Truist Financial Corporation

Strong “underlying” earnings; GAAP pressured by balance-sheet repositioning (good + some bad) - Q3’26 GAAP EPS: $0.56; adjusted EPS: $1.16 (+12% YoY). - GAAP hurt by AFS securities repositioning losses (~$0.90 EPS) and RAC-related costs/losses (~$0.06 EPS), partially offset by a RAC reserve release (~+$0.36 EPS). - Adjusted ROTCE: 14.6% (+100 bps YoY), supported by higher earnings + continued capital return; overall results “broadly in line” with expectations.

Major portfolio “clean-up” with capital + credit benefits (surprising but clearly intentional) - Completed RAC sale: $5.5B loans sold; $5.2B net proceeds. - Reduced non-performing loans by 28% and expected annualized net charge-offs by ~10 bps. - Generated ~$1B (~23 bps) CET1, used to reposition AFS securities. - Announced agreement to sell LightStream (national unsecured personal loans): - $7.7B loans (substantially all of LightStream); expected Q4 close. - Expected net proceeds: ~$7.2B, ~$850M (20 bps) CET1, and ~7 bps reduction in annual net charge-offs. - Management frames these as part of a broader “sources and uses” review—not financial engineering, but shifting toward risk-adjusted returns and a higher-quality balance sheet.

Balance-sheet and capital actions: deposits up; loans down mainly from runoff/sales; CET1 slightly down (mixed) - Average deposits: +1.4% QoQ and +3.6% YoY, driven by higher interest-checking (including wholesale). - Average loans: -1.1% QoQ (to $326B), largely due to: - Strategic runoff / reduced originations (Marine & RV stopped; other less-aligned lending reduced) - RAC portfolio transfer to held-for-sale (then sale completed end of Q3) - CET1 ratio: 10.7%, down 20 bps QoQ from capital return + AFS repositioning, partially offset by earnings and RAC sale. - Capital returned in Q3: $1.8B total ($632M dividend + $1.2B buybacks).