635 1,649 1,270 379 CRE 22,741 22,697 25,269 6.71 4.01 2.85 1,535 920 728 615 613 2 192 271 (79) Commercial Construction 6,125 5,326 6,053 7.62 4.46 2.98 459 228 173 231 191 40 55 79 (24) Residential mortgage 56,131 51,721 45,500 3.78 3.60 4.14 2,121 1,860 1,884 261 96 165 (24) (263) 239 Home equity 10,388 10,788 11,136 7.36 5.01 5.69 765 540 506 225 246 (21) 34 27 7 Indirect auto 25,621 27,197 26,621 6.10 5.50 6.12 1,563 1,497 1,629 66 156 (90) (132) (167) 35 Other consumer 28,412 26,320 25,118 7.25 6.23 6.70 2,061 1,640 1,666 421 284 137 (26) (111) 85 Student 2,453 6,114 7,251 6.91 4.97 3.99 170 304 289 (134) 91 (225) 15 65 (50) Credit card 4,876 4,753 4,650 11.59 9.57 8.92 565 455 415 110 98 12 40 31 9 Total loans and leases HFI 320,730 303,946 288,902 6.12 4.36 3.97 19,628 13,267 11,464 6,361 5,706 655 1,803 1,202 601 LHFS 1,605 2,889 4,546 6.37 4.23 2.63 102 122 120 (20) 47 (67) 2 56 (54) Total loans and leases 322,335 306,835 293,448 6.12 4.36 3.95 19,730 13,389 11,584 6,341 5,753 588 1,805 1,258 547 Total earning assets 493,781 480,297 458,045 5.00 3.49 3.03 24,676 16,779 13,882 7,897 7,335 562 2,897 2,232 665 Nonearning assets 59,351 63,533 64,340 Total assets $ 553,132 $ 543,830 $ 522,385 Liabilities and Shareholders’ Equity Interest-bearing deposits: Interest-checking $ 103,465 $ 111,539 $ 107,311 2.04 0.47 0.05 2,112 519 59 1,593 1,634 (41) 460 458 2 Money market and savings 138,841 145,645 134,303 2.04 0.37 0.03 2,834 536 35 2,298 2,324 (26) 501 497 4 Time deposits 36,803 15,514 18,025 3.83 0.58 0.30 1,409 90 54 1,319 1,059 260 36 44 (8) Total interest-bearing deposits 279,109 272,698 259,639 2.28 0.42 0.06 6,355 1,145 148 5,210 5,017 193 997 999 (2) Short-term borrowings 24,478 14,957 6,170 5.25 2.58 0.76 1,286 385 47 901 558 343 338 212 126 Long-term debt 49,678 34,172 37,410 4.46 2.31 1.53 2,215 791 573 1,424 958 466 218 271 (53) Total interest-bearing liabilities 353,265 321,827 303,219 2.79 0.72 0.25 9,856 2,321 768 7,535 6,533 1,002 1,553 1,482 71 Noninterest-bearing deposits 122,018 145,392 138,733 Other liabilities 14,750 12,794 11,300 Shareholders’ equity 63,099 63,817 69,133 Total liabilities and shareholders’ equity $ 553,132 $ 543,830 $ 522,385 Average interest-rate spread 2.21 % 2.77 % 2.78 % NIM/net interest income - taxable equivalent 3.00 % 3.01 % 2.86 % $ 14,820 $ 14,458 $ 13,114 $ 362 $ 802 $ (440) $ 1,344 $ 750 $ 594 Taxable-equivalent adjustment $ 220 $ 142 $ 108 Memo: Total deposits $ 401,127 $ 418,090 $ 398,372 1.58 % 0.27 % 0.04 % $ 6,355 $ 1,145 $ 148 $ 5,210 $ 997 (1) Represents daily average balances.
Biggest changeTreasury $ 12,100 $ 11,021 $ 10,591 4.01 % 1.20 % 0.88 % $ 485 $ 132 $ 93 $ 353 $ 339 $ 14 $ 39 $ 35 $ 4 GSE 390 348 498 3.38 2.94 2.24 13 10 11 3 2 1 (1) 3 (4) Agency MBS 109,652 121,923 132,222 2.70 2.31 1.93 2,958 2,821 2,552 137 441 (304) 269 477 (208) States and political subdivisions 417 424 392 4.14 4.13 3.88 17 18 15 (1) — (1) 3 1 2 Non-agency MBS 1,282 3,816 4,072 2.85 2.34 2.30 37 89 94 (52) 16 (68) (5) 2 (7) Other 17 20 44 5.25 5.37 3.60 1 1 2 — — — (1) 1 (2) Total securities 123,858 137,552 147,819 2.83 2.23 1.87 3,511 3,071 2,767 440 798 (358) 304 519 (215) Interest earning trading assets 5,320 4,739 5,767 6.12 6.64 4.15 326 314 239 12 (26) 38 75 124 (49) Other earning assets (3) 36,622 29,335 19,886 5.48 5.31 1.92 2,008 1,557 381 451 51 400 1,176 927 249 Loans and leases, net of unearned income: Commercial and industrial 155,674 163,983 149,030 6.36 6.34 3.91 9,897 10,389 5,823 (492) 33 (525) 4,566 3,931 635 CRE 21,585 22,741 22,697 6.81 6.71 4.01 1,480 1,535 920 (55) 22 (77) 615 613 2 Commercial Construction 7,729 6,125 5,326 7.67 7.62 4.46 583 459 228 124 3 121 231 191 40 Residential mortgage 54,486 56,131 51,721 3.88 3.78 3.60 2,114 2,121 1,860 (7) 55 (62) 261 96 165 Home equity 9,778 10,388 10,788 7.94 7.36 5.01 776 765 540 11 57 (46) 225 246 (21) Indirect auto 22,326 25,621 27,197 7.00 6.10 5.50 1,563 1,563 1,497 — 215 (215) 66 156 (90) Other consumer 28,748 28,412 26,320 8.18 7.25 6.23 2,351 2,061 1,640 290 265 25 421 284 137 Student — 2,453 6,114 — 6.91 4.97 — 170 304 (170) (85) (85) (134) 91 (225) Credit card 4,907 4,876 4,753 11.96 11.59 9.57 587 565 455 22 18 4 110 98 12 Total loans and leases HFI 305,233 320,730 303,946 6.34 6.12 4.36 19,351 19,628 13,267 (277) 583 (860) 6,361 5,706 655 LHFS 1,305 1,605 2,889 6.31 6.37 4.23 82 102 122 (20) (1) (19) (20) 47 (67) Total loans and leases 306,538 322,335 306,835 6.34 6.12 4.36 19,433 19,730 13,389 (297) 582 (879) 6,341 5,753 588 Total earning assets 472,338 493,961 480,307 5.35 4.99 3.49 25,278 24,672 16,776 606 1,405 (799) 7,896 7,323 573 Nonearning assets 51,185 51,554 56,666 Assets of discontinued operations 2,542 7,617 6,857 Total assets $ 526,065 $ 553,132 $ 543,830 Liabilities and Shareholders’ Equity Interest-bearing deposits: Interest-checking $ 104,606 $ 103,465 $ 111,539 2.68 2.11 0.47 2,802 2,184 519 618 594 24 1,665 1,706 (41) Money market and savings 136,217 138,841 145,645 2.54 2.04 0.37 3,457 2,834 536 623 677 (54) 2,298 2,324 (26) Time deposits 39,406 36,803 15,514 4.04 3.83 0.58 1,590 1,409 90 181 79 102 1,319 1,059 260 Total interest-bearing deposits 280,229 279,109 272,698 2.80 2.30 0.42 7,849 6,427 1,145 1,422 1,350 72 5,282 5,089 193 Short-term borrowings 24,499 24,478 14,957 5.36 5.25 2.58 1,313 1,286 385 27 26 1 901 558 343 Long-term debt 36,713 49,678 34,172 4.94 4.46 2.31 1,813 2,215 791 (402) 220 (622) 1,424 958 466 Total interest-bearing liabilities 341,441 353,265 321,827 3.21 2.81 0.72 10,975 9,928 2,321 1,047 1,596 (549) 7,607 6,605 1,002 Noninterest-bearing deposits 107,639 122,018 145,392 Other liabilities 13,343 11,560 9,994 Liabilities of discontinued operations 1,049 3,190 2,800 Shareholders’ equity 62,593 63,099 63,817 Total liabilities and shareholders’ equity $ 526,065 $ 553,132 $ 543,830 Average interest-rate spread 2.14 % 2.18 % 2.77 % NIM/net interest income - TE 3.03 % 2.98 % 3.01 % $ 14,303 $ 14,744 $ 14,455 $ (441) $ (191) $ (250) $ 289 $ 718 $ (429) Taxable-equivalent adjustment $ 212 $ 220 $ 142 Memo: Total deposits $ 387,868 $ 401,127 $ 418,090 2.02 % 1.60 % 0.27 % $ 7,849 $ 6,427 $ 1,145 $ 1,422 $ 5,282 (1) Represents daily average balances.
Scheduled payments and maturities from portfolios of loans and investment securities also provide a stable source of funds. FHLB advances, other secured borrowings, Federal funds purchased and other short-term borrowed funds, as well as long-term debt issued through the capital markets, all provide supplemental liquidity sources.
Scheduled payments and maturities from portfolios of loans and investment securities also provide a stable source of liquidity. FHLB advances, other secured borrowings, Federal funds purchased and other short-term borrowed funds, as well as long-term debt issued through the capital markets, all provide supplemental liquidity sources.
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); from changing rate relationships among different yield curves affecting bank activities (basis risk); from changing rate relationships across the spectrum of maturities (yield curve risk); and from interest-related options inherently embedded in bank products (options risk).
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 Enterprise Valuation Committee, which provides oversight to Truist’s enterprise-wide IPV function, is responsible for the comparison of pricing information received from the third-party pricing service or internally to other third-party pricing sources, approving tolerance limits determined by IPV for price comparison exceptions, reviewing significant changes to pricing and valuation policies and reviewing and approving the pricing decisions made on any illiquid and hard-to-price securities.
The Enterprise Valuation Committee provides oversight to Truist’s enterprise-wide IPV function, which is responsible for the comparison of pricing information received from the third-party pricing service or internally to other third-party pricing sources, approving tolerance limits determined by IPV for price comparison exceptions, reviewing significant changes to pricing and valuation policies and reviewing and approving the pricing decisions made on any illiquid and hard-to-price securities.
Because an analysis of the primary and secondary sources of repayment is the most important factor, collateral, unless it is liquid, does not justify loans that cannot be serviced by the borrower’s normal cash flows. • Overall creditworthiness of the client, taking into account the client’s relationships, both past and current, with Truist and other lenders - Truist’s success depends on building lasting and mutually beneficial relationships with clients, which involves assessing their financial position and background. • Level of equity invested in the transaction - in general, borrowers are required to contribute or invest a portion of their own funds prior to any loan advances.
Because an analysis of the primary and secondary sources of repayment is the most important factor, collateral, unless it is liquid, does not justify loans that cannot be serviced by the borrower’s primary and secondary cash flows. • Overall creditworthiness of the client, taking into account the client’s relationships, both past and current, with Truist and other lenders - Truist’s success depends on building lasting and mutually beneficial relationships with clients, which involves assessing their financial position and background. • Level of equity invested in the transaction - in general, borrowers are required to contribute or invest a portion of their own funds prior to any loan advances.
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, and payments on and, from time-to-time, potential repurchases or redemptions of a portion of an outstanding tranche of the long-term debt of the Parent Company (as may be permitted by the terms of each respective series).
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 the long-term debt of the Parent Company (as may be permitted by the terms of each respective series), and the redemption of preferred stock.
Management believes that this purpose can best be accomplished by building strong client relationships over time and developing in-depth local market knowledge. The Company employs strict underwriting criteria governing the degree of risk assumed and the diversity of the loan portfolio in terms of type, industry, and geographical concentration.
Management believes that this purpose can best be accomplished by building strong client relationships over time and developing in-depth local market knowledge. The Company employs underwriting criteria governing the degree of risk assumed and the diversity of the loan portfolio in terms of type, industry, and geographical concentration.
Expected losses are estimated through contractual maturity, giving appropriate consideration to expected prepayments unless the borrower has a right to renew that is not cancellable or to capture the losses expected at the balance sheet date or prior to January 1, 2023 it is reasonably expected that the loan will be modified as a TDR.
Expected losses are estimated through contractual maturity, giving appropriate consideration to expected prepayments unless the borrower has a right to renew that is not cancellable or to capture the losses expected at the balance sheet date or prior to January 1, 2023 it was reasonably expected that the loan will be modified as a TDR.
Stress Testing The Company uses a comprehensive 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 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.
The primary objectives of effective 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.
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.
Indirect auto loans are subject to rigorous lending policies and procedures and are underwritten with note amounts and credit limits that are consistent with the Company’s risk philosophy. In addition to its normal underwriting due diligence, Truist uses application systems and scoring systems to help underwrite and manage the credit risk in its indirect auto portfolio.
Indirect auto loans are subject to lending policies and procedures and are underwritten with note amounts and credit limits that are consistent with the Company’s risk philosophy. In addition to its normal underwriting due diligence, Truist uses application systems and scoring systems to help underwrite and manage the credit risk in its indirect auto portfolio.
Risks associated with mortgage lending include interest rate risk, which is mitigated through the sale of a substantial portion of conforming fixed-rate loans in the secondary mortgage market and an effective MSR hedging process. Credit risk is managed through rigorous underwriting procedures and mortgage insurance.
Risks associated with mortgage lending include interest rate risk, which is mitigated through the sale of a substantial portion of conforming fixed-rate loans in the secondary mortgage market and an effective MSR hedging process. Credit risk is managed through underwriting procedures and mortgage insurance.
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 present attractive risk-adjusted returns, while preserving asset value and capital. Truist’s compensation plans are designed to consider teammate’s adherence to and successful implementation of Truist’s risk values and associated policies and procedures.
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 present attractive risk-adjusted returns, while preserving asset value and capital. Truist’s compensation plans are designed to consider teammates’ adherence to and successful implementation of Truist’s risk values and associated policies and procedures.
Truist has established the following general practices to manage credit risk: • limiting the amount of credit that individual lenders may extend to a borrower; • establishing a process for credit approval accountability; • careful initial underwriting and analysis of borrower, transaction, market, and collateral risks; • ongoing servicing and monitoring of individual loans and lending relationships; • maintaining collections and asset resolution teams; 74 Truist Financial Corporation • continuous monitoring of the portfolio, concentration and transactional limits, emerging risks, market dynamics and the economy; and • periodically reevaluating the Company’s strategy and overall exposure as economic, market and other relevant conditions change.
Truist has established the following general practices to manage credit risk: • limiting the amount of credit that individual lenders may extend to a borrower; • establishing a process for credit approval accountability; • careful initial underwriting and analysis of borrower, transaction, market, and collateral risks; • ongoing servicing and monitoring of individual loans and lending relationships; • maintaining collections and asset resolution teams; • continuous monitoring of the portfolio, concentration and transactional limits, emerging risks, market dynamics and the economy; and • periodically reevaluating the Company’s strategy and overall exposure as economic, market and other relevant conditions change.
Truist lends to a diverse client base that is geographically dispersed to mitigate concentration risk arising from local and regional economic downturns. The following discussion provides additional information on the Company’s loan and lease portfolios. Refer to the “Risk Management” section for a discussion of the credit risk management policies used to manage the portfolios.
Truist lends to a diverse client base that is managed to be geographically dispersed to mitigate concentration risk arising from local and regional economic downturns. The following discussion provides additional information on the Company’s loan and lease portfolios. Refer to the “Risk Management” section for a discussion of the credit risk management policies used to manage the portfolios.
Once models have been approved, model owners are responsible for the maintenance of an appropriate operating environment and must monitor and evaluate the performance of the models on a recurring basis. Models are updated in response to changes in portfolio composition, industry and economic conditions, technological capabilities, and other developments.
Once models have been approved by MRO, model owners are responsible for the maintenance of an appropriate operating environment and must monitor and evaluate the performance of the models on a recurring basis. Models are updated in response to changes in portfolio composition, industry and economic conditions, technological capabilities, and other developments.
As illustrated in the following graph, there were no Company-wide VaR backtesting exceptions during the twelve months ended December 31, 2023. 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.
As illustrated in the following graph, there were no Company-wide VaR backtesting exceptions during the twelve months ended December 31, 2024. 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.
This estimate reflects the sensitivity of certain factors considered in calculation of pension expense but does not consider all factors that could increase or decrease estimates calculated. Refer to “Note 15. Benefit Plans” for disclosures related to the benefit plans. 86 Truist Financial Corporation
This estimate reflects the sensitivity of certain factors considered in calculation of pension expense but does not consider all factors that could increase or decrease estimates calculated. Refer to “Note 15. Benefit Plans” for disclosures related to the benefit plans. Truist Financial Corporation 87
Management considers a range of macroeconomic forecast data in connection with the allowance estimation process. Under the range of scenarios considered as of December 31, 2023, use of the Company’s pessimistic scenario would have resulted in an increase to the modeled allowance results of approximately $2.2 billion.
Management considers a range of macroeconomic forecast data in connection with the allowance estimation process. Under the range of scenarios considered as of December 31, 2024, use of the Company’s pessimistic scenario would have resulted in an increase to the modeled allowance results of approximately $2.2 billion.
Merger-related and restructuring accruals are established when the costs are incurred or once all requirements for a plan to dispose of or outsource certain business functions have been approved by management. Merger and restructuring accruals are re-evaluated periodically and adjusted as necessary.
Restructuring accruals are established when the costs are incurred or once all requirements for a plan to dispose of or outsource certain business functions have been approved by management. Restructuring accruals are re-evaluated periodically and adjusted as necessary.
It should be read in conjunction with the Consolidated Financial Statements, the accompanying Notes to the Consolidated Financial Statements in this Form 10-K, and other information contained in this document. For discussion of 2022 results as compared to 2021 results, see “Item 7.
It should be read in conjunction with the Consolidated Financial Statements, the accompanying Notes to the Consolidated Financial Statements in this Form 10-K, and other information contained in this document. For discussion of 2023 results as compared to 2022 results, see “Item 7.
Funding activities are monitored and governed through Truist’s overall ALM process under the governance and oversight of the MRLCC, which is further discussed in the “Market Risk” section in MD&A. The following section provides a brief description of the various sources of funds.
Funding activities are monitored and governed through Truist’s overall ALM process under the governance and oversight of the ALCO, which is further discussed in the “Market Risk” section in MD&A. The following section provides a brief description of the various sources of funds.
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 (interest rate risk, equity risk, foreign exchange rate risk, credit spread risk, and commodity price risk) are included in the Company’s comprehensive stress testing framework.
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.
In addition to the level of liquid assets, such as cash, cash equivalents, and AFS 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.
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.
The major components of net interest income 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 9: Taxable-Equivalent Net Interest Income and Rate / Volume Analysis 2023 vs. 2022 2022 vs. 2021 Year Ended December 31, (Dollars in millions) Average Balances (1) Annualized Yield/Rate (2) Income/Expense Incr.
The major components of net interest income 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. 50 Truist Financial Corporation Table 9: Taxable-Equivalent Net Interest Income and Rate / Volume Analysis 2024 vs. 2023 2023 vs. 2022 Year Ended December 31, (Dollars in millions) Average Balances (1) Annualized Yield/Rate (2) Income/Expense (2) Incr.
The long-term growth rate used in determining the terminal value of each reporting unit was 3% as of October 1, 2023, based on management’s assessment of the minimum expected terminal growth rate of each reporting unit.
The long-term growth rate used in determining the terminal value of each reporting unit was 3% as of October 1, 2024, based on management’s assessment of the minimum expected terminal growth rate of each reporting unit.
The Committee is responsible for approving and periodically reviewing the Company’s risk management framework and risk management policies as well as monitoring the Company’s risk profile, approving risk appetite statements, and providing input to management regarding Truist’s risk appetite and risk profile.
The BRC is responsible for approving and periodically reviewing the Company’s risk management framework and risk management policies as well as monitoring the Company’s risk profile, approving risk appetite statements, and providing input to management regarding Truist’s risk appetite and risk profile.
When market observable data is not available, which generally occurs due to the lack of liquidity or inactive markets for certain securities, the valuation of the security is subjective and may involve substantial judgment by management to reflect unobservable input assumptions. MSRs Truist’s primary class of MSRs for which it separately manages the economic risks relates to residential mortgages.
When market observable data is not available, which generally occurs due to the lack of liquidity or inactive markets for certain securities, the valuation of the security is subjective and may involve substantial judgment by management to reflect unobservable input assumptions. 84 Truist Financial Corporation MSRs Truist’s primary class of MSRs for which it separately manages the economic risks relates to residential mortgages.
In general, the goals of the investment portfolio are: (i) to provide sufficient liquid assets to meet unanticipated deposit and loan fluctuations and overall funds management objectives; (ii) to provide eligible securities to secure public funds, trust deposits and other borrowings; and (iii) to earn an optimal return on funds invested commensurate with meeting the requirements of (i) and (ii) and consistent with the Company’s risk appetite.
In general, the goals of the investment portfolio are: (i) to provide sufficient liquid assets to meet unanticipated deposit and loan fluctuations and overall corporate treasury objectives; (ii) to provide eligible securities to secure public funds, trust deposits, and other borrowings; and (iii) to earn an optimal return on funds invested commensurate with meeting regulatory requirements, consistent with the Company’s risk appetite.
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 and its subsidiaries, remain a source of strength for its subsidiaries, and provide a competitive return to shareholders.
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.
Fair Value Disclosures,” and “Critical Accounting Policies” herein for discussion of valuation policies and methodologies. Securitizations As of December 31, 2023, 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 $49 million.
Fair Value Disclosures,” and “Critical Accounting Policies” herein for discussion of valuation policies and methodologies. Securitizations As of December 31, 2024, 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 $100 million.
The following discussion describes the underwriting procedures and overall risk management of Truist’s lending function. Underwriting Approach The loan portfolio is a primary source of profitability and risk; therefore, proper loan underwriting is critical to Truist’s long-term financial success.
Truist Financial Corporation 77 The following discussion describes the underwriting procedures and overall risk management of Truist’s lending function. Underwriting Approach The loan portfolio is a primary source of profitability and risk; therefore, proper loan underwriting is critical to Truist’s long-term financial success.
(Decr.) Change due to Incr. (Decr.) Change due to 2023 2022 2021 2023 2022 2021 2023 2022 2021 Rate Volume Rate Volume Assets AFS and HTM securities at amortized cost: U.S.
(Decr.) Change due to Incr. (Decr.) Change due to 2024 2023 2022 2024 2023 2022 2024 2023 2022 Rate Volume Rate Volume Assets AFS and HTM securities at amortized cost: U.S.
Basis of Presentation” for additional discussion regarding reclassifications. Critical Accounting Policies 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.
Refer to “Note 1. Basis of Presentation” for additional discussion regarding reclassifications. Critical Accounting Policies 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.
Table 14: Composition of Securities Portfolio (Dollars in millions) Dec 31, 2023 Dec 31, 2022 AFS securities (at fair value): U.S.
Table 14: Composition of Securities Portfolio (Dollars in millions) Dec 31, 2024 Dec 31, 2023 AFS securities (at fair value): U.S.
Basis of Presentation.” Truist Financial Corporation 83 Fair Value of Financial Instruments The vast majority of assets and liabilities measured at fair value on a recurring basis are based on either quoted market prices or market prices for similar instruments. Refer to “Note 18. Fair Value Disclosures” for additional disclosures regarding the fair value of financial instruments and “Note 2.
Basis of Presentation.” Fair Value of Financial Instruments The vast majority of assets and liabilities measured at fair value on a recurring basis are based on either quoted market prices or market prices for similar instruments. Refer to “Note 18. Fair Value Disclosures” for additional disclosures regarding the fair value of financial instruments.
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 in Truist’s business units.
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.
Table 37: Capital Requirements Minimum Capital Well-Capitalized Minimum Capital Plus Stress Capital Buffer (1) Truist Truist Bank CET1 4.5 % NA 6.5 % 7.4 % Tier 1 capital 6.0 6.0 % 8.0 8.9 Total capital 8.0 10.0 10.0 10.9 Leverage ratio 4.0 NA 5.0 NA Supplementary leverage ratio 3.0 NA NA NA (1) Reflects a SCB requirement of 2.9% applicable to Truist as of December 31, 2023.
Table 39: Capital Requirements Minimum Capital Well-Capitalized Minimum Capital Plus Stress Capital Buffer (1) Truist Truist Bank CET1 4.5 % NA 6.5 % 7.3 % Tier 1 capital 6.0 6.0 % 8.0 8.8 Total capital 8.0 10.0 10.0 10.8 Leverage ratio 4.0 NA 5.0 NA Supplementary leverage ratio 3.0 NA NA NA (1) Reflects a SCB requirement of 2.8% applicable to Truist as of December 31, 2024.
MRO tracks issues that have been identified during model validation or through ongoing monitoring and engages with model owners to ensure their timely remediation. MRO gauges model risk utilizing a collection of key risk indicators, which are periodically reported to relevant committees, including but not limited to, the Model Risk Management Committee and the ERC.
MRO tracks issues that have been identified during model validation or through ongoing monitoring and engages with model owners to drive timely remediation. MRO gauges model risk utilizing a collection of key risk indicators, which are periodically reported to relevant committees, including the Model Risk Management Committee and the ERC.
The commercial loan and lease portfolio consists of lending to public and private business clients and is composed of commercial and industrial, owner occupied, equipment leasing and financing, commercial real estate, government and institutional financing, premium financing, and dealer floor plan financing. In accordance with the Company’s lending policy, each commercial loan undergoes a detailed underwriting process.
The commercial loan and lease portfolio consists of lending to public and private business clients and includes commercial and industrial, owner occupied, equipment leasing and financing, CRE, government and institutional financing, premium financing, and dealer floor plan financing. In accordance with the Company’s lending policy, each commercial loan undergoes a detailed underwriting process.
Excludes basis adjustments for fair value hedges. (2) Yields are stated on a TE basis utilizing federal tax rate. 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. Interest income includes certain fees, deferred costs, and dividends.
(2) Yields are stated on a TE basis utilizing a federal tax rate of 21%. Interest income includes certain fees, deferred costs, and dividends. 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.
Models are owned by the applicable BUs, who are responsible for the development, implementation, and use of their models. Oversight of these functions is performed by the MRO, which is a component of the RMO.
Models are owned by the applicable business units, which are responsible for the development, implementation, and use of their models. Oversight of these functions is performed by the MRO, which is a component of the RMO.
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 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 expected life of MBS will differ from contractual maturities because borrowers may have the right to call or prepay the underlying mortgage loans. 56 Truist Financial Corporation Lending Activities Truist strives to meet the credit needs of its clients while pursuing a balanced strategy of loan profitability, loan growth, and loan quality.
The expected life of MBS will differ from contractual maturities because borrowers may have the right to call or prepay the underlying mortgage loans with or without call or prepayment penalties. Lending Activities Truist strives to meet the credit needs of its clients while pursuing a balanced strategy of loan profitability, loan growth, and loan quality.
The amount of deposits above the FDIC’s limit of $250,000 was $175.1 billion and $189.6 billion as of December 31, 2023 and 2022, respectively, calculated using the same methodology as the Call Report for Truist Bank.
The amount of deposits above the FDIC’s limit of $250,000 was $179.1 billion and $175.1 billion as of December 31, 2024 and 2023, respectively, calculated using the same methodology as the Call Report for Truist Bank.
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 is also subject to risk-based capital guidelines for market risk under the Market Risk Rule. 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.
As part of ongoing monitoring efforts, the performance of all trading risk models are reviewed regularly to preemptively address emerging developments in financial markets, assess evolving modeling approaches, and identify potential model enhancement.
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 enhancement.
At December 31, 2023, the ALLL was 3.0x annualized net charge-offs, compared to 5.3x at December 31, 2022. 64 Truist Financial Corporation 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.
At December 31, 2024, the ALLL was 2.7x annualized net charge-offs, compared to 3.0x at December 31, 2023. Truist Financial Corporation 67 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.
The remaining accruals at December 31, 2023 are generally expected to be utilized within one year, unless they relate to specific contracts that expire later. The following table presents a summary of merger-related and restructuring charges and the related accruals.
The remaining accruals at December 31, 2024 are generally expected to be utilized within one year, unless they relate to specific contracts that expire later. Truist Financial Corporation 53 The following table presents a summary of restructuring charges and the related accruals.
They are generally collateralized by one-to-four-family residential real estate, typically have loan-to-collateral value ratios of 80% or less at origination, or have mortgage insurance as required by investors and are made to borrowers in good credit standing.
They are generally collateralized by one-to-four-family residential real estate, typically have loan-to-collateral value ratios of 80% or less at origination, or have mortgage insurance as required by investors and are made to borrowers that meet Truist’s credit standards.
Operational Risk Operational risk is the risk to current or anticipated earnings or capital arising from inadequate or failed internal processes, people, and systems or from external events. It includes legal risk, which is the risk of loss arising from defective transactions, litigation or claims made, or the failure to adequately protect company-owned assets.
Operational Risk Operational risk is the risk of loss associated with inadequate or failed internal processes, people, systems, or from external events. It includes legal risk, which is the risk of loss arising from defective transactions, litigation or claims made, or the failure to adequately protect company-owned assets.
(3) Includes cash equivalents, interest-bearing deposits with banks, FHLB stock and other earning assets. Truist Financial Corporation 49 Provision for Credit Losses The provision for credit losses was $2.1 billion for the year ended December 31, 2023 compared to $777 million in 2022.
(3) Includes cash equivalents, interest-bearing deposits with banks, FHLB stock, and other earning assets. Truist Financial Corporation 51 Provision for Credit Losses The provision for credit losses was $1.9 billion for the year ended December 31, 2024 compared to $2.1 billion for the year ended December 31, 2023.
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 sufficient to meet the projected net stressed cash-flow needs and maintain compliance with regulatory requirements.
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.
Total liabilities at December 31, 2023 were $476.1 billion, a decrease of $18.6 billion, or 3.8%, from the prior year, reflecting a decrease of $17.6 billion, or 4.3%, in deposits and a decrease of $4.3 billion, or 9.9%, in long-term debt, partially offset by an increase of $1.4 billion, or 6.0%, in short-term borrowings.
Total liabilities at December 31, 2024 were $467.5 billion, a decrease of $8.6 billion, or 1.8%, from the prior year, reflecting a decrease of $5.3 billion, or 1.3%, in deposits and a decrease of $4.0 billion, or 10.2%, in long-term debt, partially offset by an increase of $4.4 billion, or 17.6%, in short-term borrowings.
Truist Financial Corporation 55 The following table presents the securities portfolio by major category of security holdings with ranges of maturities and average yields: Table 15: Securities Yields by Major Category and Maturity December 31, 2023 (Dollars in millions) AFS HTM Fair Value Effective Yield (1) Amortized Cost Effective Yield (1) U.S.
The effective duration of the HTM securities portfolio was 7.0 years at December 31, 2024 and 7.3 years at December 31, 2023. 56 Truist Financial Corporation The following table presents the securities portfolio by major category of security holdings with ranges of maturities and average yields: Table 15: Securities Yields by Major Category and Maturity December 31, 2024 (Dollars in millions) AFS HTM Fair Value Effective Yield (1) Amortized Cost Effective Yield (1) U.S.
MRO manages model risk in a holistic manner through a suite of model governance and model validation activities. The risk of each model is assessed and classified into various risk tiers. Additionally, MRO maintains an enterprise-wide model inventory containing relevant model information.
MRO seeks to manage model risk through a suite of model governance and model validation activities. The risk of each model is assessed and classified into various risk tiers. Additionally, MRO maintains an enterprise-wide model inventory containing relevant model information.
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 thoroughly reviewed in the context of VaR model use and performance. There was no change in the capital multiplication factor over the preceding twelve months.
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 thoroughly reviewed in the context of VaR model use and performance.
CB&W average total deposits decreased $15.7 billion, or 6.2%, for the year ended December 31, 2023 compared to the prior year primarily due to decreases in average interest-bearing checking, money market and savings, and noninterest-bearing deposits, partially offset by an increase in time deposits.
CSBB average total deposits decreased $7.3 billion, or 3.3%, for the year ended December 31, 2024 compared to the prior year primarily due to decreases in average interest-bearing checking, noninterest-bearing deposits, and money market and savings, partially offset by an increase in time deposits.
As of December 31, 2023, Truist held or serviced the first lien on 32% of its second lien positions.
As of December 31, 2024, Truist held or serviced the first lien on 33% of its second lien positions.
Table 21: Asset Quality Ratios (Continued) Year Ended December 31, 2023 2022 2021 Net charge-offs as a percentage of average loans and leases HFI: Commercial: Commercial and industrial 0.20 % 0.04 % 0.10 % CRE 0.71 0.02 0.01 Commercial construction 0.04 (0.07) (0.03) Consumer: Residential mortgage 0.01 (0.01) 0.02 Home equity (0.12) (0.11) (0.11) Indirect auto 1.66 1.17 0.92 Other consumer 1.40 1.14 0.72 Student 4.39 0.34 0.31 Credit card 3.85 2.98 2.42 Total 0.50 0.27 0.24 Ratio of ALLL to net charge-offs 3.0x 5.3x 6.4x The following table presents activity related to NPAs: Table 22: Rollforward of NPAs (Dollars in millions) 2023 2022 Balance, January 1 $ 1,250 $ 1,163 New NPAs 3,055 1,983 Advances and principal increases 842 662 Disposals of foreclosed assets (1) (603) (471) Disposals of NPLs (2) (237) (129) Charge-offs and losses (1,013) (494) Payments (1,357) (917) Transfers to performing status (440) (560) Other, net (9) 13 Ending balance, December 31 $ 1,488 $ 1,250 (1) Includes charge-offs and losses recorded upon sale of $196 million and $130 million for the year ended December 31, 2023 and 2022, respectively.
Table 21: Asset Quality Ratios (Continued) Year Ended December 31, 2024 2023 2022 Net charge-offs as a percentage of average loans and leases HFI: Commercial: Commercial and industrial 0.20 % 0.20 % 0.04 % CRE 1.31 0.71 0.02 Commercial construction (0.03) 0.04 (0.07) Consumer: Residential mortgage (0.01) 0.01 (0.01) Home equity (0.07) (0.12) (0.11) Indirect auto 2.11 1.66 1.17 Other consumer 1.73 1.40 1.14 Student — 4.39 0.34 Credit card 5.26 3.85 2.98 Total 0.59 0.50 0.27 Ratio of ALLL to net charge-offs 2.7x 3.0x 5.3x The following table presents activity related to NPAs: Table 22: Rollforward of NPAs (Dollars in millions) 2024 2023 Balance, January 1 $ 1,488 $ 1,250 New NPAs 3,331 3,055 Advances and principal increases 454 842 Disposals of foreclosed assets (1) (616) (603) Disposals of NPLs (2) (223) (237) Charge-offs and losses (1,313) (1,013) Payments (1,308) (1,357) Transfers to performing status (309) (440) Other, net (27) (9) Ending balance, December 31 $ 1,477 $ 1,488 (1) Includes charge-offs and losses recorded upon sale of $260 million and $196 million for the years ended December 31, 2024 and 2023, respectively.
This measure is useful for evaluating the performance of a business consistently, whether acquired or developed internally. Truist’s management uses this measure to assess balance sheet risk and shareholder value. Total shareholders’ equity was $59.3 billion at December 31, 2023, a decrease of $1.3 billion from December 31, 2022.
This measure is useful for evaluating the performance of a business consistently, whether acquired or developed internally. Truist’s management uses this measure to assess balance sheet risk and shareholder value. Total shareholders’ equity was $63.7 billion at December 31, 2024, an increase of $4.4 billion from December 31, 2023.
The following table summarizes certain VaR-based measures for the 12 months ended December 31, 2023 and 2022. 72 Truist Financial Corporation Table 33: VaR-based Measures Year Ended December 31, 2023 2022 (Dollars in millions) 10-Day Holding Period 1-Day Holding Period 10-Day Holding Period 1-Day Holding Period VaR-based Measures: Maximum $ 30 $ 14 $ 38 $ 14 Average 17 7 17 5 Minimum 10 4 6 3 Period-end 23 11 20 6 VaR by Risk Class: Interest Rate Risk 5 6 Credit Spread Risk 2 8 Equity Price Risk 5 1 Foreign Exchange Risk 1 — Portfolio Diversification (2) (9) Period-end 11 6 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.
Truist Financial Corporation 75 Table 35: VaR-based Measures Year Ended December 31, 2024 2023 (Dollars in millions) 10-Day Holding Period 1-Day Holding Period 10-Day Holding Period 1-Day Holding Period VaR-based Measures: Maximum $ 28 $ 12 $ 30 $ 14 Average 21 7 17 7 Minimum 12 4 10 4 Period-end 16 6 23 11 VaR by Risk Class: Interest Rate Risk 6 5 Credit Spread Risk 6 2 Equity Price Risk 6 5 Foreign Exchange Risk 1 1 Portfolio Diversification (12) (2) Period-end 6 11 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.
Table 20: Asset Quality Ratios Dec 31, 2023 Dec 31, 2022 Loans 30-89 days past due and still accruing as a percentage of loans and leases HFI 0.63 % 0.70 % Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI 0.17 0.49 NPLs as a percentage of loans and leases HFI 0.44 0.36 NPLs as a percentage of total loans and leases (1) 0.46 0.36 NPAs as a percentage of: Total assets (1) 0.28 0.23 Loans and leases HFI plus foreclosed property 0.46 0.38 ALLL as a percentage of loans and leases HFI 1.54 1.34 Ratio of ALLL to NPLs 3.5x 3.7x Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI, excluding government guaranteed (2) 0.04 % 0.04 % (1) Includes LHFS.
Table 20: Asset Quality Ratios Dec 31, 2024 Dec 31, 2023 Loans 30-89 days past due and still accruing as a percentage of loans and leases HFI 0.64 % 0.63 % Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI 0.19 0.17 NPLs as a percentage of loans and leases HFI 0.47 0.44 NPLs as a percentage of total loans and leases (1) 0.46 0.46 NPAs as a percentage of: Total assets (1) 0.28 0.28 Loans and leases HFI plus foreclosed property 0.48 0.46 ALLL as a percentage of loans and leases HFI 1.59 1.54 Ratio of ALLL to NPLs 3.4x 3.5x Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI, excluding government guaranteed (2) 0.05 % 0.04 % (1) Includes LHFS.
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 being able to withstand sustained market disruptions that could limit access to the capital markets.
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 being able to withstand sustained market disruptions that could limit access to the capital markets. At December 31, 2024, the Parent Company held cash on hand to meet these requirements.
For the Company’s qualified plans, a decrease of 25 basis points in the discount rate would result in additional pension expense of approximately $29 million for 2024, while a decrease of 100 basis points in the expected return on plan assets would result in an increase of approximately $145 million in pension expense for 2024.
For the Company’s qualified plans, a decrease of 50 basis points in the discount rate would result in additional pension expense of approximately $20 million for 2025, while a decrease of 50 basis points in the expected return on plan assets would result in an increase of approximately $73 million in pension expense for 2025.
Net charge-offs during 2023 totaled $1.6 billion, or 0.50% as a percentage of average loans, and were up twenty-three basis points compared to the prior year, primarily driven by higher charge-offs in the commercial and industrial, CRE, indirect auto, other consumer, and credit card portfolios as well as the sale of the student loan portfolio.
Net charge-offs during 2024 totaled $1.8 billion, or 0.59% as a percentage of average loans, and were up nine basis points compared to the prior year, primarily driven by higher charge-offs in the CRE, other consumer, credit card, and indirect auto portfolios, partially offset by the sale of the student loan portfolio in the prior year.
The following table summarizes certain information for the past three years with respect to short-term borrowings excluding trading liabilities, hedges, and collateral in excess of derivative exposure: Table 30: Short-Term Borrowings As Of / For The Year Ended December 31, (Dollars in millions) 2023 2022 2021 Securities sold under agreements to repurchase: Maximum outstanding at any month-end during the year $ 4,120 $ 6,033 $ 3,279 Balance outstanding at end of year 2,427 2,128 2,435 Average outstanding during the year 2,472 2,670 2,382 Average interest rate during the year 5.18 % 1.33 % 0.07 % Average interest rate at end of year 5.39 4.36 0.01 Federal funds purchased and short-term borrowed funds: Maximum outstanding at any month-end during the year $ 26,453 $ 22,324 $ 6,244 Balance outstanding at end of year 22,401 19,340 808 Average outstanding during the year 22,007 10,135 1,936 Average interest rate during the year 5.26 % 2.79 % 0.12 % Average interest rate at end of year 5.15 4.38 0.08 At December 31, 2023, short-term borrowings totaled $24.8 billion, an increase of $1.4 billion compared to December 31, 2022.
The following table summarizes certain information for the past three years with respect to short-term borrowings excluding trading liabilities, hedges, and collateral in excess of derivative exposure: Table 32: Short-Term Borrowings As Of / For The Year Ended December 31, (Dollars in millions) 2024 2023 2022 Securities sold under agreements to repurchase: Maximum outstanding at any month-end during the year $ 9,675 $ 4,120 $ 6,033 Balance outstanding at end of year 9,675 2,427 2,128 Average outstanding during the year 2,947 2,472 2,670 Average interest rate during the year 5.13 % 5.18 % 1.33 % Average interest rate at end of year 4.42 5.39 4.36 Federal funds purchased and short-term borrowed funds: Maximum outstanding at any month-end during the year $ 28,218 $ 26,453 $ 22,324 Balance outstanding at end of year 19,530 22,401 19,340 Average outstanding during the year 21,552 22,007 10,135 Average interest rate during the year 5.39 % 5.26 % 2.79 % Average interest rate at end of year 4.04 5.15 4.38 At December 31, 2024, short-term borrowings totaled $29.2 billion, an increase of $4.4 billion compared to December 31, 2023.
When observable market prices are not available, the Company uses judgment and estimates fair value using internal models that reflect assumptions consistent with those that would be used by a market participant in estimating fair value. Refer to “Note 1.
When observable market prices are not available, the Company uses judgment and estimates fair value using internal models that reflect assumptions consistent with those that would be used by a market participant in estimating fair value. Refer to “Note 18. Fair Value Disclosures” for further information on the Company’s trading securities and securities sold short.
Quantitative models are designed to forecast probability of default, exposure at default and loss given default by correlating certain macroeconomic forecast data to historical experience. The models are generally applied at the portfolio level to pools of loans with similar risk characteristics.
The ACL estimation process includes both quantitatively calculated components as well as qualitative components. Quantitative models are designed to forecast probability of default, exposure at default and loss given default by correlating certain macroeconomic forecast data to historical experience. The models are generally applied at the portfolio level to pools of loans with similar risk characteristics.
The allowance for credit losses was $5.1 billion and includes $4.8 billion for the allowance for loan and lease losses and $295 million for the reserve for unfunded commitments. The ALLL ratio was 1.54%, compared to 1.34% at December 31, 2022.
The allowance for credit losses was $5.2 billion and includes $4.9 billion for the allowance for loan and lease losses and $304 million for the reserve for unfunded commitments. The ALLL ratio was 1.59%, compared to 1.54% at December 31, 2023.
Excluding government guaranteed loans, the ratio of loans 90 days or more past due and still accruing as a percentage of loans and leases HFI was 0.04% at December 31, 2023 and 2022.
Excluding government guaranteed loans, the ratio of loans 90 days or more past due and still accruing as a percentage of loans and leases HFI was 0.05% at December 31, 2024, up one basis point compared to December 31, 2023.
Average short-term borrowings were $24.5 billion, or 5.2% of total funding, for the year ended December 31, 2023, as compared to $15.0 billion, or 3.2%, for the prior year. Long-term debt provides funding and, to a lesser extent, regulatory capital, and primarily consists of senior and subordinated notes issued by Truist and Truist Bank.
Average short-term borrowings were $24.5 billion for the years ended December 31, 2024 and 2023, representing 5.5% and 5.2% of total funding, respectively. 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.
Truist’s CRE and commercial construction portfolios totaled $29.3 billion as of December 31, 2023, which includes 33% related to multifamily residential, 17% related to office, 17% related to industrial, 14% related to retail, and the remainder composed of hotel and other commercial real estate.
Truist’s CRE and commercial construction portfolios totaled $28.9 billion as of December 31, 2024, which includes 36% related to multifamily residential, 21% related to industrial, 14% related to office, 13% related to retail, and the remainder composed of hotel and other commercial real estate.
Circumstances that could negatively impact the fair value of Truist’s reporting units in the future include a sustained decrease in Truist’s stock price, continued decline in industry peer multiples, an increase in the applicable discount rate and further deterioration in the reporting units’ forecasts.
Circumstances that could negatively impact the fair value for the WB reporting unit in the future include a sustained decrease in Truist’s stock price, a decline in industry peer multiples, an increase in the applicable discount rate, and deterioration in the reporting unit’s forecast.
LCR and HQLA The LCR rule requires that Truist and Truist Bank maintain an amount of eligible HQLA that is sufficient to meet its 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 satisfy operational requirements of the LCR rule.
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.
Approximately 62% of deposits are insured or collateralized at December 31, 2023, compared to 61% at December 31, 2022. Truist deposit accounts are typically based on long-term relationships and include multiple products and services.
Brokered deposits were $28.1 billion at December 31, 2024 compared to $31.3 billion at December 31, 2023. Approximately 60% of deposits are insured or collateralized at December 31, 2024, compared to 62% at December 31, 2023. Truist deposit accounts are typically based on long-term relationships that include multiple products and services.
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. Effective management of market risk is essential to achieving Truist’s strategic financial objectives.
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.
Table 25: Allocation of ALLL by Category December 31, 2023 December 31, 2022 (Dollars in millions) Amount % ALLL in Each Category % Loans in Each Category Amount % ALLL in Each Category % Loans in Each Category Commercial and industrial $ 1,404 29.4 % 51.6 % $ 1,409 32.3 % 50.3 % CRE 616 12.8 7.2 224 5.1 7.0 Commercial construction 174 3.6 2.1 46 1.1 1.8 Residential mortgage 298 6.2 17.8 399 9.1 17.4 Home equity 89 1.9 3.2 90 2.0 3.3 Indirect auto 942 19.6 7.3 981 22.4 8.6 Other consumer 890 18.5 9.2 770 17.6 8.5 Student — — — 98 2.2 1.6 Credit card 385 8.0 1.6 360 8.2 1.5 Total ALLL 4,798 100.0 % 100.0 % 4,377 100.0 % 100.0 % RUFC 295 272 Total ACL $ 5,093 $ 4,649 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.
Table 27: Allocation of ALLL by Category December 31, 2024 December 31, 2023 (Dollars in millions) Amount % ALLL in Each Category % Loans in Each Category Amount % ALLL in Each Category % Loans in Each Category Commercial and industrial $ 1,284 26.4 % 50.7 % $ 1,404 29.4 % 51.6 % CRE 643 13.2 6.6 616 12.8 7.2 Commercial construction 257 5.3 2.8 174 3.6 2.1 Residential mortgage 204 4.2 18.1 298 6.2 17.8 Home equity 89 1.8 3.1 89 1.9 3.2 Indirect auto 955 19.7 7.5 942 19.6 7.3 Other consumer 994 20.5 9.6 890 18.5 9.2 Credit card 431 8.9 1.6 385 8.0 1.6 Total ALLL 4,857 100.0 % 100.0 % 4,798 100.0 % 100.0 % RUFC 304 295 Total ACL $ 5,161 $ 5,093 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 Financial Corporation 63 ACL Activity related to the ACL is presented in the following tables: Table 24: Activity in ACL Year Ended December 31, (Dollars in millions) 2023 2022 2021 Balance, beginning of period (1) $ 4,649 $ 4,695 $ 6,199 Provision for credit losses 2,109 777 (813) Charge-offs: Commercial and industrial (390) (143) (243) CRE (166) (13) (10) Commercial construction (5) (1) (2) Residential mortgage (10) (9) (23) Home equity (10) (13) (16) Indirect auto (531) (411) (336) Other consumer (477) (381) (255) Student (108) (22) (24) Credit card (223) (176) (150) Total charge-offs (1,920) (1,169) (1,059) Recoveries: Commercial and industrial 70 87 107 CRE 3 8 6 Commercial construction 3 5 4 Residential mortgage 6 16 12 Home equity 23 25 29 Indirect auto 107 91 92 Other consumer 78 79 74 Student — 1 1 Credit card 35 34 37 Total recoveries 325 346 362 Net charge-offs (1,595) (823) (697) Other (2) (70) — 6 Balance, end of period $ 5,093 $ 4,649 $ 4,695 ACL: (1) ALLL 4,798 4,377 4,435 RUFC 295 272 260 Total ACL $ 5,093 $ 4,649 $ 4,695 (1) Excludes provision for credit losses and allowances related to other financial assets at amortized cost.
Loans and ACL,” including loans by origination year and credit quality indicator. 66 Truist Financial Corporation ACL Activity related to the ACL is presented in the following tables: Table 26: Activity in ACL Year Ended December 31, (Dollars in millions) 2024 2023 2022 Balance, beginning of period (1) $ 5,093 $ 4,649 $ 4,695 Provision for credit losses 1,870 2,109 777 Charge-offs: Commercial and industrial (395) (390) (143) CRE (316) (166) (13) Commercial construction — (5) (1) Residential mortgage (3) (10) (9) Home equity (9) (10) (13) Indirect auto (591) (531) (411) Other consumer (606) (477) (381) Student — (108) (22) Credit card (296) (223) (176) Total charge-offs (2,216) (1,920) (1,169) Recoveries: Commercial and industrial 87 70 87 CRE 34 3 8 Commercial construction 2 3 5 Residential mortgage 6 6 16 Home equity 16 23 25 Indirect auto 120 107 91 Other consumer 110 78 79 Student — — 1 Credit card 38 35 34 Total recoveries 413 325 346 Net charge-offs (1,803) (1,595) (823) Other (2) 1 (70) — Balance, end of period $ 5,161 $ 5,093 $ 4,649 ACL: (1) ALLL 4,857 4,798 4,377 RUFC 304 295 272 Total ACL $ 5,161 $ 5,093 $ 4,649 (1) Excludes provision for credit losses and allowances related to other financial assets at amortized cost.
ACL Truist’s ACL represents management’s best estimate of expected future credit losses related to the loan and lease portfolios and off-balance sheet lending commitments at the balance sheet date. Estimates of expected future loan and lease losses are determined by using statistical models and management’s judgement. The ACL estimation process includes both quantitatively calculated components as well as qualitative components.
Truist Financial Corporation 83 ACL Truist’s ACL represents management’s best estimate of expected future credit losses related to the loan and lease portfolios and off-balance sheet lending commitments at the balance sheet date. Estimates of expected future loan and lease losses are determined by using statistical models and management’s judgement.

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