Truist Posts Lower Quarterly Profit as New CEO Accelerates Pullback From Consumer Lending

Truist Financial reported third-quarter earnings on Friday that were weighed down by a large securities loss and the sale of a major consumer-lending business, even as the regional bank's new chief executive pressed ahead with a strategy of shedding non-core operations to lift long-term profitability.

The Charlotte, N.C.-based lender, one of the country's largest regional banks, said net income available to common shareholders fell to $680 million in the quarter, pulling diluted earnings per share down to 56 cents under generally accepted accounting principles, according to the earnings release filed with the Securities and Exchange Commission. That compares with $1.23 a share in the second quarter and $1.04 a share a year earlier. Stripped of one-time items, adjusted diluted earnings rose to $1.16 a share, up 12 percent from the third quarter of 2025.

The numbers

The gap between the GAAP and adjusted figures stemmed largely from a $1.4 billion pretax loss, equal to 90 cents a share, that Truist booked after repositioning part of its available-for-sale securities portfolio. That was partly offset by a $581 million benefit from releasing loan-loss reserves tied to the sale of Regional Acceptance Corporation, its near-prime auto lender, and by costs associated with that transaction. Adjusted revenue held roughly steady at $5.3 billion on a tax-equivalent basis, and the bank's adjusted return on tangible common equity came in at 14.6 percent, according to the filing that accompanied Truist's Form 8-K submitted to regulators on Friday morning.

Net interest margin ticked up two basis points from the prior quarter to 3.00 percent. Total loans held for investment fell 1.8 percent from June to $323.9 billion, mostly reflecting the $5.5 billion in auto loans moved off the balance sheet. Deposits rose 0.9 percent to $413.2 billion. Credit quality improved on paper, with nonperforming loans falling to 0.40 percent of total loans, though net charge-offs rose to 0.77 percent of average loans, driven in part by the accounting related to the RAC sale. The bank's preliminary common equity tier 1 capital ratio slipped 20 basis points to 10.7 percent after it repurchased $1.2 billion of stock and paid a 52-cent-a-share dividend.

How Truist got here

The results arrived five weeks into the tenure of Chief Executive Mike Lyons, a former president of PNC Financial Services Group who became the first outside leader of Truist since the bank was formed in the 2019 merger of BB&T and SunTrust. Lyons took over September 1 from Bill Rogers, who moved into the role of executive chairman and plans to retire in April 2027.

Truist's pullback from consumer lending predates Lyons's arrival but has accelerated under him. In the second quarter, the bank said it would stop originating new marine, recreational-vehicle and non-prime indirect auto loans, moves that executives acknowledged would weigh on net interest income in the near term, and it trimmed its 2026 revenue-growth guidance to a range of 3.5 to 4 percent, according to reporting on the bank's strategy shift over the summer. This quarter's release discloses that Truist agreed on October 14 to sell $7.7 billion of unsecured consumer loans — essentially all of the assets of LightStream, its online personal-lending platform — to the investment firm Carlyle Group. Terms of that transaction were not disclosed.

Who is affected

The retrenchment touches several groups differently. Truist shareholders have so far reacted favorably to the capital discipline; the bank's quarterly buybacks and dividend continued even as it absorbed the securities loss. Employees are a more direct casualty: a state WARN notice filed after Truist announced the Regional Acceptance Corporation sale in September showed the unit would lay off more than 250 workers across its Winterville and Greenville, North Carolina sites, with job losses beginning November 30 as RAC winds down toward a planned closure next July. Truist has said affected employees will be offered consideration for other roles within the company, severance pay and job-search assistance. Borrowers whose loans sit within LightStream and the former RAC book will see their accounts transferred to new owners. Truist's commercial and corporate clients, by contrast, are the intended beneficiaries of the strategy: management has said freed-up capital and expenses are meant to be redirected toward wholesale banking, wealth management and other fee-generating businesses rather than lower-return consumer loan categories.

Truist was not alone among regional lenders reporting Friday. Regions Financial, based in Birmingham, Alabama, posted third-quarter net income of $611 million, or 71 cents a diluted share, up 11 percent from a year earlier on both a reported and adjusted basis, according to Regions's own earnings filing. The contrast underscored how differently the quarter's results read across the sector depending on how much of a bank's profit was shaped by one-time restructuring charges versus steady loan and deposit growth.

What executives are saying

In the release, Lyons framed the quarter as evidence that Truist's overhaul is on track rather than as a setback tied to the GAAP earnings decline.

"We're simplifying the company and focusing our resources, capital, and expenses on the businesses and capabilities that will help us become the most important financial partner to our clients," Lyons said.

Lyons added that he had "become even more confident in the strength of our franchise and the significant opportunities ahead" since joining the bank. Not every outside analyst has been as sanguine about the trade-offs. Writing over the summer as the consumer-lending retreat began, bank analyst Michael Rose cautioned that Truist faced a "greater-than-peer downside risk" to its net interest margin and related measures if interest rates stayed elevated for longer, a risk that this quarter's modest two-basis-point margin improvement only partly addressed.

The results also landed against a backdrop of still-hot wholesale inflation that could keep the Federal Reserve cautious about further rate cuts. The Labor Department's producer price index report, released Thursday, showed the headline measure of prices paid to producers jumped 1.3 percent in September and was up 6.3 percent from a year earlier, with a core measure that excludes food, energy and trade services rising 5.0 percent annually — a sign that pricing pressure in the pipeline remains far from resolved, with direct implications for the deposit costs and loan spreads that determine bank margins.

What happens next

Truist did not issue numerical guidance for the fourth quarter in Friday's release, saying only that it remains confident in reaching its near- and long-term return targets, which call for return on tangible common equity in the mid-teens percentage range over the next several years. Truist's release did not specify a closing date for the LightStream sale to Carlyle, but completing it would continue the balance-sheet shrinkage that has already cut loans outstanding this year. Lyons and Chief Financial Officer Mike Maguire discussed the quarter on an 8 a.m. earnings call Friday, but the release itself leaves open the more consequential question for shareholders: when the one-time restructuring charges stop recurring and underlying revenue growth, rather than expense and balance-sheet cuts, becomes the primary driver of Truist's results. That answer may start to come into focus once the LightStream sale closes and the bank reports fourth-quarter results in January.