Transcript: Truist Finl Q2 2026 Earnings Conference Call

Truist Finl (NYSE: TFC ) held its second-quarter earnings conference call on Friday. Below is the complete transcript from the call. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

23 per diluted share, a 37% increase compared to Q2 2025. The company announced leadership changes, with Mike Lyons taking over as CEO on September 1, emphasizing a focus on growth and profitability under his leadership. Both Consumer and Small Business Banking (CSBB) and Wholesale segments showed strong performance, with notable increases in deposit production and digital engagement. Truist Finl is shifting its loan portfolio strategy, reducing less strategic consumer lending, such as marine and recreational vehicle loans, and focusing more on high-quality commercial loans.

5% to 4%, citing headwinds in net interest income, but sees improvement in noninterest income. 9% and plans to repurchase $5 billion of shares in 2026. Asset quality remains strong, with stable credit performance and improved metrics across several portfolios. Management highlighted ongoing strategic investments in digital capabilities and efficiency improvements as key growth drivers.

Full Transcript OPERATOR Ladies and gentlemen, and welcome to the Truist Finl second quarter 2026 earnings conference call. Currently, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this event is being recorded.

It is now my pleasure to introduce your host, Mr. Brad Millsaps. Brad Millsaps, Investor Relations Thank you, Rocco, and good morning, everyone. Welcome to Truist Finl's second quarter 2026 earnings call.

With us today are our chairman and CEO Bill Rogers, our CFO Michael Maguire, our Chief Risk Officer Brad Bender, as well as other members of the Truist Finl senior management team. During this morning's call, they will discuss Truist Finl's second quarter 2026 results, share their perspectives on current business conditions, and provide an update on our outlook for 2026. com. Our presentation today will include forward-looking statements and certain non-GAAP financial measures.

Please review the disclosures on slides 2 and 3 of the presentation regarding these statements and measures, as well as the appendix for required reconciliations to GAAP. With that, I will turn it over to Bill. Bill Rogers, Chairman & CEO Great. Thanks, Brad.

And good morning, everyone, and thank you for joining our call today. Before we discuss our second quarter 2026 results, let's begin as we always do, with purpose on slide 4. At Truist Finl, our purpose is to inspire and build better lives and communities. And that purpose continues to guide how we serve our clients, support our teammates and create value for our stakeholders.

We also want to recognize that purpose is fueled by performance and committed leadership. During the second quarter, we announced that Mike Lyons will become Truist Finl's next President and Chief Executive Officer on September 1. At that time, I'll transition to an Executive Chair role until my planned retirement in April of next year. As a founder of Truist Finl, I am really excited about this important next chapter in our success journey.

Mike's an accomplished and respected financial services leader with a proven ability to drive growth, improve performance, and create long-term shareholder value. Throughout the selection process, it was clear to our board that he's the right leader for Truist Finl's future. He'll be leading a strong and experienced senior team that's helped build our momentum and position the company for continued success. Mike recognizes the strength of our franchise and the significant opportunities ahead.

He shares our commitment to building a high-performing company by serving our clients and teammates, improving profitability and returns, and delivering superior outcomes for our shareholders. I look forward to supporting Mike and our leadership team over the coming months to ensure a smooth transition and build on our momentum. So now let's turn to the results on slide 5. First, I want to step back and highlight what these results say about the progress we're making across Truist Finl.

Over the last several quarters, we've been clear about the actions we're taking to drive stronger returns, improve efficiency, and allocate capital to the highest value opportunities across the company. We continue to make deliberate choices about where we grow, where we invest, and how we optimize our balance sheet. While some of these choices may create near-term trade-offs in individual growth metrics, they're producing the outcomes we intended and are driving stronger profitability and improved financial performance.

Importantly, these results demonstrate that we're making meaningful progress in building a more earnings-efficient and more capital-efficient growth company. As you can see on slide 5, our results show significant improvement in our profitability and returns for the second quarter. 23 per diluted share, representing a 37% increase over the second quarter 2025. During the quarter, we added new clients, deepened existing relationships, and grew profitably in the businesses and products where we've chosen to focus.

Along with our expense discipline, this contributed to more than 300 basis points of year-over-year positive operating leverage. 4%. These results reinforce that we remain on track to deliver our full-year profitability and return objectives and provide confidence in our abilities to sustain this level of performance over time. So before I hand the call over to Mike, I'd like to highlight how our strategy is translating into tangible results across our business segments and our digital strategy, and we have that on slides 6 and 7.

So let me start with Consumer and Small Business Banking. CSBB delivered another solid quarter that was consistent with our expectations and strategy to drive profitability improvement across the enterprise. Consumer behavior remained resilient during the quarter with stable liquidity, spending, and credit trends that remain within our expectations. Average consumer and small business loans were up 2% versus the second quarter of 2025 as we slowed production in certain less strategic and less profitable consumer categories, which Mike will discuss in more detail later in the call.

Average non-maturity consumer and small business deposits increased 2% versus the second quarter, driven by a 39% increase in new-to-bank deposit production. Average deposits per client were higher across all income segments, but we did see continued client demand for higher-yielding deposit categories. Premier Banking, which serves clients with $100,000 to $1 million in combined deposits and investments and represents more than half of CSBB deposits, was again a source of strength. This business delivered a 20% year-over-year increase in new deposit production balances, a 23% increase in advisor productivity, and a 9% increase in financial planning activity.

Our investments in Premier are also creating meaningful opportunities across the company, with referrals from CSBB to Wealth Management increasing 15% over the first half of 2025. As you can see on the slide, digital also continues to be a key growth engine. 4 million, while digital transaction volume increased 7% to 93 million transactions. Approximately 85% of client logins now occur through mobile, underscoring the increasing central role our mobile capabilities play in serving clients.

Increasing digital engagement is not only improving the client experience but also strengthening client economics. Digital-active clients generate more revenue and higher profitability than non-digital clients, while greater self-service adoption continues to improve efficiency across the franchise. During the quarter, clients engaged with Truist Assist nearly 2 million times, up 60% year over year, reflecting growing adoption of self-service capabilities and our continued investment in the digital client experience.

Taken together, these results demonstrate our strategy to improve profitability, strengthen returns, and allocate capital towards the highest value opportunities across Consumer and Small Business Banking. Now turning to Wholesale on slide 7. In Wholesale we also delivered another strong quarter with continued momentum across loans, deposits, and fees while maintaining a disciplined focus on relationship returns and capital efficiency.

Over the past year we've significantly expanded our client base and strengthened existing relationships across the Wholesale franchise, driving broader adoption of our lending, deposit, payments, wealth management, and capital markets capabilities. This deeper engagement is translating into higher revenue per client, a more attractive revenue mix, and improved relationship profitability driven by an increasing share of revenue coming from non-credit sources.

Average Wholesale deposits increased 6% excluding the impact of certain large M&A-related deposits in the second quarter of last year, driven by broad-based deposit growth across client segments heavily tied to our focus on driving payments and liquidity solutions. Middle market deposits, an area where we've invested heavily, grew 12% year over year driven by 9% growth in our legacy markets and 27% growth in expansion markets such as Texas, Pennsylvania, and Ohio. Average Wholesale loans increased 8% compared with the second quarter of 2025, reflecting broad-based momentum across our industry banking, middle market, and commercial real estate teams.

As we continue to prioritize high-quality relationship-driven growth, Wholesale fee income continues to outpace balance sheet growth led by investment banking and trading and wealth management, reflecting strong client activity and improved deal economics and continued momentum in our wealth franchise. Advisory revenue increased 27% year-to-date, including strong growth across equity capital markets, M&A advisory, and financial risk management. Overall, we remain encouraged by the breadth of growth across the franchise and the continued progress in building a more profitable and capital-efficient Wholesale business.

With that, let me turn it over to Mike to discuss our financial results in more detail. Michael Maguire, Chief Financial Officer Thank you, Bill, and good morning, everyone. 23 per diluted share. Earnings per share increased 37% versus the second quarter of 2025 and 13% versus the first quarter of 2026.

2% linked quarter, due primarily to higher noninterest income. 5% versus the second quarter of 2025, due primarily to higher noninterest income led by growth in investment banking and trading and wealth management income. 4% versus the first quarter of 2026, primarily due to higher personnel expense and professional and outside processing expenses. 3% versus the second quarter of 2025, which helped drive 320 basis points of year over year.

9%. Next, I'll cover loans and leases on slide 9. 3% growth in average commercial loans, partially offset by a decline in average consumer loans. End of period loans increased modestly linked quarter, reflecting slight growth in both commercial and consumer.

As a reminder, we expected 2026 loan growth to be driven primarily by commercial and other consumer categories, with slower loan growth in residential mortgage and indirect auto. 1% driven primarily by growth in interest checking. We continue to see healthy client deposit activity. However, deposit mix trends are being pressured by elevated rate-seeking behavior and migration into higher-rate products.

56%, as shown in the chart on the bottom right-hand side of the slide. Our cumulative interest-bearing deposit beta decreased from 46% to 45%, and our total deposit beta decreased from 31% to 30% on a linked quarter basis. 6% linked quarter, or $23 million, primarily due to the impact of one additional day in the second quarter and higher earning assets, partially offset by lower loan spreads. 98%, driven by slightly higher deposit costs, lower loan spreads, and a slightly larger balance sheet, as shown on the right-hand side of the slide.

5%. Our updated outlook reflects actions we have taken to improve profitability as well as certain market dynamics. First, we are continuing to optimize less strategic and lower-return lending portfolios that offer limited relationship potential, which has the effect of reducing NII and net interest margin but improves ROTCE.

Second, we now expect lower loan spreads than we anticipated based on two factors: one, we are reallocating capital from higher-yielding consumer loans into higher-quality but lower-yielding commercial loans where we expect to drive attractive relationship returns over time; and two, we're seeing continued broad-based, market-driven compression of loan spreads. The third headwind is our outlook for a less favorable deposit mix and therefore higher rate paid than we previously expected. These headwinds are partially offset by the benefits we expect to get from a higher medium and long-term interest rates.

As Bill discussed earlier, some of the actions that we are taking to improve profitability and returns involve trade-offs across individual metrics. For example, during the second quarter we discontinued the origination of marine and recreational vehicle loans, and we significantly reduced originations in several other less strategic and less profitable consumer lending units such as prime and non-prime auto. These actions are expected to reduce 2026 loan production across these portfolios by approximately 40% relative to 2025 production levels.

Many of these portfolios are accretive to net interest income and net interest margin but significantly dilutive to our long-term ROTC objectives and less strategic to our client-focused business model. While these actions may reduce near-term net interest income growth, they improve the overall profitability and the capital efficiency of our balance sheet, which was evident in the second quarter. We'll continue to evaluate similar actions that will enhance returns and improve capital efficiency, including further optimization of lower-return and less strategic portfolios.

Finally, as you can see on the right-hand side of the slide, we did update our fixed asset repricing outlook and our swap disclosure. While expected runoff in our fixed-rate loan portfolio remains largely unchanged, we do expect lower replacement volume due to the actions I just described, which is reflected in our updated NII outlook. 9% compared with the first quarter, reflecting strong growth in other income primarily driven by higher income from certain equity investments. Compared with the second quarter of 2025, noninterest income increased 17%, driven by strong performance across several of our fee-based businesses.

Investment banking and trading revenue increased 72%, benefiting from stronger client activity, improved deal economics, and continued momentum across our capital markets platform. Wealth management income increased 8%, supported by continued growth in client assets, advisor productivity, and financial planning activity, while card and treasury management fees grew only modestly. Underlying business trends remain encouraging as we see healthy client pipelines, and we continue to make investments in both products and talent.

Consistent with the trends Bill discussed earlier, fee income growth continues to outpace balance sheet growth, reflecting deeper client relationships and a more capital-efficient revenue mix across our company. Next, I'll cover noninterest expense on slide 13. Expense discipline remained a key focus during the quarter as we continued balancing investment in the business with our commitment to improving profitability. 4%, primarily reflecting higher incentive compensation associated with stronger business performance.