~~0000092230tfc:ClientRelatedAndOtherRiskManagementMemberus-gaap:~~0000092230us-gaap:InterestRateContractMemberus-gaap:~~NondesignatedMemberus-gaap:SwapMember2021-09-30~~CashFlowHedgingMemberus-gaap:LongTermDebtMemberus-gaap:InterestExpenseMember2021-01-012021-09-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the quarterly period ended: September 30, ~~2021~~2022

Commission File Number: 1-10853

~~_____________________________~~

TRUIST FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

~~_____________________________________________~~


North Carolina		56-0939887
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

214 North Tryon Street
Charlotte,	North Carolina	28202
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:		(336)	733-2000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $5 par value

TFC

New York Stock Exchange

Depositary Shares each representing 1/4,000th interest in a share of Series I Perpetual Preferred Stock

TFC.PI

New York Stock Exchange

5.853% Fixed-to-Floating Rate Normal Preferred Purchase Securities each representing 1/100th interest in a share of Series J Perpetual Preferred Stock

TFC.PJ

New York Stock Exchange

Depositary Shares each representing 1/1,000th interest in a share of Series O Non-Cumulative Perpetual Preferred Stock

TFC.PO

New York Stock Exchange

Depositary Shares each representing 1/1,000th interest in a share of Series R Non-Cumulative Perpetual Preferred Stock

TFC.PR

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At September 30, ~~2021, 1,334,891,526~~2022, 1,326,766,288 shares of the registrant’s common stock, $5 par value, were outstanding.

TABLE OF CONTENTS

TRUIST FINANCIAL CORPORATION

FORM 10-Q

September 30, ~~2021~~2022

Page No.

PART I - Financial Information

Glossary of Defined Terms

Forward-Looking Statements

Item 1.

Financial Statements

Consolidated Balance Sheets (Unaudited)

Consolidated Statements of Income (Unaudited)

Consolidated Statements of Comprehensive Income (Unaudited)

Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)

Consolidated Statements of Cash Flows (Unaudited)

Notes to Consolidated Financial Statements (Unaudited)

Note 1. Basis of Presentation

Note 2. Business Combinations

910

Note 3. Securities Financing Activities

Note 4. Investment Securities

1011

Note 5. Loans and ACL

1213

Note 6. Goodwill and Other Intangible Assets

1920

Note 7. Loan Servicing

2021

Note 8. Other Assets and Liabilities

2122

Note 9. Borrowings

2223

Note 10. Shareholders’ Equity

Note 11. AOCI

Note 12. Income Taxes

2524

Note 13. Benefit Plans

Note 14. Commitments and Contingencies

Note 15. Fair Value Disclosures

Note 16. Derivative Financial Instruments

3332

Note 17. Computation of EPS

3736

Note 18. Operating Segments

3736

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Regulatory Considerations

3938

Executive Overview

Analysis of Results of Operations

Analysis of Financial Condition

Risk Management

Liquidity

Capital

Share Repurchase activity

Critical Accounting Policies

Item 3.

Quantitative and Qualitative Disclosures About Market Risk (see Market Risk Management in MD&A)

6058

Item 4.

Controls and Procedures

7067

PART II - Other Information

Item 1.

Legal Proceedings

7067

Item 1A.

Risk Factors

7067

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

7067

Item 3.

Defaults Upon Senior Securities - (none)

Item 4.

Mine Safety Disclosures - (not applicable)

Item 5.

Other Information - (none to be reported)

Item 6.

Exhibits

7168

Glossary of Defined Terms

The following terms may be used throughout this report, including the consolidated financial statements and related notes.


Term			Definition
ACL			Allowance for credit losses
AFS			Available-for-sale
Agency MBS			Mortgage-backed securities issued by a U.S. government agency or GSE
ALLL			Allowance for loan and lease losses

ARRC			Alternative Reference Rates Committee of the FRB and the Federal Reserve Bank of New York
AOCI			Accumulated other comprehensive income (loss)

BB&T			BB&T Corporation and subsidiaries (changed to “Truist Financial Corporation” effective with the Merger)





Board			Truist’s Board of Directors


C&CB			Corporate and Commercial Banking, an operating segment
CARES Act			The Coronavirus Aid, Relief, and Economic Security Act
CB&W			Consumer Banking and Wealth, an operating segment
CCAR			Comprehensive Capital Analysis and Review

CDI			Core deposit intangible
CECL			Current expected credit loss model
CEO			Chief Executive Officer

CFO			Chief Financial Officer
CET1			Common equity tier 1

CFPB			Consumer Financial Protection Bureau

Company			Truist Financial Corporation and its subsidiaries (interchangeable with “Truist” below)~~, formerly BB&T Corporation~~
COVID-19			Coronavirus disease 2019
~~CRA~~			~~Community Reinvestment Act of 1977~~
CRE			Commercial real estate
CRO			Chief Risk Officer
CVA			Credit valuation adjustment


DIF			Deposit Insurance Fund administered by the FDIC

DTA			Deferred tax asset






EPS			Earnings per common share
~~EVE~~ESG			~~Economic value of equity~~Environmental, Social, and Governance


Exchange Act			Securities Exchange Act of 1934, as amended
FASB			Financial Accounting Standards Board
FDIC			Federal Deposit Insurance Corporation


FHLB			Federal Home Loan Bank
FHLMC			Federal Home Loan Mortgage Corporation

FNMA			Federal National Mortgage Association
FRB			Board of Governors of the Federal Reserve System
~~FTE~~			~~Full-time equivalent employee~~
GAAP			Accounting principles generally accepted in the United States of America
GDP			Gross Domestic Product


~~Grandbridge~~			~~Grandbridge Real Estate Capital, LLC~~
GSE			U.S. government-sponsored enterprise
HFI			Held for investment

HQLA			High-quality liquid assets
HTM
			Held-to-maturity

IH			Insurance Holdings, an operating segment
IPV			Independent price verification


ISDA			International Swaps and Derivatives Association, Inc.
LCR			Liquidity Coverage Ratio
LHFS			Loans held for sale
LIBOR			London Interbank Offered Rate
LOCOM			Lower of cost or market
Market Risk Rule			Market risk capital requirements issued jointly by the OCC, U.S. Treasury, FRB, and FDIC
MBS			Mortgage-backed securities
MD&A			Management’s Discussion and Analysis of Financial Condition and Results of Operations
Merger			Merger of BB&T and SunTrust effective December 6, 2019

MRM			Model Risk Management
MSR			Mortgage servicing right

NA			Not applicable


NIM			Net interest margin, computed on a TE basis
NM			Not meaningful
NPA			Nonperforming asset
NPL			Nonperforming loan
NSFR			Net stable funding ratio
NYSE			New York Stock Exchange
OAS			Option adjusted spread
OCC			Office of the Comptroller of the Currency

~~Truist Financial Corporation 1~~


~~Term~~			~~Definition~~
OCI			Other comprehensive income (loss)

OPEB			Other post-employment benefit
OREO			Other real estate owned
OT&C			Other, Treasury and Corporate


Parent Company			Truist Financial Corporation, the parent company of Truist Bank and other subsidiaries

Truist Financial Corporation 1


Term			Definition
PCD			Purchased credit deteriorated loans
~~PCI~~			~~Purchased credit impaired loans~~

PPP			Paycheck Protection Program, established by the CARES Act
~~Re-REMICs~~			~~Re-securitizations of Real Estate Mortgage Investment Conduits~~


ROU assets			Right-of-use assets


RUFC			Reserve for unfunded lending commitments
S&P			Standard & Poor’s
SBIC			Small Business Investment Company
SCB			Stress Capital Buffer
SEC			Securities and Exchange Commission
SOFR			Secured Overnight Financing Rate
SunTrust			SunTrust Banks, Inc.
Tailoring Rules			The final rules changing the applicability thresholds for regulatory capital and liquidity requirements, issued by the OCC, FRB, and FDIC, together with the final rules changing the applicability thresholds for enhanced prudential standards issued by the FRB
TCFD			Task Force on Climate-Related Financial Disclosures
TDR			Troubled debt restructuring
TE			Taxable-equivalent

TRS			Total Return Swap
Truist			Truist Financial Corporation and its subsidiaries (interchangeable with the “Company” above)~~, formerly BB&T Corporation~~
Truist Bank			Truist Bank, formerly Branch Banking and Trust Company
U.S.			United States of America
U.S. Treasury			United States Department of the Treasury
UPB			Unpaid principal balance
USAA			United Services Automobile Association

VaR			Value-at-risk

VIE			Variable interest entity

2 Truist Financial Corporation

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, regarding the financial condition, results of operations, business plans and the future performance of Truist. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “projects,” “may,” “will,” “should,” “would,” “could,” and other similar expressions are intended to identify these forward-looking statements.

Forward-looking statements are not based on historical facts but instead represent management’s expectations and assumptions regarding Truist’s business, the economy, and other future conditions. Such statements involve inherent uncertainties, risks, and changes in circumstances that are difficult to predict. As such, Truist’s actual results may differ materially from those contemplated by forward-looking statements. While there can be no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those contemplated by forward-looking statements include the following, without limitation, as well as the risks and uncertainties more fully discussed in Part I, Item 1A-Risk Factors in Truist’s Form 10-K for the year ended December 31, ~~2020:~~2021:

•residual risks and uncertainties relating to the Merger of heritage BB&T and heritage SunTrust, including the ability to ~~successfully integrate the companies or to~~ realize the anticipated benefits of the Merger;

•expenses relating to the Merger and ~~integration of heritage BB&T~~application and ~~heritage SunTrust;~~data center decommissioning;

•deposit attrition, client loss or revenue loss following completed mergers or acquisitions may be greater than anticipated;

•the COVID-19 pandemic disrupted the global economy and adversely impacted Truist’s financial condition and results of operations, including through increased expenses, reduced fee income and net interest margin, decreased demand for certain types of loans, and increases in the allowance for credit losses; ~~the~~a resurgence of the pandemic, ~~in recent months~~whether due to new variants of the coronavirus or other factors, could reintroduce or prolong these negative impacts and also adversely affect Truist’s capital and liquidity position or cost of capital, impair the ability of borrowers to repay outstanding loans, cause an outflow of deposits, and impair goodwill or other assets;

•Truist is subject to credit risk by lending or committing to lend money, and may have more credit risk and higher credit losses to the extent that loans are concentrated by loan type, industry segment, borrower type or location of the borrower or collateral;

•changes in the interest rate environment, including the replacement of LIBOR as an interest rate benchmark, ~~and potentially negative interest rates,~~ which could adversely affect Truist’s revenue and expenses, the value of assets and obligations, and the availability and cost of capital, cash flows, and liquidity;

•inability to access short-term funding or liquidity, loss of client deposits or changes in Truist’s credit ratings, which could increase the cost of funding or limit access to capital markets;

•risk management oversight functions may not identify or address risks adequately, and management may not be able to effectively manage credit risk;

•risks resulting from the extensive use of models in Truist’s business, which may impact decisions made by management and regulators;

•failure to execute on strategic or operational plans, including the ability to successfully complete or integrate mergers and acquisitions;

•increased competition, including from (i) new or existing competitors that could have greater financial resources or be subject to different regulatory standards, and (ii) products and services offered by non-bank financial technology companies, may reduce Truist’s client base, cause Truist to lower prices for its products and services in order to maintain market share or otherwise adversely impact Truist’s businesses or results of operations;

•failure to maintain or enhance Truist’s competitive position with respect to new products, services and technology, whether it fails to anticipate client expectations or because its technological developments fail to perform as desired or do not achieve market acceptance or regulatory approval or for other reasons, may cause Truist to lose market share or incur additional expense;

•negative public opinion, which could damage Truist’s reputation;

•increased scrutiny regarding Truist’s consumer sales practices, training practices, incentive compensation design, and governance;

•regulatory matters, litigation or other legal actions, which may result in, among other things, costs, fines, penalties, restrictions on Truist’s business activities, reputational harm, negative publicity, or other adverse consequences;

•evolving legislative, accounting and regulatory standards, including with respect to climate, capital, and liquidity requirements, and results of regulatory examinations may adversely affect Truist’s financial condition and results of operations;

•the monetary and fiscal policies of the federal government and its agencies, including in response to rising inflation, could have a material adverse effect on the economy and Truist’s profitability;

•accounting policies and processes require management to make estimates about matters that are uncertain, including the potential write down to goodwill if there is an elongated period of decline in market value for Truist’s stock and adverse economic conditions are sustained over a period of time;

•general economic or business conditions, either globally, nationally or regionally, may be less favorable than expected, including as a result of supply chain disruptions, inflationary pressures and labor shortages, and instability in global geopolitical matters or volatility in financial markets could result in, among other things, slower deposit or asset growth, a deterioration in credit quality, or a reduced demand for credit, insurance, or other services;

•risks related to originating and selling mortgages, including repurchase and indemnity demands from purchasers related to representations and warranties on loans sold, which could result in an increase in the amount of losses for loan repurchases;

•risks relating to Truist’s role as a loan servicer, including an increase in the scope or costs of the services Truist is required to perform, without any corresponding increase in servicing fees or a breach of Truist’s obligations as servicer;

•Truist’s success depends on hiring and retaining key ~~personnel,~~teammates, and if these individuals leave or change roles without effective replacements, Truist’s operations and integration activities could be adversely impacted, which could be exacerbated in the increased work-from-home environment caused by the COVID-19 pandemic as ~~Truist continues to integrate the management teams of heritage BB&T and heritage SunTrust;~~job markets may be less constrained by physical geography;

•fraud or misconduct by internal or external parties, which Truist may not be able to prevent, detect, or mitigate;

•security risks, including denial of service attacks, hacking, social engineering attacks targeting Truist’s teammates and clients, malware intrusion, data corruption attempts, system breaches, ~~cyber attacks,~~cyber-attacks, which have increased in frequency with current geopolitical tensions, identity theft, ransomware attacks, and physical security risks, such as natural disasters, environmental conditions, and intentional acts of destruction, could result in the disclosure of confidential information, adversely affect Truist’s business or reputation or create significant legal or financial exposure; and

•widespread outages of operational, communication, or other systems, whether internal or provided by third parties, natural or other disasters (including acts of terrorism and pandemics), and the effects of climate change, including physical risks, such as more frequent and intense weather events, and risks related to the transition to a lower carbon economy, such as regulatory or technological changes or shifts in market dynamics or consumer preferences, could have an adverse effect on Truist’s financial condition and results of operations, lead to material disruption of Truist’s operations or the ability or willingness of clients to access Truist’s products and services.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Except to the extent required by applicable law or regulation, Truist undertakes no obligation to revise or update any forward-looking statements.

Truist Financial Corporation 3

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

TRUIST FINANCIAL CORPORATION AND SUBSIDIARIES


Unaudited (Dollars in millions, except per share data, shares in thousands)	Unaudited (Dollars in millions, except per share data, shares in thousands)	September 30, 2021		December 31, 2020		Unaudited (Dollars in millions, except per share data, shares in thousands)	Sep 30, 2022		Dec 31, 2021

Assets	Assets					Assets
Cash and due from banks	Cash and due from banks	$	4,656	$	5,029	Cash and due from banks	$	5,031	$	5,085
Interest-bearing deposits with banks	Interest-bearing deposits with banks	15,171		13,839		Interest-bearing deposits with banks	17,194		15,210
Securities borrowed or purchased under resale agreements		1,919		1,745
Securities borrowed or purchased under agreements to resell						Securities borrowed or purchased under agreements to resell	2,568		4,028
Trading assets at fair value	Trading assets at fair value	6,972		3,872		Trading assets at fair value	5,864		4,423
AFS securities at fair value	AFS securities at fair value	151,038		120,788		AFS securities at fair value	72,978		153,123

LHFS (including $4,799 and $4,955 at fair value, respectively)		5,133		6,059
Loans and leases		285,522		299,734
HTM securities ($48,975 and $1,495 at fair value, respectively)						HTM securities ($48,975 and $1,495 at fair value, respectively)	58,754		1,494
LHFS (including $1,868 and $3,544 at fair value, respectively)						LHFS (including $1,868 and $3,544 at fair value, respectively)	2,304		4,812
Loans and leases (including $19 and $23 at fair value, respectively)						Loans and leases (including $19 and $23 at fair value, respectively)	314,335		289,513
ALLL	ALLL	(4,702)		(5,835)		ALLL	(4,205)		(4,435)
Loans and leases, net of ALLL	Loans and leases, net of ALLL	280,820		293,899		Loans and leases, net of ALLL	310,130		285,078
Premises and equipment	Premises and equipment	3,719		3,870		Premises and equipment	3,585		3,700
Goodwill	Goodwill	24,891		24,447		Goodwill	26,810		26,098
CDI and other intangible assets	CDI and other intangible assets	2,930		2,984		CDI and other intangible assets	3,726		3,408
MSRs at fair value		2,584		2,023
Other assets (including $4,002 and $4,891 at fair value, respectively)		30,051		30,673
Loan servicing rights at fair value						Loan servicing rights at fair value	3,797		2,633
Other assets (including $2,027 and $3,436 at fair value, respectively)						Other assets (including $2,027 and $3,436 at fair value, respectively)	35,697		32,149
Total assets	Total assets	$	529,884	$	509,228	Total assets	$	548,438	$	541,241
Liabilities	Liabilities					Liabilities
Noninterest-bearing deposits	Noninterest-bearing deposits	$	143,595	$	127,629	Noninterest-bearing deposits	$	144,826	$	145,892
Interest-bearing deposits	Interest-bearing deposits	262,262		253,448		Interest-bearing deposits	271,166		270,596
Short-term borrowings (including $1,735 and $1,115 at fair value, respectively)		5,226		6,092
Short-term borrowings (including $1,905 and $1,731 at fair value, respectively)						Short-term borrowings (including $1,905 and $1,731 at fair value, respectively)	25,687		5,292
Long-term debt	Long-term debt	37,837		39,597		Long-term debt	31,172		35,913
Other liabilities (including $601 and $555 at fair value, respectively)		12,064		11,550
Other liabilities (including $3,407 and $586 at fair value, respectively)						Other liabilities (including $3,407 and $586 at fair value, respectively)	14,776		14,277
Total liabilities	Total liabilities	460,984		438,316		Total liabilities	487,627		471,970

Shareholders’ Equity	Shareholders’ Equity					Shareholders’ Equity
Preferred stock	Preferred stock	6,673		8,048		Preferred stock	6,673		6,673
Common stock, $5 par value	Common stock, $5 par value	6,674		6,745		Common stock, $5 par value	6,634		6,639
Additional paid-in capital	Additional paid-in capital	34,977		35,843		Additional paid-in capital	34,487		34,565
Retained earnings	Retained earnings	22,114		19,455		Retained earnings	25,344		22,998
AOCI, net of deferred income taxes	AOCI, net of deferred income taxes	(1,538)		716		AOCI, net of deferred income taxes	(12,350)		(1,604)
Noncontrolling interests	Noncontrolling interests	—		105		Noncontrolling interests	23		—
Total shareholders’ equity	Total shareholders’ equity	68,900		70,912		Total shareholders’ equity	60,811		69,271
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	529,884	$	509,228	Total liabilities and shareholders’ equity	$	548,438	$	541,241
Common shares outstanding	Common shares outstanding	1,334,892		1,348,961		Common shares outstanding	1,326,766		1,327,818
Common shares authorized	Common shares authorized	2,000,000		2,000,000		Common shares authorized	2,000,000		2,000,000
Preferred shares outstanding	Preferred shares outstanding	223		280		Preferred shares outstanding	223		223
Preferred shares authorized	Preferred shares authorized	5,000		5,000		Preferred shares authorized	5,000		5,000

The accompanying notes are an integral part of these consolidated financial statements.

4 Truist Financial Corporation

CONSOLIDATED STATEMENTS OF INCOME

TRUIST FINANCIAL CORPORATION AND SUBSIDIARIES
Unaudited
(Dollars in millions, except per share data, shares in thousands) Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Interest Income
Interest and fees on loans and leases $ 2,825 $ 3,174 $ 8,728 $ 10,327
Interest on securities 548 393 1,488 1,331
Interest on other earning assets 53 56 147 279
Total interest income 3,426 3,623 10,363 11,937
Interest Expense
Interest on deposits 33 96 116 718
Interest on long-term debt 151 152 446 635
Interest on other borrowings 9 13 38 124
Total interest expense 193 261 600 1,477
Net Interest Income 3,233 3,362 9,763 10,460
Provision for credit losses (324) 421 (710) 2,158
Net Interest Income After Provision for Credit Losses 3,557 2,941 10,473 8,302
Noninterest Income
Insurance income 645 518 1,961 1,648
Wealth management income 356 324 1,042 945
Service charges on deposits 276 247 787 754
Residential mortgage income 179 221 396 807
Investment banking and trading income 301 244 958 636
Card and payment related fees 225 200 650 558
Lending related fees 74 77 268 210
Operating lease income 57 72 191 232
Commercial real estate related income 78 55 259 148
Income from bank-owned life insurance 43 46 139 135
Securities gains (losses) — 104 — 402
Other income 131 102 316 119
Total noninterest income 2,365 2,210 6,967 6,594
Noninterest Expense
Personnel expense 2,187 2,058 6,536 6,038
Professional fees and outside processing 372 323 1,063 859
Net occupancy expense 187 233 578 697
Software expense 251 221 707 647
Amortization of intangibles 145 170 431 513
Equipment expense 154 127 389 363
Marketing and customer development 94 75 226 215
Operating lease depreciation 47 56 144 204
Loan-related expense 52 59 161 177
Regulatory costs 43 34 99 93
Merger-related and restructuring charges 172 236 610 552
Loss (gain) on early extinguishment of debt — — (3) 235
Other expense 91 163 475 471
Total noninterest expense 3,795 3,755 11,416 11,064
Earnings
Income before income taxes 2,127 1,396 6,024 3,832
Provision for income taxes 423 255 1,189 670
Net income 1,704 1,141 4,835 3,162
Noncontrolling interests — 3 (3) 9
Net income available to the bank holding company 1,704 1,138 4,838 3,153
Preferred stock dividends and other 88 70 329 197
Net income available to common shareholders $ 1,616 $ 1,068 $ 4,509 $ 2,956
Basic EPS $ 1.21 $ 0.79 $ 3.37 $ 2.20
Diluted EPS 1.20 0.79 3.34 2.18
Basic weighted average shares outstanding 1,334,825 1,347,916 1,339,558 1,346,605
Diluted weighted average shares outstanding 1,346,854 1,358,122 1,351,712 1,357,174



Unaudited (Dollars in millions, except per share data, shares in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Interest Income
Interest and fees on loans and leases	$	3,490	$	2,825	$	9,032	$	8,728
Interest on securities	709		548		2,024		1,488
Interest on other earning assets	170		53		343		147
Total interest income	4,369		3,426		11,399		10,363
Interest Expense
Interest on deposits	331		33		462		116
Interest on long-term debt	190		151		459		446
Interest on other borrowings	103		9		143		38
Total interest expense	624		193		1,064		600
Net Interest Income	3,745		3,233		10,335		9,763
Provision for credit losses	234		(324)		310		(710)
Net Interest Income After Provision for Credit Losses	3,511		3,557		10,025		10,473
Noninterest Income
Insurance income	725		645		2,277		1,961
Investment banking and trading income	222		316		738		1,064
Wealth management income	334		356		1,014		1,042
Service charges on deposits	263		276		769		787
Card and payment related fees	241		225		699		650
Residential mortgage income	72		179		235		396
Lending related fees	80		74		265		268
Operating lease income	66		57		190		191
Commercial mortgage income	50		54		108		134
Income from bank-owned life insurance	49		43		150		139
Securities gains (losses)	(1)		—		(71)		—
Other income	1		140		118		335
Total noninterest income	2,102		2,365		6,492		6,967
Noninterest Expense
Personnel expense	2,116		2,187		6,269		6,536
Professional fees and outside processing	352		372		1,064		1,063
Software expense	225		251		691		707
Net occupancy expense	176		187		565		578
Amortization of intangibles	140		145		420		431
Equipment expense	122		154		354		389
Marketing and customer development	105		94		282		226
Operating lease depreciation	45		47		140		144
Loan-related expense	46		52		137		161
Regulatory costs	52		43		131		99
Merger-related and restructuring charges	62		172		399		610
Loss (gain) on early extinguishment of debt	—		—		(39)		(3)
Other expense	172		91		454		475
Total noninterest expense	3,613		3,795		10,867		11,416
Earnings
Income before income taxes	2,000		2,127		5,650		6,024
Provision for income taxes	363		423		1,065		1,189
Net income	1,637		1,704		4,585		4,835
Noncontrolling interests	4		—		6		(3)
Net income available to the bank holding company	1,633		1,704		4,579		4,838
Preferred stock dividends and other	97		88		262		329
Net income available to common shareholders	$	1,536	$	1,616	$	4,317	$	4,509
Basic EPS	$	1.16	$	1.21	$	3.25	$	3.37
Diluted EPS	1.15		1.20		3.22		3.34
Basic weighted average shares outstanding	1,326,539		1,334,825		1,328,569		1,339,558
Diluted weighted average shares outstanding	1,336,659		1,346,854		1,339,071		1,351,712

The accompanying notes are an integral part of these consolidated financial statements.

Truist Financial Corporation 5

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

TRUIST FINANCIAL CORPORATION AND SUBSIDIARIES


Unaudited (Dollars in millions)	Unaudited (Dollars in millions)	Three Months Ended September 30,				Nine Months Ended September 30,				Unaudited (Dollars in millions)	Three Months Ended September 30,						Nine Months Ended September 30,
		2021		2020		2021		2020				Unaudited (Dollars in millions)	2022				2021				2022				2021

Net income	Net income	$	1,704	$	1,141	$	4,835	$	3,162				Net income		$	1,637			$	1,704			$	4,585			$	4,835
OCI, net of tax:	OCI, net of tax:											OCI, net of tax:
Net change in net pension and postretirement costs	Net change in net pension and postretirement costs	(55)		(11)		(22)		18				Net change in net pension and postretirement costs	6				(55)				19				(22)
Net change in cash flow hedges	Net change in cash flow hedges	5		8		51		30				Net change in cash flow hedges	(139)				5				(85)				51
Net change in AFS securities	Net change in AFS securities	(438)		(375)		(2,283)		1,267				Net change in AFS securities	(3,051)				(438)				(10,889)				(2,283)
Net change in HTM securities												Net change in HTM securities	80				—				216				—
Other, net	Other, net	(2)		1		—		(1)				Other, net	(6)				(2)				(7)				—
Total OCI, net of tax	Total OCI, net of tax	(490)		(377)		(2,254)		1,314				Total OCI, net of tax	(3,110)				(490)				(10,746)				(2,254)
Total comprehensive income	Total comprehensive income	$	1,214	$	764	$	2,581	$	4,476			Total comprehensive income	$	(1,473)			$	1,214			$	(6,161)			$	2,581
Income Tax Effect of Items Included in OCI:	Income Tax Effect of Items Included in OCI:											Income Tax Effect of Items Included in OCI:
Net change in net pension and postretirement costs	Net change in net pension and postretirement costs	$	(13)	$	(4)	$	(3)	$	5			Net change in net pension and postretirement costs	$	1			$	(13)			$	6			$	(3)
Net change in cash flow hedges	Net change in cash flow hedges	2		2		16		9				Net change in cash flow hedges	(42)				2				(26)				16
Net change in AFS securities	Net change in AFS securities	(133)		(114)		(701)		389				Net change in AFS securities	(927)				(133)				(3,307)				(701)
Net change in HTM securities												Net change in HTM securities	25				—				65				—

Total income taxes related to OCI	Total income taxes related to OCI	$	(144)	$	(116)	$	(688)	$	403			Total income taxes related to OCI	$	(943)			$	(144)			$	(3,262)			$	(688)

The accompanying notes are an integral part of these consolidated financial statements.

6 Truist Financial Corporation

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

TRUIST FINANCIAL CORPORATION AND SUBSIDIARIES


Unaudited (Dollars in millions, shares in thousands)	Unaudited (Dollars in millions, shares in thousands)	Shares of Common Stock	Preferred Stock		Common Stock		Additional Paid-In Capital		Retained Earnings		AOCI		Noncontrolling Interests		Total Shareholders’ Equity		Unaudited (Dollars in millions, shares in thousands)	Shares of Common Stock	Preferred Stock		Common Stock		Additional Paid-In Capital		Retained Earnings		AOCI		Noncontrolling Interests		Total Shareholders’ Equity
Balance, July 1, 2020		1,347,609	$	7,143	$	6,738	$	35,676	$	18,373	$	847	$	106	$	68,883
Net income		—	—		—		—		1,138		—		3		1,141
OCI		—	—		—		—		—		(377)		—		(377)

Issued in connection with equity awards, net		509	—		3		(6)		—		—		—		(3)
Issued in connection with preferred stock offerings		—	905		—		—		—		—		—		905

Cash dividends declared on common stock		—	—		—		—		(607)		—		—		(607)
Cash dividends declared on preferred stock		—	—		—		—		(70)		—		—		(70)
Equity-based compensation expense		—	—		—		104		—		—		—		104

Other, net		—	—		—		—		—		—		(3)		(3)
Balance, September 30, 2020		1,348,118	$	8,048	$	6,741	$	35,774	$	18,834	$	470	$	106	$	69,973
Balance, July 1, 2021	Balance, July 1, 2021	1,334,770	$	6,673	$	6,674	$	34,898	$	21,139	$	(1,048)	$	—	$	68,336	Balance, July 1, 2021	1,334,770	$	6,673	$	6,674	$	34,898	$	21,139	$	(1,048)	$	—	$	68,336
Net income	Net income	—	—		—		—		1,704		—		—		1,704		Net income	—	—		—		—		1,704		—		—		1,704
OCI	OCI	—	—		—		—		—		(490)		—		(490)		OCI	—	—		—		—		—		(490)		—		(490)

Issued in connection with equity awards, net	Issued in connection with equity awards, net	122	—		—		(4)		(1)		—		—		(5)		Issued in connection with equity awards, net	122	—		—		(4)		(1)		—		—		(5)

Cash dividends declared on common stock	Cash dividends declared on common stock	—	—		—		—		(640)		—		—		(640)		Cash dividends declared on common stock	—	—		—		—		(640)		—		—		(640)
Cash dividends declared on preferred stock	Cash dividends declared on preferred stock	—	—		—		—		(88)		—		—		(88)		Cash dividends declared on preferred stock	—	—		—		—		(88)		—		—		(88)
Equity-based compensation expense	Equity-based compensation expense	—	—		—		83		—		—		—		83		Equity-based compensation expense	—	—		—		83		—		—		—		83

Balance, September 30, 2021	Balance, September 30, 2021	1,334,892	$	6,673	$	6,674	$	34,977	$	22,114	$	(1,538)	$	—	$	68,900	Balance, September 30, 2021	1,334,892	$	6,673	$	6,674	$	34,977	$	22,114	$	(1,538)	$	—	$	68,900
Balance, July 1, 2022																	Balance, July 1, 2022	1,326,393	$	6,673	$	6,632	$	34,410	$	24,500	$	(9,240)	$	24	$	62,999
Net income																	Net income	—	—		—		—		1,633		—		4		1,637
OCI																	OCI	—	—		—		—		—		(3,110)		—		(3,110)

Issued in connection with equity awards, net																	Issued in connection with equity awards, net	373	—		2		(5)		(1)		—		—		(4)

Cash dividends declared on common stock																	Cash dividends declared on common stock	—	—		—		—		(691)		—		—		(691)
Cash dividends declared on preferred stock																	Cash dividends declared on preferred stock	—	—		—		—		(97)		—		—		(97)
Equity-based compensation expense																	Equity-based compensation expense	—	—		—		82		—		—		—		82
Other, net																	Other, net	—	—		—		—		—		—		(5)		(5)
Balance, September 30, 2022																	Balance, September 30, 2022	1,326,766	$	6,673	$	6,634	$	34,487	$	25,344	$	(12,350)	$	23	$	60,811

Balance, January 1, 2020		1,342,166	$	5,102	$	6,711	$	35,609	$	19,806	$	(844)	$	174	$	66,558
Net income		—	—		—		—		3,153		—		9		3,162
OCI		—	—		—		—		—		1,314		—		1,314

Issued in connection with equity awards, net		5,952	—		30		(115)		(2)		—		—		(87)
Issued in connection with preferred stock offerings		—	3,449		—		—		—		—		—		3,449

Redemption of preferred stock		—	(503)		—		—		3		—		—		(500)
Cash dividends declared on common stock		—	—		—		—		(1,817)		—		—		(1,817)
Cash dividends declared on preferred stock		—	—		—		—		(200)		—		—		(200)
Equity-based compensation expense		—	—		—		280		—		—		—		280
Cumulative effect adjustment for new accounting standards		—	—		—		—		(2,109)		—		—		(2,109)
Other, net		—	—		—		—		—		—		(77)		(77)
Balance, September 30, 2020		1,348,118	$	8,048	$	6,741	$	35,774	$	18,834	$	470	$	106	$	69,973
Balance, January 1, 2021	Balance, January 1, 2021	1,348,961	$	8,048	$	6,745	$	35,843	$	19,455	$	716	$	105	$	70,912	Balance, January 1, 2021	1,348,961	$	8,048	$	6,745	$	35,843	$	19,455	$	716	$	105	$	70,912
Net income	Net income	—	—		—		—		4,838		—		(3)		4,835		Net income	—	—		—		—		4,838		—		(3)		4,835
OCI	OCI	—	—		—		—		—		(2,254)		—		(2,254)		OCI	—	—		—		—		—		(2,254)		—		(2,254)

Issued in connection with equity awards, net	Issued in connection with equity awards, net	5,719	—		28		(118)		(3)		—		—		(93)		Issued in connection with equity awards, net	5,719	—		28		(118)		(3)		—		—		(93)

Repurchase of common stock	Repurchase of common stock	(19,788)	—		(99)		(1,017)		—		—		—		(1,116)		Repurchase of common stock	(19,788)	—		(99)		(1,017)		—		—		—		(1,116)
Redemption of preferred stock	Redemption of preferred stock	—	(1,375)		—		—		(40)		—		—		(1,415)		Redemption of preferred stock	—	(1,375)		—		—		(40)		—		—		(1,415)
Cash dividends declared on common stock	Cash dividends declared on common stock	—	—		—		—		(1,847)		—		—		(1,847)		Cash dividends declared on common stock	—	—		—		—		(1,847)		—		—		(1,847)
Cash dividends declared on preferred stock	Cash dividends declared on preferred stock	—	—		—		—		(289)		—		—		(289)		Cash dividends declared on preferred stock	—	—		—		—		(289)		—		—		(289)
Equity-based compensation expense	Equity-based compensation expense	—	—		—		269		—		—		—		269		Equity-based compensation expense	—	—		—		269		—		—		—		269

Other, net	Other, net	—	—		—		—		—		—		(102)		(102)		Other, net	—	—		—		—		—		—		(102)		(102)
Balance, September 30, 2021	Balance, September 30, 2021	1,334,892	$	6,673	$	6,674	$	34,977	$	22,114	$	(1,538)	$	—	$	68,900	Balance, September 30, 2021	1,334,892	$	6,673	$	6,674	$	34,977	$	22,114	$	(1,538)	$	—	$	68,900
Balance, January 1, 2022																	Balance, January 1, 2022	1,327,818	$	6,673	$	6,639	$	34,565	$	22,998	$	(1,604)	$	—	$	69,271
Net income																	Net income	—	—		—		—		4,579		—		6		4,585
OCI																	OCI	—	—		—		—		—		(10,746)		—		(10,746)

Issued in connection with equity awards, net																	Issued in connection with equity awards, net	4,056	—		21		(112)		(4)		—		—		(95)

Repurchase of common stock																	Repurchase of common stock	(5,108)	—		(26)		(224)		—		—		—		(250)

Cash dividends declared on common stock																	Cash dividends declared on common stock	—	—		—		—		(1,967)		—		—		(1,967)
Cash dividends declared on preferred stock																	Cash dividends declared on preferred stock	—	—		—		—		(262)		—		—		(262)
Equity-based compensation expense																	Equity-based compensation expense	—	—		—		258		—		—		—		258

Other, net																	Other, net	—	—		—		—		—		—		17		17
Balance, September 30, 2022																	Balance, September 30, 2022	1,326,766	$	6,673	$	6,634	$	34,487	$	25,344	$	(12,350)	$	23	$	60,811

The accompanying notes are an integral part of these consolidated financial statements.

Truist Financial Corporation 7

CONSOLIDATED STATEMENTS OF CASH FLOWS

TRUIST FINANCIAL CORPORATION AND SUBSIDIARIES


Unaudited Nine Months Ended September 30, (Dollars in millions)		2021		2020
Unaudited (Dollars in millions)						Unaudited (Dollars in millions)	Nine Months Ended September 30,
							2022		2021
Cash Flows From Operating Activities:	Cash Flows From Operating Activities:					Cash Flows From Operating Activities:
Net income	Net income	$	4,835	$	3,162	Net income	$	4,585	$	4,835
Adjustments to reconcile net income to net cash from operating activities:	Adjustments to reconcile net income to net cash from operating activities:					Adjustments to reconcile net income to net cash from operating activities:
Provision for credit losses	Provision for credit losses	(710)		2,158		Provision for credit losses	310		(710)

Depreciation	Depreciation	610		694		Depreciation	581		610

Amortization of intangibles	Amortization of intangibles	431		513		Amortization of intangibles	420		431
Equity-based compensation expense		269		280

Securities (gains) losses	Securities (gains) losses	—		(402)		Securities (gains) losses	71		—
Net change in operating assets and liabilities:	Net change in operating assets and liabilities:					Net change in operating assets and liabilities:
LHFS	LHFS	156		1,144		LHFS	1,676		156
MSRs		(206)		639
Loan servicing rights						Loan servicing rights	(850)		(206)
Pension asset	Pension asset	(456)		(417)		Pension asset	(526)		(456)
Derivative assets and liabilities	Derivative assets and liabilities	905		(3,064)		Derivative assets and liabilities	3,850		905
Trading assets	Trading assets	(3,100)		1,063		Trading assets	(1,441)		(3,100)
Other assets and other liabilities	Other assets and other liabilities	896		(299)		Other assets and other liabilities	(247)		896

Other, net	Other, net	(545)		(442)		Other, net	(882)		(276)
Net cash from operating activities	Net cash from operating activities	3,085		5,029		Net cash from operating activities	7,547		3,085
Cash Flows From Investing Activities:	Cash Flows From Investing Activities:					Cash Flows From Investing Activities:
Proceeds from sales of AFS securities	Proceeds from sales of AFS securities	137		5,219		Proceeds from sales of AFS securities	3,311		137
Proceeds from maturities, calls and paydowns of AFS securities	Proceeds from maturities, calls and paydowns of AFS securities	25,424		14,917		Proceeds from maturities, calls and paydowns of AFS securities	10,619		25,424
Purchases of AFS securities	Purchases of AFS securities	(59,578)		(28,242)		Purchases of AFS securities	(9,025)		(59,578)

Proceeds from maturities, calls and paydowns of HTM securities						Proceeds from maturities, calls and paydowns of HTM securities	4,006		—
Purchases of HTM securities						Purchases of HTM securities	(3,020)		—
Originations and purchases of loans and leases, net of sales and principal collected	Originations and purchases of loans and leases, net of sales and principal collected	14,503		(4,328)		Originations and purchases of loans and leases, net of sales and principal collected	(24,135)		14,503
Net cash received (paid) for FHLB stock	Net cash received (paid) for FHLB stock	116		599		Net cash received (paid) for FHLB stock	(609)		116
Net cash received (paid) for securities borrowed or purchased under agreements to resell						Net cash received (paid) for securities borrowed or purchased under agreements to resell	1,460		(174)

Net cash paid for premises and equipment		(314)		(716)
Net cash received (paid) for mergers, acquisitions and divestitures		390		(1,811)
Net cash received (paid) for asset acquisitions, business combinations, and divestitures						Net cash received (paid) for asset acquisitions, business combinations, and divestitures	(1,325)		390

Other, net	Other, net	(600)		275		Other, net	(491)		(740)
Net cash from investing activities	Net cash from investing activities	(19,922)		(14,087)		Net cash from investing activities	(19,209)		(19,922)
Cash Flows From Financing Activities:	Cash Flows From Financing Activities:					Cash Flows From Financing Activities:
Net change in deposits	Net change in deposits	24,790		38,263		Net change in deposits	(490)		24,790
Net change in short-term borrowings	Net change in short-term borrowings	(866)		(11,972)		Net change in short-term borrowings	20,395		(866)
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	4,626		26,570		Proceeds from issuance of long-term debt	3,461		4,626
Repayment of long-term debt	Repayment of long-term debt	(5,873)		(27,667)		Repayment of long-term debt	(6,991)		(5,873)
Repurchase of common stock	Repurchase of common stock	(1,116)		—		Repurchase of common stock	(250)		(1,116)
Net proceeds from preferred stock issued		—		3,449

Redemption of preferred stock	Redemption of preferred stock	(1,415)		(500)		Redemption of preferred stock	—		(1,415)
Cash dividends paid on common stock	Cash dividends paid on common stock	(1,847)		(1,817)		Cash dividends paid on common stock	(1,967)		(1,847)
Cash dividends paid on preferred stock	Cash dividends paid on preferred stock	(289)		(200)		Cash dividends paid on preferred stock	(262)		(289)
Net cash received (paid) for hedge unwinds	Net cash received (paid) for hedge unwinds	—		1,111		Net cash received (paid) for hedge unwinds	(198)		—
Other, net	Other, net	(214)		(136)		Other, net	(106)		(214)
Net cash from financing activities	Net cash from financing activities	17,796		27,101		Net cash from financing activities	13,592		17,796
Net Change in Cash and Cash Equivalents	Net Change in Cash and Cash Equivalents	959		18,043		Net Change in Cash and Cash Equivalents	1,930		959
Cash and Cash Equivalents, January 1	Cash and Cash Equivalents, January 1	18,868		19,065		Cash and Cash Equivalents, January 1	20,295		18,868
Cash and Cash Equivalents, September 30	Cash and Cash Equivalents, September 30	$	19,827	$	37,108	Cash and Cash Equivalents, September 30	$	22,225	$	19,827
Supplemental Disclosure of Cash Flow Information:	Supplemental Disclosure of Cash Flow Information:					Supplemental Disclosure of Cash Flow Information:
Net cash paid (received) during the period for:	Net cash paid (received) during the period for:					Net cash paid (received) during the period for:
Interest expense	Interest expense	$	655	$	1,555	Interest expense	$	982	$	655
Income taxes	Income taxes	745		94		Income taxes	422		745

Noncash investing activities:						Noncash investing activities:

Transfer of AFS securities to HTM						Transfer of AFS securities to HTM	59,436		—

The accompanying notes are an integral part of these consolidated financial statements.

8 Truist Financial Corporation

NOTE 1. Basis of Presentation

General

See the Glossary of Defined Terms at the beginning of this Report for terms used herein. These consolidated financial statements and notes are presented in accordance with the instructions for Form 10-Q, and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations, and cash flow activity required in accordance with GAAP. In the opinion of management, all normal recurring adjustments necessary for a fair statement of the consolidated financial position and consolidated results of operations have been made. The year-end consolidated balance sheet data was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. The information contained in the financial statements and notes included in the Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 should be referred to in connection with these unaudited interim consolidated financial statements. There were no significant changes to the Company’s accounting policies from those disclosed in the Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 that could have a material effect on the Company’s financial statements.

Reclassifications

Certain amounts reported in prior periods’ consolidated financial statements have been reclassified to conform to the current presentation.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and ~~expenses.~~expenses during the reporting periods. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change include the determination of the ACL; determination of fair value for ~~financial instruments; valuation of MSRs; goodwill, intangible~~securities, MSRs, LHFS, trading loans, and derivative assets and liabilities; goodwill and other ~~purchase accounting related adjustments;~~intangible assets; income taxes; and pension and postretirement benefit ~~plan obligations and expenses; and tax assets, liabilities, and expense.~~obligations.

Changes in Accounting Principles and Effects of New Accounting Pronouncements


Standard / Adoption Date	Description	Effects on the Financial Statements



Standards Not Yet Adopted
Troubled Debt Restructurings and Vintage Disclosures January 1, 2023	Eliminates TDRs, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors made to borrowers experiencing financial difficulty. Additionally, requires disclosure of current-period gross write-offs by year of origination for financing receivables and net investment in leases.	Truist is actively engaged with its lines of business to establish reporting mechanisms consistent with the requirements of this standard. While implementation efforts are ongoing, the Company does not expect the implementation of this standard to have a material impact.
Fair Value Hedging – Portfolio Layer Method January 1, 2023	Introduces the portfolio layer method, which expands the current single-layer method to allow multiple hedged layers of a single closed portfolio. Additionally, expands the scope of the portfolio layer method to include non-prepayable assets, specifies eligible hedging instruments in a single-layer hedge, provides additional guidance on the accounting for and disclosure of hedge basis adjustments under the portfolio layer method, specifies how hedge basis adjustments should be considered when determining credit losses for the assets included in the closed portfolio.	Truist is continuing to evaluate the use of the portfolio layer method in its hedging programs, although future use of the standard is dependent on its asset-liability management strategies in the context of the then current interest rate outlook. Truist does not believe adoption of the standard will have a material impact on its active last-of-layer hedges.

There were no standards adopted during the current year that had a material effect on the Company’s financial statements, and no standards not yet adopted by the Company that are expected to have a material effect on the Company’s financial statements.

Truist Financial Corporation 9

NOTE 2. Business Combinations

On ~~July~~March 1, ~~2021,~~2022, Truist ~~acquired Constellation Affiliated Partners,~~expanded its presence in the title insurance market by acquiring Kensington Vanguard National Land Services, one of the nation’s largest independent full-service national title insurance agencies, which resulted in approximately ~~$543~~$199 million of goodwill and ~~$418~~$138 million of identifiable intangible assets in the IH segment. Fair value estimates related to the acquired assets and liabilities are subject to adjustment during the one-year measurement period following the closing of the acquisition. The intangible assets are being amortized ~~on an accelerated basis~~ over a term of ~~15.0~~15 years based upon the estimated duration of economic benefits received. Goodwill of ~~$456~~$131 million and identifiable intangible assets of ~~$277~~$110 million are deductible for tax purposes.

On ~~August 10, 2021,~~September 1, 2022, Truist ~~announced it will acquire Service Finance, LLC for $2.0 billion~~broadened the selection of products and services offered by its wholesale insurance broker by acquiring BenefitMall, one of the nation’s leading benefit wholesale general insurance agencies, which resulted in ~~cash consideration, which is expected to close~~approximately $510 million of goodwill and $336 million of identifiable intangible assets in the ~~fourth quarter~~IH segment. Fair value estimates related to the acquired assets and liabilities are subject to adjustment during the one-year measurement period following the closing of ~~2021.~~the acquisition. The intangible assets are being amortized over a term of 15 years based upon the estimated duration of economic benefits received. Identifiable intangible assets of $80 million and an immaterial amount of goodwill are deductible for tax purposes.

~~Truist Financial Corporation 9~~

NOTE 3. Securities Financing Activities

Securities purchased under ~~resale~~ agreements to resell are primarily collateralized by U.S. government or agency securities and are carried at the amounts at which the securities will be subsequently sold, plus accrued interest. Securities borrowed are primarily collateralized by corporate securities. The Company borrows securities and purchases securities under agreements to resell as part of its securities financing activities. On the acquisition date of these securities, the Company and the related counterparty agree on the amount of collateral required to secure the principal amount loaned under these arrangements. The Company monitors collateral values daily and calls for additional collateral to be provided as warranted under the respective agreements. ~~At September 30, 2021 and December 31, 2020, the total market value of collateral held was $1.9 billion and $1.7 billion, of which $188 million and $27 million was repledged, respectively.~~ The following table presents securities borrowed or purchased under ~~resale agreements:~~agreements to resell:


(Dollars in millions)	(Dollars in millions)	Sep 30, 2021		Dec 31, 2020		(Dollars in millions)	Sep 30, 2022		Dec 31, 2021
Securities purchased under agreements to resell						Securities purchased under agreements to resell	$	1,665	$	3,460
Securities borrowed						Securities borrowed	903		568
Total securities borrowed or purchased under agreements to resell						Total securities borrowed or purchased under agreements to resell	$	2,568	$	4,028

Securities purchased under resale agreements		$	1,302	$	1,158
Securities borrowed		617		587
Total securities borrowed or purchased under resale agreements		$	1,919	$	1,745
Fair value of collateral permitted to be resold or repledged						Fair value of collateral permitted to be resold or repledged	$	2,533	$	4,005
Fair value of securities resold or repledged						Fair value of securities resold or repledged	792		1,141

For securities sold under agreements to repurchase, the Company would be obligated to provide additional collateral in the event of a significant decline in fair value of the collateral pledged. This risk is managed by monitoring the liquidity and credit quality of the collateral, as well as the maturity profile of the transactions. Refer to “Note 14. Commitments and Contingencies” for additional information related to pledged securities. The following table presents the Company’s related activity, by collateral type and remaining contractual maturity:


		September 30, 2021				December 31, 2020						September 30, 2022						December 31, 2021
(Dollars in millions)	(Dollars in millions)	Overnight and Continuous		Up to 30 days		Total		Overnight and Continuous		Up to 30 days			Total		(Dollars in millions)	Overnight and Continuous		Up to 30 days		Total		Overnight and Continuous		Up to 30 days		Total

U.S. Treasury	U.S. Treasury	$	1,533	$	7	$	1,540	$	305	$	31		$	336	U.S. Treasury	$	873	$	10	$	883	$	749	$	409	$	1,158
State and Municipal															State and Municipal	244		—		244		—		—		—
GSE	GSE	98		32		130		45		9			54		GSE	46		6		52		53		25		78
Agency MBS - residential	Agency MBS - residential	473		173		646		442		6			448		Agency MBS - residential	593		70		663		720		141		861
Corporate and other debt securities	Corporate and other debt securities	172		112		284		204		179			383		Corporate and other debt securities	142		209		351		213		125		338
Total securities sold under agreements to repurchase	Total securities sold under agreements to repurchase	$	2,276	$	324	$	2,600	$	996	$	225		$	1,221	Total securities sold under agreements to repurchase	$	1,898	$	295	$	2,193	$	1,735	$	700	$	2,435

There were no securities financing transactions subject to legally enforceable master netting arrangements that were eligible for balance sheet netting for the periods presented.

10 Truist Financial Corporation

NOTE 4. Investment Securities

The following tables summarize the Company’s AFS and HTM securities:


September 30, 2021 (Dollars in millions)		Amortized Cost			Gross Unrealized					Fair Value
				Gains			Losses
September 30, 2022 (Dollars in millions)												September 30, 2022 (Dollars in millions)	Amortized Cost				Gross Unrealized							Fair Value
																Gains				Losses
AFS securities:	AFS securities:															AFS securities:
U.S. Treasury	U.S. Treasury	$	9,700		$	18		$	21	$	9,697	U.S. Treasury		$	10,909			$	—			$	855			$	10,054
GSE	GSE	1,829			47			2		1,874		GSE	322				—				35				287
Agency MBS - residential	Agency MBS - residential	133,933			954			1,826		133,061		Agency MBS - residential	66,825				1				10,232			56,594
Agency MBS - commercial	Agency MBS - commercial	3,083			30			40		3,073		Agency MBS - commercial	2,907				—				421			2,486
States and political subdivisions	States and political subdivisions	422			38			2		458		States and political subdivisions	426				8				38			396
Non-agency MBS	Non-agency MBS	2,856			1			11		2,846		Non-agency MBS	3,983				—				845			3,138
Other	Other	29			—			—		29		Other	23				—				—			23
Total AFS securities	Total AFS securities	$	151,852		$	1,088		$	1,902	$	151,038	Total AFS securities	$	85,395			$	9			$	12,426		$	72,978
HTM securities:												HTM securities:

Agency MBS - residential												Agency MBS - residential	$	58,754			$	—			$	9,779		$	48,975

December 31, 2020 (Dollars in millions)		Amortized Cost			Gross Unrealized					Fair Value
				Gains			Losses
December 31, 2021 (Dollars in millions)												December 31, 2021 (Dollars in millions)	Amortized Cost				Gross Unrealized							Fair Value
																Gains				Losses
AFS securities:	AFS securities:															AFS securities:
U.S. Treasury	U.S. Treasury	$	1,721		$	25		$	—	$	1,746	U.S. Treasury		$	9,892			$	9			$	106			$	9,795
GSE	GSE	1,840			77			—		1,917		GSE	1,667				33				2				1,698
Agency MBS - residential	Agency MBS - residential	111,589			1,975			23		113,541		Agency MBS - residential	135,886				656				2,500			134,042
Agency MBS - commercial	Agency MBS - commercial	2,987			72			2		3,057		Agency MBS - commercial	2,928				18				64			2,882
States and political subdivisions	States and political subdivisions	447			47			1		493		States and political subdivisions	382				39				1			420

Non-agency MBS												Non-agency MBS	4,305				—				47			4,258
Other	Other	34			—			—		34		Other	28				—				—			28
Total AFS securities	Total AFS securities	$	118,618		$	2,196		$	26	$	120,788	Total AFS securities	$	155,088			$	755			$	2,720		$	153,123
HTM securities:												HTM securities:

Agency MBS - residential												Agency MBS - residential	$	1,494			$	1			$	—		$	1,495

10In 2022, Truist ~~Financial Corporation~~transferred $59.4 billion of AFS securities to HTM as the Company continues to execute upon its asset-liability management strategies. Management determined that it has both the positive intent and ability to hold these securities to maturity. On the date of transfer, the difference between the par value and the fair value of these securities, which was recorded as a loss in AOCI, resulted in a net discount of $3.7 billion, inclusive of $510 million of basis adjustment gains from terminated fair value hedges attributable to the transferred securities. The discount will be accreted and unrealized loss in AOCI will be amortized, offsetting within interest income over the remaining life of the securities using the interest method. There were no gains or losses recognized as a result of this transfer.

~~Certain~~The amortized cost and estimated fair value of certain MBS securities issued by FNMA and FHLMC that exceeded 10% of shareholders’ equity at September 30, 2021. The FNMA investments had total amortized cost and fair value of $42.1 billion and $41.7 billion, respectively. The FHLMC investments had total amortized cost and fair value of $44.8 billion and $44.2 billion, respectively.are shown in the table below:


	September 30, 2022
(Dollars in millions)	Amortized Cost		Fair Value
FNMA	$	43,028	$	36,065
FHLMC	43,545		36,239

Truist Financial Corporation 11

The amortized cost and estimated fair value of the securities portfolio by contractual maturity are shown in the following table. The expected life of MBS may be shorter than the contractual maturities because borrowers may have the right to prepay their obligations with or without penalties.


		Amortized Cost										Fair Value													Amortized Cost															Fair Value
September 30, 2021 (Dollars in millions)		Due in one year or less		Due after one year through five years		Due after five years through ten years		Due after ten years		Total		Due in one year or less		Due after one year through five years		Due after five years through ten years		Due after ten years		Total
September 30, 2022 (Dollars in millions)																						September 30, 2022 (Dollars in millions)		Due in one year or less			Due after one year through five years			Due after five years through ten years			Due after ten years			Total			Due in one year or less			Due after one year through five years			Due after five years through ten years			Due after ten years			Total
AFS securities:	AFS securities:																						AFS securities:
U.S. Treasury	U.S. Treasury	$	276	$	8,446	$	978	$	—	$	9,700	$	276	$	8,441	$	980	$	—	$	9,697		U.S. Treasury		$	1,085		$	8,912		$	883		$	29		$	10,909		$	1,067		$	8,196		$	766		$	25		$	10,054
GSE	GSE	432		1,237		—		160		1,829		437		1,274		—		163		1,874			GSE		—			4			14			304			322			—			4			13			270			287
Agency MBS - residential	Agency MBS - residential	—		1		317		133,615		133,933		—		1		327		132,733		133,061			Agency MBS - residential		—			8			543			66,274			66,825			—			7			507			56,080			56,594
Agency MBS - commercial	Agency MBS - commercial	—		1		23		3,059		3,083		—		1		23		3,049		3,073			Agency MBS - commercial		—			8			72			2,827			2,907			—			8			66			2,412			2,486
States and political subdivisions	States and political subdivisions	38		95		118		171		422		39		98		135		186		458			States and political subdivisions		3			74			160			189			426			3			71			156			166			396
Non-agency MBS	Non-agency MBS	—		—		—		2,856		2,856		—		—		—		2,846		2,846			Non-agency MBS		—			—			—			3,983			3,983			—			—			—			3,138			3,138
Other	Other	1		6		—		22		29		1		6		—		22		29			Other		5			1			—			17			23			5			1			—			17			23
Total AFS securities	Total AFS securities	$	747	$	9,786	$	1,436	$	139,883	$	151,852	$	753	$	9,821	$	1,465	$	138,999	$	151,038		Total AFS securities		$	1,093		$	9,007		$	1,672		$	73,623		$	85,395		$	1,075		$	8,287		$	1,508		$	62,108		$	72,978
HTM securities:																						HTM securities:

Agency MBS - residential																						Agency MBS - residential		$	—		$	—		$	—		$	58,754		$	58,754		$	—		$	—		$	—		$	48,975		$	48,975

The following tables present the fair values and gross unrealized losses of investments based on the length of time that individual securities have been in a continuous unrealized loss position:


		Less than 12 months				12 months or more				Total					Less than 12 months				12 months or more				Total
September 30, 2021 (Dollars in millions)		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
September 30, 2022 (Dollars in millions)														September 30, 2022 (Dollars in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
AFS securities:														AFS securities:
U.S. Treasury														U.S. Treasury	$	2,759	$	185	$	7,291	$	670	$	10,050	$	855
GSE														GSE	214		20		73		15		287		35
Agency MBS - residential														Agency MBS - residential	36,328		5,556		20,178		4,676		56,506		10,232
Agency MBS - commercial														Agency MBS - commercial	884		97		1,600		324		2,484		421
States and political subdivisions														States and political subdivisions	275		35		19		3		294		38
Non-agency MBS														Non-agency MBS	1,680		444		1,457		401		3,137		845
Other														Other	18		—		—		—		18		—
Total														Total	$	42,158	$	6,337	$	30,618	$	6,089	$	72,776	$	12,426
HTM securities:														HTM securities:

Agency MBS - residential														Agency MBS - residential	$	30,842	$	5,773	$	18,133	$	4,006	$	48,975	$	9,779

															Less than 12 months				12 months or more				Total
December 31, 2021 (Dollars in millions)														December 31, 2021 (Dollars in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

AFS securities:	AFS securities:													AFS securities:
U.S. Treasury	U.S. Treasury	$	6,247	$	21	$	—	$	—	$	6,247	$	21	U.S. Treasury	$	8,412	$	88	$	582	$	18	$	8,994	$	106
GSE	GSE	95		2		—		—		95		2		GSE	104		2		—		—		104		2
Agency MBS - residential	Agency MBS - residential	95,852		1,812		443		14		96,295		1,826		Agency MBS - residential	101,262		2,377		2,638		123		103,900		2,500
Agency MBS - commercial	Agency MBS - commercial	1,943		34		257		6		2,200		40		Agency MBS - commercial	1,749		50		413		14		2,162		64
States and political subdivisions	States and political subdivisions	24		1		22		1		46		2		States and political subdivisions	—		—		22		1		22		1
Non-agency MBS	Non-agency MBS	2,183		11		—		—		2,183		11		Non-agency MBS	4,258		47		—		—		4,258		47
Other	Other	22		—		—		—		22		—		Other	6		—		—		—		6		—
Total	Total	$	106,366	$	1,881	$	722	$	21	$	107,088	$	1,902	Total	$	115,791	$	2,564	$	3,655	$	156	$	119,446	$	2,720

		Less than 12 months				12 months or more				Total
December 31, 2020 (Dollars in millions)		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

AFS securities:
U.S. Treasury		$	17	$	—	$	—	$	—	$	17	$	—

Agency MBS - residential		4,028		21		203		2		4,231		23
Agency MBS - commercial		463		2		4		—		467		2
States and political subdivisions		20		—		32		1		52		1
Other		6		—		—		—		6		—
Total		$	4,534	$	23	$	239	$	3	$	4,773	$	26

At September 30, ~~2021~~2022 and December 31, ~~2020, 0~~2021, no ACL was established for AFS or HTM securities. Substantially all of the unrealized losses on the securities portfolio, including non-agency MBS, were the result of changes in market interest rates compared to the date the securities were acquired rather than the credit quality of the issuers or underlying loans. HTM debt securities consist of residential agency MBS. Accordingly, the Company does not expect to incur any credit losses on investment securities.

The following table presents gross securities gains and losses recognized in earnings:


(Dollars in millions)	(Dollars in millions)	Three Months Ended September 30,				Nine Months Ended September 30,				(Dollars in millions)	Three Months Ended September 30,							Nine Months Ended September 30,
		2021		2020		2021		2020				(Dollars in millions)		2022				2021				2022				2021

Gross realized gains	Gross realized gains	$	—	$	104	$	—	$	404				Gross realized gains			$	—			$	—			$	13			$	—
Gross realized losses	Gross realized losses	—		—		—		(2)				Gross realized losses		(1)				—				(84)				—

Securities gains (losses), net	Securities gains (losses), net	$	—	$	104	$	—	$	402			Securities gains (losses), net		$	(1)			$	—			$	(71)			$	—

12 Truist Financial Corporation 11

NOTE 5. Loans and ACL

The following tables present loans and leases HFI by aging category. Government guaranteed loans are not placed on ~~nonaccrual~~nonperforming status regardless of delinquency because collection of principal and interest is reasonably assured. The past due status of loans that received a deferral under the CARES Act is generally frozen during the deferral period. In certain limited circumstances, accommodation programs result in the delinquency status being reset to current.


		Accruing											Accruing
September 30, 2021 (Dollars in millions)		Current		30-89 Days Past Due		90 Days Or More Past Due		Nonperforming		Total
September 30, 2022 (Dollars in millions)												September 30, 2022 (Dollars in millions)	Current		30-89 Days Past Due		90 Days Or More Past Due (1)		Nonperforming		Total
Commercial:	Commercial:											Commercial:
Commercial and industrial	Commercial and industrial	$	128,448	$	131	$	2	$	411	$	128,992	Commercial and industrial	$	152,966	$	162	$	44	$	443	$	153,615
CRE	CRE	24,285		4		—		20		24,309		CRE	22,472		15		1		5		22,493
Commercial construction	Commercial construction	5,680		2		—		7		5,689		Commercial construction	5,565		3		—		—		5,568
Lease financing		4,767		4		16		12		4,799

Consumer:	Consumer:											Consumer:
Residential mortgage	Residential mortgage	45,038		495		852		306		46,691		Residential mortgage	53,934		534		834		227		55,529
Residential home equity and direct	Residential home equity and direct	24,988		81		7		146		25,222		Residential home equity and direct	25,357		122		12		166		25,657
Indirect auto	Indirect auto	26,189		560		2		172		26,923		Indirect auto	27,387		591		1		260		28,239
Indirect other	Indirect other	11,094		53		2		6		11,155		Indirect other	12,575		97		6		5		12,683
Student	Student	5,635		456		968		—		7,059		Student	4,624		381		775		—		5,780
Credit card	Credit card	4,623		37		23		—		4,683		Credit card	4,683		52		36		—		4,771

Total	Total	$	280,747	$	1,823	$	1,872	$	1,080	$	285,522	Total	$	309,563	$	1,957	$	1,709	$	1,106	$	314,335
(1)Includes government guaranteed loans of $808 million in the residential mortgage portfolio and $770 million in the student portfolio.												(1)Includes government guaranteed loans of $808 million in the residential mortgage portfolio and $770 million in the student portfolio.

		Accruing											Accruing
December 31, 2020 (Dollars in millions)		Current		30-89 Days Past Due		90 Days Or More Past Due		Nonperforming		Total
December 31, 2021 (Dollars in millions)												December 31, 2021 (Dollars in millions)	Current		30-89 Days Past Due		90 Days Or More Past Due (1)		Nonperforming		Total
Commercial:	Commercial:											Commercial:
Commercial and industrial	Commercial and industrial	$	137,726	$	83	$	13	$	532	$	138,354	Commercial and industrial	$	138,225	$	130	$	13	$	394	$	138,762
CRE	CRE	26,506		14		—		75		26,595		CRE	23,902		20		—		29		23,951
Commercial construction	Commercial construction	6,472		5		—		14		6,491		Commercial construction	4,962		2		—		7		4,971
Lease financing		5,206		6		—		28		5,240

Consumer:	Consumer:											Consumer:
Residential mortgage	Residential mortgage	45,333		782		841		316		47,272		Residential mortgage	46,033		514		1,009		296		47,852
Residential home equity and direct	Residential home equity and direct	25,751		98		10		205		26,064		Residential home equity and direct	24,809		107		9		141		25,066
Indirect auto	Indirect auto	25,498		495		2		155		26,150		Indirect auto	25,615		607		1		218		26,441
Indirect other	Indirect other	11,102		68		2		5		11,177		Indirect other	10,811		64		3		5		10,883
Student	Student	5,823		618		1,111		—		7,552		Student	5,357		555		868		—		6,780
Credit card	Credit card	4,759		51		29		—		4,839		Credit card	4,735		45		27		—		4,807

Total	Total	$	294,176	$	2,220	$	2,008	$	1,330	$	299,734	Total	$	284,449	$	2,044	$	1,930	$	1,090	$	289,513
(1)Includes government guaranteed loans of $978 million in the residential mortgage portfolio and $864 million in the student portfolio.												(1)Includes government guaranteed loans of $978 million in the residential mortgage portfolio and $864 million in the student portfolio.

12 Truist Financial Corporation 13

The following ~~table presents~~tables present the amortized cost basis of loans by origination year and credit quality indicator:
September 30, 2021
(Dollars in millions) Amortized Cost Basis by Origination Year Revolving Credit Loans Converted to Term Other (1)
2021 2020 2019 2018 2017 Prior Total
Commercial:
Commercial and industrial:
Pass $ 25,433 $ 17,587 $ 14,278 $ 9,315 $ 5,670 $ 10,042 $ 41,570 $ — $ (390) $ 123,505
Special mention 186 231 402 253 97 92 973 — — 2,234
Substandard 302 314 493 213 71 289 1,160 — — 2,842
Nonperforming 36 26 70 46 18 59 157 — (1) 411
Total 25,957 18,158 15,243 9,827 5,856 10,482 43,860 — (391) 128,992
CRE:
Pass 2,825 3,405 5,516 3,794 2,051 2,442 671 — (61) 20,643
Special mention 57 107 486 317 51 129 — — — 1,147
Substandard 305 310 633 551 402 298 — — — 2,499
Nonperforming 2 1 — 2 3 12 — — — 20
Total 3,189 3,823 6,635 4,664 2,507 2,881 671 — (61) 24,309
Commercial construction:
Pass 836 1,125 1,676 681 138 99 661 — 7 5,223
Special mention — 26 140 102 — — — — — 268
Substandard 6 6 40 74 65 — — — — 191
Nonperforming — 1 1 — 4 — — — 1 7
Total 842 1,158 1,857 857 207 99 661 — 8 5,689
Lease financing:
Pass 970 1,232 811 525 528 707 — — (62) 4,711
Special mention 1 — — — 3 2 — — — 6
Substandard — 1 29 2 2 36 — — — 70
Nonperforming — 2 3 4 — 2 — — 1 12
Total 971 1,235 843 531 533 747 — — (61) 4,799
Consumer:
Residential mortgage:
Performing 12,741 7,355 4,360 2,237 2,719 16,872 — — 101 46,385
Nonperforming — 3 22 27 22 232 — — — 306
Total 12,741 7,358 4,382 2,264 2,741 17,104 — — 101 46,691
Residential home equity and direct:
Performing 4,061 3,028 2,015 829 241 482 10,946 3,405 69 25,076
Nonperforming 1 3 4 2 1 7 50 78 — 146
Total 4,062 3,031 2,019 831 242 489 10,996 3,483 69 25,222
Indirect auto:
Performing 8,950 7,705 5,106 2,612 1,426 778 — — 174 26,751
Nonperforming 9 37 54 38 21 18 — — (5) 172
Total 8,959 7,742 5,160 2,650 1,447 796 — — 169 26,923
Indirect other:
Performing 3,747 3,083 1,901 1,086 527 779 — — 26 11,149
Nonperforming — 3 2 — — 1 — — — 6
Total 3,747 3,086 1,903 1,086 527 780 — — 26 11,155
Student — 22 94 79 66 6,765 — — 33 7,059
Credit card — — — — — — 4,653 30 — 4,683
Total $ 60,468 $ 45,613 $ 38,136 $ 22,789 $ 14,126 $ 40,143 $ 60,841 $ 3,513 $ (107) $ 285,522

~~Truist Financial Corporation 13~~

December 31, 2020
(Dollars in millions) Amortized Cost Basis by Origination Year Revolving Credit Loans Converted to Term Other (1)
2020 2019 2018 2017 2016 Prior Total
Commercial:
Commercial and industrial:
Pass $ 34,858 $ 18,881 $ 13,312 $ 7,713 $ 5,174 $ 8,888 $ 42,780 $ 231 $ (579) $ 131,258
Special mention 471 434 343 98 120 157 1,808 5 (1) 3,435
Substandard 461 445 339 121 144 256 1,353 12 (2) 3,129
Nonperforming 38 92 48 29 25 61 233 4 2 532
Total 35,828 19,852 14,042 7,961 5,463 9,362 46,174 252 (580) 138,354
CRE:
Pass 4,563 6,600 4,427 2,752 1,473 2,096 617 — (69) 22,459
Special mention 171 599 585 116 77 141 — — — 1,689
Substandard 410 776 438 281 182 280 5 — — 2,372
Nonperforming 1 15 1 9 6 43 — — — 75
Total 5,145 7,990 5,451 3,158 1,738 2,560 622 — (69) 26,595
Commercial construction:
Pass 1,052 2,141 1,889 232 27 110 534 — 2 5,987
Special mention — 108 64 1 — — 2 — — 175
Substandard 70 106 73 59 6 1 — — — 315
Nonperforming 1 3 — 7 — — — 3 — 14
Total 1,123 2,358 2,026 299 33 111 536 3 2 6,491
Lease financing:
Pass 1,377 1,139 775 746 241 760 — — 27 5,065
Special mention 1 39 20 5 — 7 — — — 72
Substandard — 34 3 4 3 31 — — — 75
Nonperforming 2 5 3 9 4 5 — — — 28
Total 1,380 1,217 801 764 248 803 — — 27 5,240
Consumer:
Residential mortgage:
Performing 8,197 6,729 3,735 4,374 5,424 18,333 — — 164 46,956
Nonperforming 3 13 16 13 14 257 — — — 316
Total 8,200 6,742 3,751 4,387 5,438 18,590 — — 164 47,272
Residential home equity and direct:
Performing 4,513 3,126 1,416 481 214 557 13,886 1,619 47 25,859
Nonperforming 1 4 2 1 1 7 87 101 1 205
Total 4,514 3,130 1,418 482 215 564 13,973 1,720 48 26,064
Indirect auto:
Performing 10,270 7,436 4,015 2,401 1,220 506 — — 147 25,995
Nonperforming 13 50 44 27 15 12 — — (6) 155
Total 10,283 7,486 4,059 2,428 1,235 518 — — 141 26,150
Indirect other:
Performing 4,433 3,019 1,706 826 431 718 — — 39 11,172
Nonperforming 1 1 1 — — 2 — — — 5
Total 4,434 3,020 1,707 826 431 720 — — 39 11,177
Student 22 110 95 81 64 7,185 — — (5) 7,552
Credit card — — — — — — 4,802 37 — 4,839
Total $ 70,929 $ 51,905 $ 33,350 $ 20,386 $ 14,865 $ 40,413 $ 66,107 $ 2,012 $ (233) $ 299,734

~~(1)Includes certain deferred fees and costs, unapplied payments, and other adjustments.~~


September 30, 2022 (Dollars in millions)	Amortized Cost Basis by Origination Year												Revolving Credit		Loans Converted to Term		Other (1)
	2022		2021		2020		2019		2018		Prior								Total
Commercial:
Commercial and industrial:
Pass	$	34,437	$	23,704	$	11,578	$	9,002	$	6,036	$	10,704	$	53,833	$	—	$	(158)	$	149,136
Special mention	133		289		217		127		62		45		455		—		—		1,328
Substandard	249		325		401		435		224		202		872		—		—		2,708
Nonperforming	47		66		5		44		49		34		198		—		—		443
Total	34,866		24,384		12,201		9,608		6,371		10,985		55,358		—		(158)		153,615
CRE:
Pass	4,634		3,711		2,386		4,094		2,444		2,598		719		—		(57)		20,529
Special mention	62		50		75		262		232		24		—		—		—		705
Substandard	110		110		104		452		316		162		—		—		—		1,254
Nonperforming	—		1		—		1		—		3		—		—		—		5
Total	4,806		3,872		2,565		4,809		2,992		2,787		719		—		(57)		22,493
Commercial construction:
Pass	1,104		1,352		989		360		281		78		1,100		—		(2)		5,262
Special mention	27		1		92		27		53		—		33		—		—		233
Substandard	26		2		21		3		21		—		—		—		—		73
Nonperforming	—		—		—		—		—		—		—		—		—		—
Total	1,157		1,355		1,102		390		355		78		1,133		—		(2)		5,568






Consumer:
Residential mortgage:

Current	11,946		17,500		6,270		3,140		1,406		13,672		—		—		—		53,934
30 - 89 days past due	59		38		29		35		36		337		—		—		—		534
90 days or more past due	4		14		60		67		100		589		—		—		—		834
Nonperforming	1		4		8		14		17		183		—		—		—		227
Total	12,010		17,556		6,367		3,256		1,559		14,781		—		—		—		55,529
Residential home equity and direct:

Current	4,464		3,476		1,682		969		362		342		10,310		3,755		(3)		25,357
30 - 89 days past due	14		13		7		7		3		2		53		23		—		122
90 days or more past due	—		—		—		—		—		—		10		2		—		12
Nonperforming	2		9		6		7		2		7		50		83		—		166
Total	4,480		3,498		1,695		983		367		351		10,423		3,863		(3)		25,657
Indirect auto:

Current	9,745		7,738		4,574		2,868		1,459		1,003		—		—		—		27,387
30 - 89 days past due	88		161		112		105		64		61		—		—		—		591
90 days or more past due	1		—		—		—		—		—		—		—		—		1
Nonperforming	20		68		53		57		35		27		—		—		—		260
Total	9,854		7,967		4,739		3,030		1,558		1,091		—		—		—		28,239
Indirect other:

Current	5,067		2,976		1,875		1,102		663		892		—		—		—		12,575
30 - 89 days past due	29		23		17		14		8		6		—		—		—		97
90 days or more past due	4		1		1		—		—		—		—		—		—		6
Nonperforming	—		—		2		1		—		2		—		—		—		5
Total	5,100		3,000		1,895		1,117		671		900		—		—		—		12,683
Student:
Current	—		—		17		73		59		4,451		—		—		24		4,624
30 - 89 days past due	—		—		—		1		1		379		—		—		0		381
90 days or more past due	—		—		—		1		1		773		—		—		0		775

Total	—		—		17		75		61		5,603		—		—		24		5,780
Credit card:
Current													4,666		17		—		4,683
30 - 89 days past due													50		2		—		52
90 days or more past due													35		1		—		36

Total	—		—		—		—		—		—		4,751		20		—		4,771
Total	$	72,273	$	61,632	$	30,581	$	23,268	$	13,934	$	36,576	$	72,384	$	3,883	$	(196)	$	314,335

14 Truist Financial Corporation

~~ACL~~


December 31, 2021 (Dollars in millions)	Amortized Cost Basis by Origination Year												Revolving Credit		Loans Converted to Term		Other (1)
	2021		2020		2019		2018		2017		Prior								Total
Commercial:
Commercial and industrial:
Pass	$	35,530	$	17,430	$	14,105	$	8,994	$	5,633	$	9,424	$	43,035	$	—	$	(169)	$	133,982
Special mention	195		221		326		317		46		70		691		—		—		1,866
Substandard	352		356		395		197		91		335		794		—		—		2,520
Nonperforming	50		19		49		42		16		34		184		—		—		394
Total	36,127		18,026		14,875		9,550		5,786		9,863		44,704		—		(169)		138,762
CRE:
Pass	4,836		2,946		5,109		3,201		1,774		2,131		762		—		(61)		20,698
Special mention	13		118		483		247		44		83		—		—		—		988
Substandard	321		264		523		528		321		279		—		—		—		2,236
Nonperforming	1		1		11		—		9		7		—		—		—		29
Total	5,171		3,329		6,126		3,976		2,148		2,500		762		—		(61)		23,951
Commercial construction:
Pass	1,113		1,179		1,259		419		44		95		558		—		12		4,679
Special mention	—		14		72		50		—		—		—		—		—		136
Substandard	7		13		45		67		17		—		—		—		—		149
Nonperforming	—		—		1		—		5		—		—		—		1		7
Total	1,120		1,206		1,377		536		66		95		558		—		13		4,971






Consumer:
Residential mortgage:

Current	17,271		6,798		3,642		1,753		2,237		14,240		—		—		92		46,033
30 - 89 days past due	58		31		32		40		31		322		—		—		—		514
90 or more days past due	3		44		91		133		95		643		—		—		—		1,009
Nonperforming	1		5		18		27		20		226		—		—		(1)		296
Total	17,333		6,878		3,783		1,953		2,383		15,431		—		—		91		47,852
Residential home equity and direct:

Current	4,962		2,630		1,717		691		189		425		10,757		3,388		50		24,809
30 - 89 days past due	8		8		10		3		1		3		53		21		—		107
90 days or more past due	—		—		—		—		—		—		5		4		—		9
Nonperforming	2		3		4		1		—		7		48		75		1		141
Total	4,972		2,641		1,731		695		190		435		10,863		3,488		51		25,066
Indirect auto:

Current	10,699		6,691		4,293		2,158		1,081		504		—		—		189		25,615
30 - 89 days past due	119		138		145		97		56		52		—		—		—		607
90 days or more past due	—		—		—		—		—		1		—		—		—		1
Nonperforming	28		48		61		41		21		19		—		—		—		218
Total	10,846		6,877		4,499		2,296		1,158		576		—		—		189		26,441
Indirect other:

Current	4,333		2,724		1,638		937		455		691		—		—		33		10,811
30 - 89 days past due	14		15		15		12		4		4		—		—		—		64
90 days or more past due	1		1		1		—		—		—		—		—		—		3
Nonperforming	1		1		1		—		—		2		—		—		—		5
Total	4,349		2,741		1,655		949		459		697		—		—		33		10,883
Student:
Current	—		21		88		73		61		5,122		—		—		(8)		5,357
30 - 89 days past due	—		—		1		1		1		552		—		—		—		555
90 days or more past due	—		—		—		—		1		867		—		—		—		868

Total	—		21		89		74		63		6,541		—		—		(8)		6,780
Credit card:
Current													4,711		24		—		4,735
30 - 89 days past due													43		2		—		45
90 days or more past due													26		1		—		27

Total	—		—		—		—		—		—		4,780		27		—		4,807
Total	$	79,918	$	41,719	$	34,135	$	20,029	$	12,253	$	36,138	$	61,667	$	3,515	$	139	$	289,513

(1)Includes certain deferred fees and costs and other adjustments.

~~The following tables present activity in the ACL:~~
(Dollars in millions) Balance at Jul 1, 2020 Charge-Offs Recoveries Provision (Benefit) Other (2) Balance at Sep 30, 2020
Commercial:
Commercial and industrial $ 2,137 $ (112) $ 20 $ 140 $ — $ 2,185
CRE 391 (44) — 155 — 502
Commercial construction 134 (19) 2 17 — 134
Lease financing 59 (44) 4 34 — 53
Consumer:
Residential mortgage 431 (4) 3 (6) — 424
Residential home equity and direct 697 (52) 16 43 — 704
Indirect auto 1,190 (72) 22 49 — 1,189
Indirect other 213 (8) 4 13 — 222
Student 123 (6) — 11 2 130
Credit card 327 (44) 8 29 — 320
ALLL 5,702 (405) 79 485 2 5,863
RUFC 431 — — (64) (1) 366
ACL $ 6,133 $ (405) $ 79 $ 421 $ 1 $ 6,229
(Dollars in millions) Balance at Jul 1, 2021 Charge-Offs Recoveries Provision (Benefit) Other (2) Balance at Sep 30, 2021
Commercial:
Commercial and industrial $ 1,757 $ (57) $ 21 $ (180) $ — $ 1,541
CRE 440 (1) 1 (70) — 370
Commercial construction 69 — 1 (11) — 59
Lease financing 47 — 21 (37) — 31
Consumer:
Residential mortgage 321 (7) 3 (6) — 311
Residential home equity and direct 694 (51) 20 (18) — 645
Indirect auto 1,116 (73) 22 6 — 1,071
Indirect other 181 (13) 5 21 — 194
Student 129 (6) 1 1 1 126
Credit card 367 (31) 9 9 — 354
ALLL 5,121 (239) 104 (285) 1 4,702
RUFC 315 — — (39) — 276
ACL $ 5,436 $ (239) $ 104 $ (324) $ 1 $ 4,978
(Dollars in millions) Balance at Jan 1, 2020 (1) Charge-Offs Recoveries Provision (Benefit) Other (2) Balance at Sep 30, 2020
Commercial:
Commercial and industrial $ 560 $ (274) $ 58 $ 937 $ 904 $ 2,185
CRE 150 (59) 4 325 82 502
Commercial construction 52 (22) 10 78 16 134
Lease financing 10 (50) 4 (5) 94 53
Consumer:
Residential mortgage 176 (50) 7 26 265 424
Residential home equity and direct 107 (185) 46 282 454 704
Indirect auto 304 (294) 63 298 818 1,189
Indirect other 60 (46) 18 40 150 222
Student — (20) 1 24 125 130
Credit card 122 (147) 22 148 175 320
PCI 8 — — — (8) —
ALLL 1,549 (1,147) 233 2,153 3,075 5,863
RUFC 340 — — 5 21 366
ACL $ 1,889 $ (1,147) $ 233 $ 2,158 $ 3,096 $ 6,229

Truist Financial Corporation 15

(Dollars in millions) Balance at Jan 1, 2021 Charge-Offs Recoveries Provision (Benefit) Other (2) Balance at Sep 30, 2021
Commercial:
Commercial and industrial $ 2,156 $ (181) $ 60 $ (494) $ — $ 1,541
CRE 573 (5) 6 (204) — 370
Commercial construction 81 (2) 3 (23) — 59
Lease financing 48 (8) 24 (33) — 31
Consumer:
Residential mortgage 368 (22) 10 (45) — 311
Residential home equity and direct 714 (163) 58 36 — 645
Indirect auto 1,198 (247) 71 49 — 1,071
Indirect other 208 (41) 18 9 — 194
Student 130 (12) 1 3 4 126
Credit card 359 (113) 28 80 — 354
ALLL 5,835 (794) 279 (622) 4 4,702
RUFC 364 — — (88) — 276
ACL $ 6,199 $ (794) $ 279 $ (710) $ 4 $ 4,978
ACL

The following tables present activity in the ACL:








(Dollars in millions)	Balance at Jul 1, 2021		Charge-Offs		Recoveries		Provision (Benefit)		Other (1)		Balance at Sep 30, 2021
Commercial:
Commercial and industrial	$	1,804	$	(57)	$	42	$	(217)	$	—	$	1,572
CRE	440		(1)		1		(70)		—		370
Commercial construction	69		—		1		(11)		—		59

Consumer:
Residential mortgage	321		(7)		3		(6)		—		311
Residential home equity and direct	694		(51)		20		(18)		—		645
Indirect auto	1,116		(73)		22		6		—		1,071
Indirect other	181		(13)		5		21		—		194
Student	129		(6)		1		1		1		126
Credit card	367		(31)		9		9		—		354

ALLL	5,121		(239)		104		(285)		1		4,702
RUFC	315		—		—		(39)		—		276
ACL	$	5,436	$	(239)	$	104	$	(324)	$	1	$	4,978

(Dollars in millions)	Balance at Jul 1, 2022		Charge-Offs		Recoveries		Provision (Benefit)		Other (1)		Balance at Sep 30, 2022
Commercial:
Commercial and industrial	$	1,357	$	(51)	$	43	$	(48)	$	—	$	1,301
CRE	237		—		—		(3)		—		234
Commercial construction	50		—		2		(5)		—		47

Consumer:
Residential mortgage	327		(4)		3		50		—		376
Residential home equity and direct	588		(86)		23		44		—		569
Indirect auto	952		(103)		21		96		—		966
Indirect other	228		(26)		6		61		—		269
Student	100		(7)		—		—		—		93
Credit card	348		(42)		8		36		—		350

ALLL	4,187		(319)		106		231		—		4,205
RUFC	247		—		—		3		—		250
ACL	$	4,434	$	(319)	$	106	$	234	$	—	$	4,455



















(Dollars in millions)	Balance at Jan 1, 2021		Charge-Offs		Recoveries		Provision (Benefit)		Other (1)		Balance at Sep 30, 2021
Commercial:
Commercial and industrial	$	2,204	$	(189)	$	84	$	(527)	$	—	$	1,572
CRE	573		(5)		6		(204)		—		370
Commercial construction	81		(2)		3		(23)		—		59

Consumer:
Residential mortgage	368		(22)		10		(45)		—		311
Residential home equity and direct	714		(163)		58		36		—		645
Indirect auto	1,198		(247)		71		49		—		1,071
Indirect other	208		(41)		18		9		—		194
Student	130		(12)		1		3		4		126
Credit card	359		(113)		28		80		—		354

ALLL	5,835		(794)		279		(622)		4		4,702
RUFC	364		—		—		(88)		—		276
ACL	$	6,199	$	(794)	$	279	$	(710)	$	4	$	4,978

16 Truist Financial Corporation


(Dollars in millions)	Balance at Jan 1, 2022		Charge-Offs		Recoveries		Provision (Benefit)		Other (1)		Balance at Sep 30, 2022
Commercial:
Commercial and industrial	$	1,426	$	(99)	$	73	$	(99)	$	—	$	1,301
CRE	350		(2)		7		(121)		—		234
Commercial construction	52		(1)		4		(8)		—		47

Consumer:
Residential mortgage	308		(8)		13		63		—		376
Residential home equity and direct	615		(229)		63		120		—		569
Indirect auto	1,022		(282)		70		156		—		966
Indirect other	195		(63)		18		119		—		269
Student	117		(17)		—		(7)		—		93
Credit card	350		(123)		26		97		—		350

ALLL	4,435		(824)		274		320		—		4,205
RUFC	260		—		—		(10)		—		250
ACL	$	4,695	$	(824)	$	274	$	310	$	—	$	4,455

(1)~~Balance is prior to the adoption of CECL.~~

~~(2)~~Includes the ~~adoption of CECL,~~amounts for the ALLL for PCD acquisitions, and other activity.

The commercial ALLL decreased ~~$312~~$62 million and ~~$857~~$246 million and the consumer ALLL increased $78 million and $16 million for the three and nine months ended September 30, ~~2021,~~2022, respectively. The ~~decreases~~decrease in the commercial ALLL primarily reflects continued strong commercial portfolio performance and loan growth concentrated in higher quality loans, partially offset by a moderately slower economic outlook. The increase in the consumer ALLL was primarily driven by loan growth, normalizing loss trends in certain consumer portfolios, and a moderately slower economic outlook. Considerations for ~~both~~ the ~~three and nine month periods are due to an improving~~moderately slower economic outlook include the potential impacts related to Hurricane Ian, and ~~lower loan balances.~~risks associated with inflation, rising rates, supply chain disruption, geopolitical events, and recession.

The ~~consumer ALLL decreased $94~~RUFC increased $3 million and ~~$271~~decreased $10 million for the three and nine months ended September 30, ~~2021,~~2022, respectively. The decrease for the three-month period reflects an improving economic outlook slightly offset by loan growth primarily in the residential mortgage portfolio. The decrease for the nine-month period reflects an improving economic outlook and lower loan balances primarily in the residential mortgage and home equity and direct portfolios.

~~The RUFC decreased $39 million and $88 million for the three and nine months ended September 30, 2021, respectively. The decreases reflect an improving economic outlook.~~

The quantitative models have been designed to estimate losses using macro-economic forecasts over a reasonable and supportable forecast period of two years, followed by a reversion to long-term historical loss conditions over a one-year period. ~~These macro-economic forecasts include a number~~Forecasts of ~~key economic~~macroeconomic variables ~~utilized~~used in loss forecasting ~~that~~ include, but are not limited to, unemployment trends, US real GDP, corporate credit spreads, rental rates, property values, the primary 30-year mortgage rate, home price indices, and used car prices.

The primary economic forecast incorporates a third-party baseline forecast that is adjusted to reflect Truist’s interest rate outlook. Management also considers optimistic and pessimistic third-party macro-economic forecasts in order to capture uncertainty in the economic environment. These forecasts, along with the primary economic forecast, are weighted 40% baseline, 30% optimistic, and 30% pessimistic in the September 30, ~~2021 ACL.~~2022 ACL, unchanged since December 31, 2021. While the scenario weightings were unchanged, each forecast scenario reflected a moderate deterioration in certain economic variables over the reasonable and supportable forecast period when compared to the prior period. The primary economic forecast shaping the ACL estimate at September 30, ~~2021~~2022 included GDP growth in the ~~high single~~low-single digits ~~through 2021, then slowing to the low single digits in 2022,~~ and an ~~improving~~ unemployment rate tostarting in the ~~mid single~~low-single digits ~~through~~with a slight increase towards mid-single digits by the end ~~of 2021 followed by continued improvement through the remainder~~ of the reasonable and supportable forecast period.

Quantitative models have certain limitations with respect to estimating expected losses, particularly in times of rapidly changing macro-economic conditions and forecasts. As a result, management believes that the qualitative component of the ACL, which incorporates management’s expert judgment related to expected future credit losses, will continue to be an important component of the ACL for the foreseeable future. The September 30, ~~2021~~2022 ACL estimate includes adjustments to ~~address~~consider the impact of current and expected events or risks not captured by the loss forecasting models, ~~including imprecision~~the outcomes of which are uncertain and may not be completely considered by quantitative models. Refer to “Note 1. Basis of Presentation” in ~~future economic forecasts, uncertainty around~~Truist’s Annual Report on Form 10-K for the ~~return of consumer and business confidence once stimulus ceases, and the impact of government relief programs and client accommodations on expected losses.~~year ended December 31, 2021 for additional information.

16 Truist Financial Corporation 17

~~PCD Loan Activity~~

For PCD loans, the initial estimate of expected credit losses is recognized in the ALLL on the date of acquisition using the same methodology as other loans held for investment. The following table provides a summary of purchased student loans with credit deterioration at acquisition:


Nine Months Ended September 30, 2021 (Dollars in millions)
~~Par value~~	$	~~286~~
~~ALLL at acquisition~~	~~(4)~~
~~Non-credit premium (discount)~~	1
~~Purchase price~~	$	~~283~~

NPAs

The following table provides a summary of nonperforming loans and leases, excluding ~~LHFS. Interest income recognized on nonperforming loans HFI was immaterial for the nine months ended September 30, 2021 and 2020, respectively.~~LHFS:


		September 30, 2021				December 31, 2020								September 30, 2022				December 31, 2021
		Recorded Investment				Recorded Investment								Recorded Investment				Recorded Investment
(Dollars in millions)	(Dollars in millions)	Without an ALLL		With an ALLL		Without an ALLL		With an ALLL		(Dollars in millions)	Without an ALLL	With an ALLL		Without an ALLL		With an ALLL
Commercial:	Commercial:												Commercial:
Commercial and industrial	Commercial and industrial	$	129	$	282	$	82	$	450				Commercial and industrial	$	91	$	352	$	125	$	269
CRE	CRE	1		19		63		12					CRE	—		5		12		17
Commercial construction	Commercial construction	4		3		—		14					Commercial construction	—		—		—		7
Lease financing		—		12		—		28

Consumer:	Consumer:												Consumer:
Residential mortgage	Residential mortgage	4		302		4		312					Residential mortgage	3		224		4		292
Residential home equity and direct	Residential home equity and direct	3		143		2		203					Residential home equity and direct	2		164		3		138
Indirect auto	Indirect auto	7		165		1		154					Indirect auto	3		257		1		217
Indirect other	Indirect other	—		6		—		5					Indirect other	—		5		—		5

Total	Total	$	148	$	932	$	152	$	1,178				Total	$	99	$	1,007	$	145	$	945

The following table presents a summary of nonperforming assets and residential mortgage loans in the process of ~~foreclosure.~~foreclosure:


(Dollars in millions)	(Dollars in millions)	Sep 30, 2021		Dec 31, 2020		(Dollars in millions)	Sep 30, 2022		Dec 31, 2021

Nonperforming loans and leases HFI	Nonperforming loans and leases HFI	$	1,080	$	1,330	Nonperforming loans and leases HFI	$	1,106	$	1,090
Nonperforming LHFS	Nonperforming LHFS	76		5		Nonperforming LHFS	72		22
Foreclosed real estate	Foreclosed real estate	9		20		Foreclosed real estate	4		8
Other foreclosed property	Other foreclosed property	39		32		Other foreclosed property	58		43
Total nonperforming assets	Total nonperforming assets	$	1,204	$	1,387	Total nonperforming assets	$	1,240	$	1,163

Residential mortgage loans in the process of foreclosure	Residential mortgage loans in the process of foreclosure	$	157	$	140	Residential mortgage loans in the process of foreclosure	$	265	$	135

~~Truist Financial Corporation 17~~

TDRs

The following table presents a summary of TDRs:


(Dollars in millions)	(Dollars in millions)	Sep 30, 2021		Dec 31, 2020		(Dollars in millions)	Sep 30, 2022		Dec 31, 2021

Performing TDRs:	Performing TDRs:					Performing TDRs:
Commercial:	Commercial:					Commercial:
Commercial and industrial	Commercial and industrial	$	144	$	78	Commercial and industrial	$	165	$	147
CRE	CRE	8		47		CRE	5		5
Commercial construction						Commercial construction	1		—

Lease financing		56		60
Consumer:	Consumer:					Consumer:
Residential mortgage	Residential mortgage	712		648		Residential mortgage	1,144		692
Residential home equity and direct	Residential home equity and direct	105		88		Residential home equity and direct	78		98
Indirect auto	Indirect auto	390		392		Indirect auto	425		389
Indirect other	Indirect other	7		6		Indirect other	7		7
Student	Student	23		5		Student	29		25
Credit card	Credit card	30		37		Credit card	19		27
Total performing TDRs	Total performing TDRs	1,475		1,361		Total performing TDRs	1,873		1,390
Nonperforming TDRs	Nonperforming TDRs	159		164		Nonperforming TDRs	187		152
Total TDRs	Total TDRs	$	1,634	$	1,525	Total TDRs	$	2,060	$	1,542
ALLL attributable to TDRs	ALLL attributable to TDRs	$	108	$	132	ALLL attributable to TDRs	$	120	$	102

The primary type of modification for newly designated TDRs is summarized in the tables below. New TDR balances represent the recorded investment at the end of the quarter in which the modification was made. The prior quarter balance represents recorded investment at the beginning of the quarter in which the modification was made. Rate modifications consist of TDRs made with below market interest rates, including those that also have modifications of loan structures.
As of / For the Three Months Ended September 30, 2021 As of / For the Nine Months Ended September 30, 2021
(Dollars in millions) Type of Modification Prior Quarter Loan Balance ALLL at Period End Type of Modification Prior Quarter Loan Balance ALLL at Period End
Rate Structure Rate Structure
Newly designated TDRs:
Commercial:
Commercial and industrial $ 8 $ 17 $ 27 $ 3 $ 35 $ 116 $ 168 $ 15
CRE — — — — — 10 12 1
Lease financing — 3 3 1 — 3 3 1
Consumer:
Residential mortgage 33 24 57 3 122 163 285 12
Residential home equity and direct 2 8 10 — 6 41 48 2
Indirect auto 39 8 48 4 82 53 142 16
Indirect other — 1 1 — 2 2 3 —
Student — 10 10 — — 18 18 —
Credit card 3 — 3 1 9 — 10 4
Re-modification of previously designated TDRs 23 9 51 37
As of / For the Three Months Ended September 30, 2020 As of / For the Nine Months Ended September 30, 2020
Type of Modification Prior Quarter Loan Balance ALLL at Period End Type of Modification Prior Quarter Loan Balance ALLL at Period End
(Dollars in millions) Rate Structure Rate Structure
Newly designated TDRs:
Commercial:
Commercial and industrial $ 13 $ 49 $ 70 $ 9 $ 46 $ 53 $ 118 $ 12
CRE 4 10 15 2 28 11 32 4
Lease financing — — — — 1 — 1 —
Consumer:
Residential mortgage 157 17 174 8 297 58 359 17
Residential home equity and direct 3 3 6 — 31 13 45 1
Indirect auto 20 4 25 5 98 26 129 17
Indirect other 1 1 1 — 3 1 3 —
Student — 1 1 — — 5 5 —
Credit card 6 — 6 2 24 — 23 8
Re-modification of previously designated TDRs 10 5 36 11

~~Charge-offs and forgiveness of principal and interest for TDRs were immaterial for all periods presented.~~

18 Truist Financial Corporation

The amount of modified loans that were classified as TDRs during the previous 12 months and experienced a payment default for the three and nine months ended September 30, 2021 and 2020 was immaterial. Payment default is defined as movement of the TDR to nonperforming status, foreclosure, or charge-off, whichever occurs first.



	As of / For the Three Months Ended September 30, 2022								As of / For the Nine Months Ended September 30, 2022
(Dollars in millions)	Type of Modification				Prior Quarter Loan Balance		Related ALLL at Period End		Type of Modification				Prior Quarter Loan Balance		Related ALLL at Period End
	Rate		Structure						Rate		Structure
Newly designated TDRs:
Commercial	$	66	$	—	$	66	$	9	$	66	$	9	$	77	$	9




Consumer	123		117		236		12		368		505		858		41





Credit card	2		—		2		1		6		—		6		3
Re-modification of previously designated TDRs	43		50						73		90


	As of / For the Three Months Ended September 30, 2021								As of / For the Nine Months Ended September 30, 2021
	Type of Modification				Prior Quarter Loan Balance		Related ALLL at Period End		Type of Modification				Prior Quarter Loan Balance		Related ALLL at Period End
(Dollars in millions)	Rate		Structure						Rate		Structure
Newly designated TDRs:
Commercial	$	8	$	20	$	30	$	4	$	35	$	129	$	183	$	17




Consumer	74		51		126		7		212		277		496		30





Credit card	3		—		3		1		9		—		10		4
Re-modification of previously designated TDRs	23		9						51		37

Unearned Income, Discounts, and Net Deferred Loan Fees and Costs

The following table presents additional information about loans and leases:


(Dollars in millions)	(Dollars in millions)	Sep 30, 2021		Dec 31, 2020		(Dollars in millions)	Sep 30, 2022		Dec 31, 2021

Unearned income, discounts and net deferred loan fees and costs		$	1,142	$	2,219
Unearned income, discounts, and net deferred loan fees and costs						Unearned income, discounts, and net deferred loan fees and costs	$	230	$	849

Truist Financial Corporation 19

NOTE 6. Goodwill and Other Intangible Assets

The Company performed a qualitative assessment of current events and circumstances, including macroeconomic and market factors, industry and banking sector events, Truist specific performance indicators, and a comparison of management’s forecast and assumptions to those used in its October 1, ~~2020~~2021 quantitative impairment test, concluding that it was not more-likely-than-not that the fair value of one or more of its reporting units is below its respective carrying amount as of September 30, ~~2021,~~2022, and therefore no triggering event occurred that required a quantitative goodwill impairment test. ~~See~~Refer to “Note 1. Basis of Presentation” ~~and “Note 7. Goodwill and Other Intangible Assets”~~ in Truist’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 for additional information.

The changes in the carrying amount of goodwill attributable to operating segments are reflected in the table below. ~~The adjustments~~Activity during 2022 reflects the acquisition of BenefitMall and Kensington Vanguard National Land Services. Activity during 2021 primarily reflects the acquisitions of Service Finance, LLC, and Constellation Affiliated Partners. Refer to “Note 2. Business Combinations” in Truist’s Annual Report on Form 10-K for the year ended December 31, 2021 ~~to CB&W reflect~~for additional information on the ~~divestiture of certain businesses. Refer to~~acquisitions and “Note 18. Operating Segments” for additional information on segments.
(Dollars in millions) CB&W C&CB IH Total
Goodwill, January 1, 2020 $ 14,040 $ 8,125 $ 1,989 $ 24,154
Mergers and acquisitions — — 450 450
Adjustments and other 1,801 (1,958) — (157)
Goodwill, December 31, 2020 15,841 6,167 2,439 24,447
Mergers and acquisitions — — 556 556
Adjustments and other (139) (18) 45 (112)
Goodwill, September 30, 2021 $ 15,702 $ 6,149 $ 3,040 $ 24,891



(Dollars in millions)	CB&W		C&CB		IH		Total



Goodwill, January 1, 2021	$	15,841	$	6,167	$	2,439	$	24,447
Mergers and acquisitions	1,168		—		556		1,724
Adjustments and other	(139)		(18)		84		(73)
Goodwill, December 31, 2021	16,870		6,149		3,079		26,098
Mergers and acquisitions	—		—		697		697
Adjustments and other	—		—		15		15
Goodwill, September 30, 2022	$	16,870	$	6,149	$	3,791	$	26,810

The following table, which excludes fully amortized intangibles, presents information for identifiable intangible assets:


			September 30, 2021										December 31, 2020
									September 30, 2022										December 31, 2021
(Dollars in millions)	(Dollars in millions)	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount				Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount		(Dollars in millions)		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
CDI	CDI		$	2,563		$	(1,097)			$	1,466		$	2,600		$	(852)			$	1,748		CDI	$	2,472	$	(1,328)	$	1,144	$	2,563	$	(1,190)	$	1,373
Other, primarily client relationship intangibles	Other, primarily client relationship intangibles		2,499			(1,035)				1,464			2,217			(981)				1,236			Other, primarily client relationship intangibles	3,824		(1,242)		2,582		3,116		(1,081)		2,035
Total	Total		$	5,062		$	(2,132)			$	2,930		$	4,817		$	(1,833)			$	2,984		Total	$	6,296	$	(2,570)	$	3,726	$	5,679	$	(2,271)	$	3,408

In 2022, Truist redeemed a noncontrolling equity interest in SunTrust Merchant Services, LLC, and paid cash of $175 million in exchange for the rights to certain merchant banking relationships, including relationships previously referred by Truist to SunTrust Merchant Services, LLC. Upon completion of this transaction, Truist recognized a gain on the redemption of noncontrolling equity interest of $74 million and $282 million of other intangibles representing the fair value of acquired contractual relationships as of the transaction date. The intangible assets are being amortized over a term of 12 years based upon the estimated duration of economic benefits received.

20 Truist Financial Corporation 19

NOTE 7. Loan Servicing

The Company acquires servicing rights, and retains servicing rights related to certain of its sales or securitizations of residential mortgages, commercial mortgages, and ~~commercial mortgage~~other consumer loans. Servicing rights ~~on residential and commercial mortgages~~ are capitalized by the Company as ~~MSRs~~Loan servicing rights on the Consolidated Balance Sheets. Income earned by the Company on its ~~residential MSRs is derived primarily from contractually specified mortgage servicing fees and late fees, net of curtailment costs. Income earned by the Company on its commercial mortgage~~loan servicing rights is derived primarily from contractually specified servicing fees, late fees, net of curtailment costs, and other ancillary fees.

Residential Mortgage Activities

The following tables summarize residential mortgage servicing activities:
(Dollars in millions) Sep 30, 2021 Dec 31, 2020
UPB of residential mortgage loan servicing portfolio $ 248,546 $ 239,034
UPB of residential mortgage loans serviced for others, primarily agency conforming fixed rate 198,119 188,341
Mortgage loans sold with recourse 269 328
Maximum recourse exposure from mortgage loans sold with recourse liability 171 201
Indemnification, recourse and repurchase reserves 89 93
As of / For the Nine Months Ended September 30,
(Dollars in millions) 2021 2020
UPB of residential mortgage loans sold from LHFS $ 30,148 $ 36,069
Pre-tax gains recognized on mortgage loans sold and held for sale 347 828
Servicing fees recognized from mortgage loans serviced for others 437 480
Approximate weighted average servicing fee on the outstanding balance of residential mortgage loans serviced for others 0.31 % 0.32 %
Weighted average interest rate on mortgage loans serviced for others 3.49 3.92



(Dollars in millions)	Sep 30, 2022			Dec 31, 2021
UPB of residential mortgage loan servicing portfolio	$	275,526		$	246,727
UPB of residential mortgage loans serviced for others, primarily agency conforming fixed rate	218,740			196,011
Mortgage loans sold with recourse	205			244
Maximum recourse exposure from mortgage loans sold with recourse liability	129			155
Indemnification, recourse and repurchase reserves	57			74

As of / For the Nine Months Ended September 30, (Dollars in millions)	2022			2021
UPB of residential mortgage loans sold from LHFS	$	22,971		$	30,148
Pre-tax gains recognized on mortgage loans sold and held for sale	62			347
Servicing fees recognized from mortgage loans serviced for others	462			437
Approximate weighted average servicing fee on the outstanding balance of residential mortgage loans serviced for others	0.30		%	0.31		%
Weighted average interest rate on mortgage loans serviced for others	3.45			3.49

The following table presents a roll forward of the carrying value of residential MSRs recorded at fair value:
Nine Months Ended September 30,
(Dollars in millions) 2021 2020
Residential MSRs, carrying value, January 1 $ 1,778 $ 2,371
Acquired 355 —
Additions 476 490
Change in fair value due to changes in valuation inputs or assumptions:
Prepayment speeds 12 (612)
OAS 238 53
Realization of expected net servicing cash flows, passage of time and other (550) (539)
Residential MSRs, carrying value, September 30 $ 2,309 $ 1,763



(Dollars in millions)	2022		2021
Residential MSRs, carrying value, January 1	$	2,305	$	1,778
Acquired	321		355
Additions	372		476
Change in fair value due to changes in valuation inputs or assumptions:
Prepayment speeds	795		12
OAS	(24)		238

Realization of expected net servicing cash flows, passage of time and other	(306)		(550)
Residential MSRs, carrying value, September 30	$	3,463	$	2,309

The sensitivity of the fair value of the Company’s residential MSRs to changes in key assumptions is presented in the following table:


		September 30, 2021									December 31, 2020												September 30, 2022														December 31, 2021
		Range				Weighted Average					Range								Weighted Average				Range										Weighted Average				Range								Weighted Average
(Dollars in millions)	(Dollars in millions)	Min		Max					Min				Max				(Dollars in millions)	Min						Max							Min						Max

Prepayment speed	Prepayment speed	11.3	%	15.3	%				14.2	%			12.8	%			30.8	%					15.4		%	Prepayment speed	8.4		%			11.0		%		8.9		%		11.4		%		15.3		%		13.8	%
Effect on fair value of a 10% increase	Effect on fair value of a 10% increase					$	(119)												$	(89)		Effect on fair value of a 10% increase												$	(108)											$	(113)
Effect on fair value of a 20% increase	Effect on fair value of a 20% increase					(228)													(171)			Effect on fair value of a 20% increase											(209)												(216)
OAS	OAS	1.8	%	10.1	%	4.0		%			3.5	%			13.7	%			7.3		%	OAS	1.6		%			11.7		%			4.2		%		1.5		%		10.7		%		4.2		%
Effect on fair value of a 10% increase	Effect on fair value of a 10% increase					$	(36)												$	(45)		Effect on fair value of a 10% increase											$	(57)											$	(37)
Effect on fair value of a 20% increase	Effect on fair value of a 20% increase					(71)													(88)			Effect on fair value of a 20% increase											(112)												(73)
Composition of loans serviced for others:	Composition of loans serviced for others:																					Composition of loans serviced for others:
Fixed-rate residential mortgage loans	Fixed-rate residential mortgage loans					99.2		%											98.8		%	Fixed-rate residential mortgage loans											99.5		%										99.3		%
Adjustable-rate residential mortgage loans	Adjustable-rate residential mortgage loans					0.8													1.2			Adjustable-rate residential mortgage loans											0.5												0.7
Total	Total					100.0		%											100.0		%	Total											100.0		%										100.0		%
Weighted average life	Weighted average life					5.1 years													4.8 years			Weighted average life											6.9 years												5.2 years

~~20 Truist Financial Corporation~~

The sensitivity calculations above are hypothetical and should not be considered ~~to be~~ predictive of future performance. As indicated, changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in the above table, the effect of an adverse variation in one assumption on the fair value of the MSRs is calculated without changing any other assumption; while in reality, changes in one factor may result in changes in another, which may magnify or counteract the effect of the change. See “Note 15. Fair Value Disclosures” for additional information on the valuation techniques used.

Truist Financial Corporation 21

Commercial Mortgage Activities

The following table summarizes commercial mortgage servicing ~~activities for the periods presented:~~activities:


(Dollars in millions)	(Dollars in millions)	Sep 30, 2021		Dec 31, 2020		(Dollars in millions)	Sep 30, 2022		Dec 31, 2021

UPB of CRE mortgages serviced for others	UPB of CRE mortgages serviced for others	$	37,437	$	36,670	UPB of CRE mortgages serviced for others	$	36,263	$	37,960
CRE mortgages serviced for others covered by recourse provisions	CRE mortgages serviced for others covered by recourse provisions	10,146		9,019		CRE mortgages serviced for others covered by recourse provisions	9,832		10,243
Maximum recourse exposure from CRE mortgages sold with recourse liability	Maximum recourse exposure from CRE mortgages sold with recourse liability	2,922		2,624		Maximum recourse exposure from CRE mortgages sold with recourse liability	2,819		2,958
Recorded reserves related to recourse exposure	Recorded reserves related to recourse exposure	18		18		Recorded reserves related to recourse exposure	15		16
CRE mortgages originated during the year-to-date period	CRE mortgages originated during the year-to-date period	6,490		6,739		CRE mortgages originated during the year-to-date period	5,778		9,380
Commercial MSRs at fair value	Commercial MSRs at fair value	275		245		Commercial MSRs at fair value	302		280

Other Servicing Activities

The Company had $32 million and $48 million of other loan servicing rights at fair value as of September 30, 2022 and December 31, 2021, respectively.

NOTE 8. Other Assets and Liabilities

Lessee Operating and Finance Leases

The Company leases certain assets, consisting primarily of real estate, and assesses at contract inception whether a contract is, or contains, a lease. The following tables present additional information on leases, excluding leases related to the lease financing businesses:


		September 30, 2021						December 31, 2020							September 30, 2022						December 31, 2021
(Dollars in millions)	(Dollars in millions)	Operating Leases			Finance Leases			Operating Leases			Finance Leases			(Dollars in millions)	Operating Leases			Finance Leases			Operating Leases			Finance Leases
ROU assets	ROU assets	$	1,207		$	25		$	1,333		$	36		ROU assets	$	1,116		$	21		$	1,168		$	22
Lease liabilities	Lease liabilities	1,694			31			1,896			42			Lease liabilities	1,477			24			1,600			26
Weighted average remaining term	Weighted average remaining term	6.7 years			6.4 years			6.9 years			6.3 years			Weighted average remaining term	6.3 years			5.8 years			6.6 years			6.4 years
Weighted average discount rate	Weighted average discount rate	2.4		%	3.6		%	2.4		%	4.8		%	Weighted average discount rate	2.4		%	3.4		%	2.3		%	3.5		%


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020		(Dollars in millions)	2022		2021		2022		2021

Operating lease costs	Operating lease costs	$	71	$	87	$	241	$	280	Operating lease costs	$	81	$	71	$	241	$	241

Lessor Operating Leases

The Company’s two primary lessor businesses are equipment financing and structured real estate with income recorded in Operating lease income on the Consolidated Statements of Income.

The following table presents a summary of ~~assets under operating leases and activity related to~~ assets under operating leases. This table excludes subleases on assets included in premises and equipment.


(Dollars in millions)	(Dollars in millions)	Sep 30, 2021		Dec 31, 2020		(Dollars in millions)	Sep 30, 2022		Dec 31, 2021

Assets held under operating leases (1)	Assets held under operating leases (1)	$	1,932	$	2,144	Assets held under operating leases (1)	$	2,215	$	2,110

Accumulated depreciation	Accumulated depreciation	(405)		(517)		Accumulated depreciation	(552)		(539)
Net	Net	$	1,527	$	1,627	Net	$	1,663	$	1,571

(1) Includes certain land parcels subject to operating leases that have indefinite lives.

~~The carrying value of assets previously under operating leases was immaterial.~~

Bank-Owned Life Insurance

Bank-owned life insurance consists of life insurance policies held on certain teammates for which the Company is the beneficiary. These policies provide the Company an efficient form of funding for retirement and other employee benefits costs. The carrying value of bank-owned life insurance was ~~$6.5~~$7.6 billion at September 30, ~~2021~~2022 and $7.3 billion at December 31, ~~2020.~~

2021.

22 Truist Financial Corporation 21

NOTE 9. Borrowings

The following table presents a summary of short-term borrowings:


(Dollars in millions)	(Dollars in millions)	Sep 30, 2021		Dec 31, 2020	(Dollars in millions)		Sep 30, 2022	Dec 31, 2021

Federal funds purchased	Federal funds purchased	$	8		$	79			Federal funds purchased	$	3,725	$	—
Securities sold under agreements to repurchase	Securities sold under agreements to repurchase	2,600			1,221				Securities sold under agreements to repurchase	2,193		2,435
FHLB advances	FHLB advances	—			2,649				FHLB advances	16,900		—
Collateral in excess of derivative exposures	Collateral in excess of derivative exposures	310			385				Collateral in excess of derivative exposures	358		318
Master notes	Master notes	573			621				Master notes	606		808
Other short-term borrowings		1,735			1,137
Securities sold short									Securities sold short	1,905		1,731

Total short-term borrowings	Total short-term borrowings	$	5,226		$	6,092			Total short-term borrowings	$	25,687	$	5,292

The following table presents a summary of long-term debt:
(Dollars in millions) Sep 30, 2021 Dec 31, 2020
Truist Financial Corporation:
Fixed rate senior notes $ 14,365 $ 15,984
Floating rate senior notes 1,348 900
Fixed rate subordinated notes 1,266 1,283
Capital notes 619 615
Structured notes (1) 84 108
Truist Bank:
Fixed rate senior notes 10,604 11,907
Floating rate senior notes 2,400 1,567
Fixed rate subordinated notes 5,099 5,142
FHLB advances 867 878
Other long-term debt (2) 1,185 1,014
Nonbank subsidiaries:
Other long-term debt (3) — 199
Total long-term debt $ 37,837 $ 39,597


(Dollars in millions)	Sep 30, 2022		Dec 31, 2021
Truist Financial Corporation:
Fixed rate senior notes (1)	$	12,585	$	13,271
Floating rate senior notes (1)	999		1,348
Fixed rate subordinated notes (2)	1,874		1,254
Capital Notes (2)	624		620
Structured notes (3)	11		11
Truist Bank:
Fixed rate senior notes (1)	6,992		9,545
Floating rate senior notes (1)	1,749		2,399
Fixed rate subordinated notes (2)	4,766		5,043

FHLB advances	2		863

Other long-term debt (4)	1,277		1,263
Nonbank subsidiaries:
Other long-term debt (5)	293		296
Total long-term debt	$	31,172	$	35,913

(1)Prior period was revised to reclassify certain floating rate senior notes that were reported as fixed rate senior notes at December 31, 2021.

(2)Subordinated and capital notes with a remaining maturity of one year or greater qualify under the risk-based capital guidelines as Tier 2 supplementary capital, subject to certain limitations.

(3)Consist of notes with various terms that include fixed or floating rate interest or returns that are linked to an equity index.

~~(2)~~(4)Includes debt associated with finance leases, tax credit investments, and other.

~~(3)~~(5)Includes debt associated with structured real estate leases.

The Company does not consolidate certain wholly-owned trusts which were formed for the sole purpose of issuing trust preferred securities. The proceeds from the trust preferred securities issuances were invested in capital notes of the Parent Company. The Parent Company’s obligations constitute a full and unconditional guarantee of the trust preferred securities.

~~22 Truist Financial Corporation~~

NOTE 10. Shareholders’ Equity

Common Stock

The following table presents ~~the~~total dividends declared per share of common stock:
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Cash dividends declared per share $ 0.48 $ 0.45 $ 1.38 $ 1.35


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Cash dividends declared per share	$	0.52	$	0.48	$	1.48	$	1.38

Share Repurchase Activity

~~As of September 30, 2021, the Board of Directors had authorized the~~Truist’s share repurchase of up to $4.2 billion of the Company’s common stock through September 30, 2022. For the nine months ended September 30, 2021, the Company repurchased $1.1 billion of common stock, which represented 19.8 million shares. Repurchased shares revert to the status of authorized and unissued shares. At September 30, 2021, Truist had remaining authorization to repurchase $3.1 billion of common stock under the Board approved repurchase plan. The amount of share repurchasesactivity is dependent on capital deployment through organic growth and acquisitions, giving consideration to economic and regulatory conditions.

~~Preferred Stock~~

~~During~~ The Board of Directors has authorized the ~~first quarter~~repurchase of ~~2021,~~up to $4.1 billion of the Company’s common stock from October 1, 2022 through September 30, 2023. For the nine months ended September 30, 2022, the Company ~~redeemed all 18,000 outstanding shares~~repurchased $250 million of ~~its perpetual preferred~~common stock, ~~series F and the corresponding depositary shares representing fractional interests in such series for $450~~which represented 5.1 million ~~and 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.~~

During the second quarter of 2021, the Company redeemed 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.shares.

Truist Financial Corporation 23

NOTE 11. AOCI

AOCI includes the after-tax change in unrecognized net costs related to defined benefit pension and OPEB plans as well as unrealized gains and losses on cash flow hedges, AFS securities, and HTM securities transferred from AFS securities.


Three Months Ended September 30, 2021 and 2020 (Dollars in millions)		Pension and OPEB Costs		Cash Flow Hedges		AFS Securities		Other, net		Total
AOCI balance, July 1, 2020		$	(1,093)	$	(79)	$	2,022	$	(3)	$	847
OCI before reclassifications, net of tax		(25)		—		(380)		1		(404)
Amounts reclassified from AOCI:
Before tax		18		10		7		—		35
Tax effect		4		2		2		—		8
Amounts reclassified, net of tax		14		8		5		—		27
Total OCI, net of tax		(11)		8		(375)		1		(377)
AOCI balance, September 30, 2020		$	(1,104)	$	(71)	$	1,647	$	(2)	$	470
(Dollars in millions)												(Dollars in millions)	Pension and OPEB Costs		Cash Flow Hedges		AFS Securities		HTM Securities		Other, net		Total
AOCI balance, July 1, 2021	AOCI balance, July 1, 2021	$	(842)	$	(18)	$	(191)	$	3	$	(1,048)	AOCI balance, July 1, 2021	$	(842)	$	(18)	$	(191)	$	—	$	3	$	(1,048)
OCI before reclassifications, net of tax	OCI before reclassifications, net of tax	(59)		—		(496)		(2)		(557)		OCI before reclassifications, net of tax	(59)		—		(496)		—		(2)		(557)
Amounts reclassified from AOCI:	Amounts reclassified from AOCI:											Amounts reclassified from AOCI:
Before tax	Before tax	6		7		75		—		88		Before tax	6		7		75		—		—		88
Tax effect	Tax effect	2		2		17		—		21		Tax effect	2		2		17		—		—		21
Amounts reclassified, net of tax	Amounts reclassified, net of tax	4		5		58		—		67		Amounts reclassified, net of tax	4		5		58		—		—		67
Total OCI, net of tax	Total OCI, net of tax	(55)		5		(438)		(2)		(490)		Total OCI, net of tax	(55)		5		(438)		—		(2)		(490)
AOCI balance, September 30, 2021	AOCI balance, September 30, 2021	$	(897)	$	(13)	$	(629)	$	1	$	(1,538)	AOCI balance, September 30, 2021	$	(897)	$	(13)	$	(629)	$	—	$	1	$	(1,538)
AOCI balance, July 1, 2022												AOCI balance, July 1, 2022	$	(73)	$	45	$	(6,476)	$	(2,736)	$	—	$	(9,240)
OCI before reclassifications, net of tax												OCI before reclassifications, net of tax	—		(140)		(3,047)		—		(6)		(3,193)

Nine Months Ended September 30, 2021 and 2020 (Dollars in millions)		Pension and OPEB Costs		Cash Flow Hedges		AFS Securities		Other, net		Total
Amounts reclassified from AOCI:												Amounts reclassified from AOCI:
Before tax												Before tax	6		1		(6)		105		—		106
Tax effect												Tax effect	—		—		(2)		25		—		23
Amounts reclassified, net of tax												Amounts reclassified, net of tax	6		1		(4)		80		—		83
Total OCI, net of tax												Total OCI, net of tax	6		(139)		(3,051)		80		(6)		(3,110)
AOCI balance, September 30, 2022												AOCI balance, September 30, 2022	$	(67)	$	(94)	$	(9,527)	$	(2,656)	$	(6)	$	(12,350)

(Dollars in millions)												(Dollars in millions)	Pension and OPEB Costs		Cash Flow Hedges		AFS Securities		HTM Securities		Other, net		Total

AOCI balance, January 1, 2020		$	(1,122)	$	(101)	$	380	$	(1)	$	(844)
OCI before reclassifications, net of tax		(26)		—		1,411		(1)		1,384
Amounts reclassified from AOCI:
Before tax		58		39		(189)		—		(92)
Tax effect		14		9		(45)		—		(22)
Amounts reclassified, net of tax		44		30		(144)		—		(70)
Total OCI, net of tax		18		30		1,267		(1)		1,314
AOCI balance, September 30, 2020		(1,104)		(71)		1,647		(2)		470
AOCI balance, January 1, 2021	AOCI balance, January 1, 2021	$	(875)	$	(64)	$	1,654	$	1	$	716	AOCI balance, January 1, 2021	$	(875)	$	(64)	$	1,654	$	—	$	1	$	716
OCI before reclassifications, net of tax	OCI before reclassifications, net of tax	(40)		—		(2,510)		—		(2,550)		OCI before reclassifications, net of tax	(40)		—		(2,510)		—		—		(2,550)
Amounts reclassified from AOCI:	Amounts reclassified from AOCI:											Amounts reclassified from AOCI:
Before tax	Before tax	24		67		296		—		387		Before tax	24		67		296		—		—		387
Tax effect	Tax effect	6		16		69		—		91		Tax effect	6		16		69		—		—		91
Amounts reclassified, net of tax	Amounts reclassified, net of tax	18		51		227		—		296		Amounts reclassified, net of tax	18		51		227		—		—		296
Total OCI, net of tax	Total OCI, net of tax	(22)		51		(2,283)		—		(2,254)		Total OCI, net of tax	(22)		51		(2,283)		—		—		(2,254)
AOCI balance, September 30, 2021	AOCI balance, September 30, 2021	$	(897)	$	(13)	$	(629)	$	1	$	(1,538)	AOCI balance, September 30, 2021	$	(897)	$	(13)	$	(629)	$	—	$	1	$	(1,538)
AOCI balance, January 1, 2022												AOCI balance, January 1, 2022	$	(86)	$	(9)	$	(1,510)	$	—	$	1	$	(1,604)
OCI before reclassifications, net of tax												OCI before reclassifications, net of tax	2		(94)		(10,956)		—		(7)		(11,055)
AFS Securities transferred to HTM, net of tax												AFS Securities transferred to HTM, net of tax	—		—		2,872		(2,872)		—		—
Amounts reclassified from AOCI:												Amounts reclassified from AOCI:
Before tax												Before tax	22		12		87		281		—		402
Tax effect												Tax effect	5		3		20		65		—		93
Amounts reclassified, net of tax												Amounts reclassified, net of tax	17		9		67		216		—		309
Total OCI, net of tax												Total OCI, net of tax	19		(85)		(10,889)		216		(7)		(10,746)
AOCI balance, September 30, 2022												AOCI balance, September 30, 2022	$	(67)	$	(94)	$	(9,527)	$	(2,656)	$	(6)	$	(12,350)
Primary income statement location of amounts reclassified from AOCI	Primary income statement location of amounts reclassified from AOCI	Other expense		Net interest income and Other expense		Securities gains (losses) and Net interest income		Net interest income				Primary income statement location of amounts reclassified from AOCI	Other expense		Net interest income and Other expense		Securities gains (losses) and Net interest income		Net interest income		Net interest income

~~24 Truist Financial Corporation~~

NOTE 12. Income Taxes

For the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, the provision for income taxes was ~~$423~~$363 million and ~~$255~~$423 million, respectively, representing effective tax rates of ~~19.9%~~18.2% and ~~18.3%~~19.9%, respectively. For the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, the provision for income taxes was ~~$1.2~~$1.1 billion and ~~$670 million,~~$1.2 billion, respectively, representing effective tax rates of ~~19.7%~~18.8% and ~~17.5%~~19.7%, respectively. The ~~higher~~lower effective tax rate for the three and nine months ended September 30, ~~2021~~2022 was primarily ~~due to higher pre-tax income without a corresponding~~driven by an increase in ~~beneficial~~discrete tax ~~items.~~benefits recognized in the current year and changes in the full year forecasted effective tax rate. The Company calculated the provision for income taxes by applying the estimated annual effective tax rate to year-to-date pre-tax income and adjusting for discrete items that occurred during the period.

24 Truist Financial Corporation

NOTE 13. Benefit Plans

The components of net periodic (benefit) cost for defined benefit pension plans are summarized in the following table:


			Three Months Ended September 30,				Nine Months Ended September 30,						Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	Income Statement Location	2021		2020		2021		2020		(Dollars in millions)	Income Statement Location	2022		2021		2022		2021
Service cost	Service cost	Personnel expense	$	148	$	141	$	463	$	377	Service cost	Personnel expense	$	139	$	148	$	418	$	463
Interest cost	Interest cost	Other expense	80		78		239		234		Interest cost	Other expense	87		80		263		239
Estimated return on plan assets	Estimated return on plan assets	Other expense	(250)		(217)		(748)		(650)		Estimated return on plan assets	Other expense	(269)		(250)		(808)		(748)
Amortization and other	Amortization and other	Other expense	9		20		26		58		Amortization and other	Other expense	10		9		27		26
Net periodic (benefit) cost	Net periodic (benefit) cost		$	(13)	$	22	$	(20)	$	19	Net periodic (benefit) cost		$	(33)	$	(13)	$	(100)	$	(20)

Truist makes contributions to the qualified pension plans ~~in amounts between~~up to the ~~minimum required for funding and the~~ maximum amount deductible for federal income tax purposes. Discretionary contributions totaling ~~$403~~$351 million were made to the Truist pension plan during the nine months ended September 30, ~~2021. There are no required contributions for the remainder of 2021.~~2022.

NOTE 14. Commitments and Contingencies

Truist utilizes a variety of financial instruments to mitigate exposure to risks and meet the financing needs ~~of clients~~ and ~~to mitigate exposure to risks.~~provide investment opportunities for clients. These financial instruments include commitments to extend credit, letters of credit and financial guarantees, derivatives, and ~~derivatives.~~other investments. Truist also has commitments to fund certain affordable housing investments and contingent liabilities related to certain sold loans.

Tax Credit and Certain Equity Investments

The Company invests in certain affordable housing projects throughout its market area as a means of supporting local communities. Truist receives tax credits related to these investments, for which the Company typically acts as a limited partner and therefore does not exert control over the operating or financial policies of the partnerships. The following table summarizes certain tax credit and certain equity investments:

(Dollars in millions)

Balance Sheet Location

Sep 30, 2021

Dec 31, 2020

(Dollars in millions)

Balance Sheet Location

Sep 30, 2022

Dec 31, 2021

Investments in affordable housing projects:

Carrying amount

Other assets

3,911

3,823

Carrying amount

Other assets

4,342

4,107

Amount of future funding commitments included in carrying amount

Other liabilities

1,157

1,057

Amount of future funding commitments included in carrying amount

Other liabilities

1,544

1,285

Lending exposure

580

546

Lending exposure

Loans and leases for funded amounts

1,308

763

Renewable energy investments:

Carrying amount

Other assets

215

167

Carrying amount

Other assets

271

257

Amount of future funding commitments not included in carrying amount

189

Amount of future funding commitments not included in carrying amount

398

Private equity and certain other equity method investments:

Carrying amount

Other assets

1,758

1,574

Carrying amount

Other assets

1,867

1,822

Amount of future funding commitments not included in carrying amount

474

471

Amount of future funding commitments not included in carrying amount

396

411

~~Truist Financial Corporation 25~~

The following table presents a summary of tax credits and amortization associated with the Company’s tax credit investment activity:


			Three Months Ended September 30,				Nine Months Ended September 30,						Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	Income Statement Location	2021		2020		2021		2020		(Dollars in millions)	Income Statement Location	2022		2021		2022		2021

Tax credits:	Tax credits:										Tax credits:
Investments in affordable housing projects	Investments in affordable housing projects	Provision for income taxes	$	121	$	116	$	360	$	347	Investments in affordable housing projects	Provision for income taxes	$	137	$	121	$	392	$	360
Other community development investments	Other community development investments	Provision for income taxes	24		23		70		68		Other community development investments	Provision for income taxes	26		24		73		70
Renewable energy investments	Renewable energy investments	NA (1)	36		32		96		134		Renewable energy investments	NA (1)	31		36		92		96
Amortization and other changes in carrying amount:	Amortization and other changes in carrying amount:										Amortization and other changes in carrying amount:
Investments in affordable housing projects	Investments in affordable housing projects	Provision for income taxes	$	117	$	119	$	353	$	346	Investments in affordable housing projects	Provision for income taxes	$	143	$	117	$	391	$	353
Other community development investments	Other community development investments	Other noninterest income	21		19		59		57		Other community development investments	Other noninterest income	21		21		60		59
Renewable energy investments	Renewable energy investments	Other noninterest income	1		1		3		3		Renewable energy investments	Other noninterest income	4		1		—		3

(1)Tax credits received for these investments are recorded as a reduction to the carrying value of these investments.

Truist Financial Corporation 25

Letters of Credit and Financial Guarantees

In the normal course of business, Truist utilizes certain financial instruments to meet the financing needs of clients and to mitigate exposure to risks. Such financial instruments include commitments to extend credit and certain contractual agreements, including standby letters of credit and financial guarantee arrangements.

The following is a summary of selected notional amounts of off-balance sheet financial instruments:


(Dollars in millions)	(Dollars in millions)	September 30, 2021		December 31, 2020		(Dollars in millions)	Sep 30, 2022		Dec 31, 2021

Commitments to extend, originate, or purchase credit	Commitments to extend, originate, or purchase credit	$	202,167	$	186,731	Commitments to extend, originate, or purchase credit	$	214,549	$	198,658
Residential mortgage loans sold with recourse	Residential mortgage loans sold with recourse	269		328		Residential mortgage loans sold with recourse	205		244
CRE mortgages serviced for others covered by recourse provisions	CRE mortgages serviced for others covered by recourse provisions	10,146		9,019		CRE mortgages serviced for others covered by recourse provisions	9,832		10,243
Other loans serviced for others covered by recourse provisions						Other loans serviced for others covered by recourse provisions	667		588
Letters of credit	Letters of credit	5,074		5,066		Letters of credit	6,027		5,568

Total Return Swaps

The Company facilitates matched book TRS transactions on behalf of clients, whereby a VIE purchases reference assets identified by a client and the Company enters into a TRS with the VIE, with a mirror-image TRS facing the client. The Company provides senior financing to the VIE in the form of demand notes to fund the purchase of the reference assets. Reference assets are typically fixed income instruments primarily composed of syndicated bank loans. The TRS contracts pass through interest and other cash flows on the reference assets to the third party clients, along with exposing those clients to decreases in value on the assets and providing them with the rights to appreciation on the assets. The terms of the TRS contracts require the third parties to post initial margin collateral, as well as ongoing margin as the fair values of the underlying reference assets change. The following table provides a summary of the TRS transactions with VIE purchases. VIE assets include trading loans and bonds:


(Dollars in millions)	Sep 30, 2022		Dec 31, 2021
Total return swaps:
VIE assets	$	1,568	$	1,519
Trading loans and bonds	1,527		1,491
VIE liabilities	118		50

The Company concluded that the associated VIEs should be consolidated because the Company has (i) the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) the obligation to absorb losses and the right to receive benefits, that could potentially be significant. At September 30, 2021, the Company’s Consolidated Balance Sheet reflected $1.6 billion of assets and $133 million of other liabilities of the VIEs. At December 31, 2020, the Company’s Consolidated Balance Sheet reflected $1.3 billion of assets and $41 million of other liabilities of the VIEs. VIE assets include trading loans and bonds totaling $1.5 billion and $1.3 billion at September 30, 2021 and December 31, 2020, respectively. The activities of the VIEs are restricted to buying and selling the reference assets and the risks/benefits of any such assets owned by the VIEs are passed to the third party clients via the TRS contracts. For additional information on TRS contracts and the related VIEs, see “Note 16. Derivative Financial Instruments.”

~~26 Truist Financial Corporation~~

Pledged Assets

Certain assets were pledged to secure municipal deposits, securities sold under agreements to repurchase, certain derivative agreements, and borrowings or borrowing capacity, as well as to fund certain obligations related to nonqualified defined benefit and defined contribution retirement plans and for other purposes as required or permitted by law. Assets pledged to the FHLB and FRB are subject to applicable asset discounts when determining borrowing capacity. The Company ~~obtains~~has capacity for secured financing from both the FRB and FHLB and letters of credit from the ~~FRB and~~ FHLB. The Company’s letters of credit from the FHLB can be used to secure various client deposits, including public fund relationships. Excluding assets related to ~~employee~~nonqualified benefit plans, the majority of the agreements governing the pledged assets do not permit the other party to sell or repledge the collateral. The following table provides the total carrying amount of pledged assets by asset type:


(Dollars in millions)	(Dollars in millions)	Sep 30, 2021		Dec 31, 2020		(Dollars in millions)	Sep 30, 2022		Dec 31, 2021

Pledged securities	Pledged securities	$	25,914	$	24,974	Pledged securities	$	26,834	$	29,678

Pledged loans:	Pledged loans:					Pledged loans:
FRB	FRB	72,030		75,615		FRB	70,471		73,349
FHLB	FHLB	66,040		69,994		FHLB	65,483		64,698
Unused borrowing capacity:	Unused borrowing capacity:					Unused borrowing capacity:
FRB	FRB	51,457		52,831		FRB	49,525		52,170
FHLB	FHLB	52,459		52,274		FHLB	28,548		49,244

26 Truist Financial Corporation

Litigation and Regulatory Matters

Truist and/or its subsidiaries are routinely named as defendants in or parties to numerous actual or threatened legal proceedings, including ~~private,~~ civil litigation and regulatory investigations or enforcement matters, arising from the ordinary conduct of its regular business activities. The matters range from individual actions involving a single plaintiff to class action lawsuits with ~~multiple~~many class members and can involve claims for substantial ~~amounts.~~or indeterminate alleged damages or for injunctive or other relief. Investigations may involve both formal and informal proceedings, by both governmental agencies and self-regulatory ~~organizations.~~organizations, and could result in fines, penalties, restitution, and/or alterations in Truist’s business practices. These legal proceedings are at varying stages of adjudication, arbitration, or investigation and may consist of a variety of claims, including common law tort and contract claims, as well as statutory antitrust, securities, and consumer protection claims. The ultimate resolution of any proceeding and the timing of such resolution is uncertain and inherently difficult to predict. It is possible that the ultimate resolution of these matters, including those described below, if unfavorable, may be material to the consolidated financial position, consolidated results of operations, or consolidated cash flows of ~~Truist.~~Truist, or cause significant reputational consequences.

Truist establishes accruals for legal matters when potential losses associated with the actions become probable and the amount of loss can be reasonably estimated. There is no assurance that the ultimate resolution of these matters will not significantly exceed the amounts that Truist has accrued. Accruals for legal matters are based on management’s best judgment after consultation with counsel and others.

The Company estimates reasonably possible losses, in excess of amounts accrued, of up to approximately $200 million as of September 30, ~~2021.~~2022. This estimate isdoes not represent Truist’s maximum loss exposure, and actual losses may vary significantly. In addition, the matters underlying this estimate will change from time to time. Estimated losses are based upon currently available information and ~~involves~~involve considerable judgment, given that claims often include significant legal uncertainties, damages alleged by plaintiffs are often unspecified or overstated, discovery may not have started or may not be complete, and material facts may be disputed or unsubstantiated, among other factors. ~~In addition,~~

For certain matters, Truist may be unable to estimate the ~~matters underlying this estimate will change from time to time and actual losses may vary significantly from this estimate. As~~loss or range of loss, even if it believes that a ~~result, the Company does not believe that an estimate of~~loss is probable or reasonably possible, ~~losses can be made~~until developments in the case provide additional information sufficient to support such an estimate. Such matters are not accrued for ~~certain matters. Such matters~~and are not reflected in the estimate ~~provided herein.~~of reasonably possible losses.

The following is a description of a certain legal ~~proceeding~~proceedings in which Truist is involved:

Bickerstaff v. SunTrust Bank

This class action case was filed in the Fulton County State Court on July 12, 2010, and an amended complaint was filed on August 9, 2010. Plaintiff asserts that all overdraft fees charged to his account which related to debit card and ATM transactions are actually interest charges and therefore subject to the usury laws of Georgia. Plaintiff has brought claims for violations of civil and criminal usury laws, conversion, and money had and ~~received.~~received, and seeks damages on a class-wide basis, including refunds of challenged overdraft fees and pre-judgment interest. On October 6, 2017, the trial court granted plaintiff’s motion for class certification and defined the class as “Every Georgia citizen who had or has one or more accounts with SunTrust Bank and who, from July 12, 2006, to October 6, 2017 (i) had at least one overdraft of $500.00 or less resulting from an ATM or debit card transaction (the “Transaction”); (ii) paid any Overdraft Fees as a result of the Transaction; and (iii) did not receive a refund of those Fees,” and the granting of a certified class was affirmed on appeal. ~~On April 8, 2020, the~~The Company previously filed a motion ~~seeking~~to amend the class definition in which it sought to narrow the scope of ~~this~~the class and ~~on May 29, 2020, it filed a~~ renewed ~~motion~~motions to compel arbitration ofagainst certain class members, which the ~~claims of some of the class members.~~court found were premature. On ~~February 9, 2021,~~September 22, 2022, the trial court ~~denied both motions as premature but held~~entered a scheduling order holding that the ~~issues could be raised again~~court will consider such motions after ~~the conclusion of~~ discovery ~~which~~ is ~~currently underway.~~completed. The Company ~~believes~~continues to believe that the underlying claims are without merit.

United Services Automobile Association v. Truist Bank

USAA filed a lawsuit on July 29, 2022 against the Company in the United States District Court for the Eastern District of Texas alleging that the Company’s mobile remote deposit capture systems infringe certain patents held by USAA. The complaint seeks damages, including for alleged willful infringement and a corresponding request that the amount of actual damages be trebled, as well as injunctive and other equitable relief. The Company filed its answer and affirmative defenses on October 11, 2022, denying USAA’s claims, including its claims of willful infringement. Also on October 11, 2022, the Company filed a petition for inter partes review challenging the validity of one of the patents asserted in the lawsuit.

Truist Financial Corporation 27

NOTE 15. Fair Value Disclosures

Recurring Fair Value Measurements

Accounting standards define fair value as the price that would be received on the measurement date to sell an asset or the price paid to transfer a liability in the principal or most advantageous market available to the entity in an orderly transaction between market participants, with a three level measurement hierarchy:

•Level 1: Quoted prices for identical instruments in active markets

•Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets

•Level 3: Valuations derived from valuation techniques in which one or more significant inputs are unobservable

The following tables present fair value information for assets and liabilities measured at fair value on a recurring basis:


September 30, 2021 (Dollars in millions)		Total		Level 1		Level 2		Level 3		Netting Adjustments (1)
September 30, 2022 (Dollars in millions)												September 30, 2022 (Dollars in millions)	Total		Level 1		Level 2		Level 3		Netting Adjustments (1)
Assets:	Assets:											Assets:
Trading assets:	Trading assets:											Trading assets:
U.S. Treasury	U.S. Treasury	$	2,414	$	—	$	2,414	$	—	$	—	U.S. Treasury	$	1,243	$	—	$	1,243	$	—	$	—
GSE	GSE	184		—		184		—		—		GSE	408		—		408		—		—
Agency MBS - residential	Agency MBS - residential	973		—		973		—		—		Agency MBS - residential	1,041		—		1,041		—		—
Agency MBS - commercial	Agency MBS - commercial	5		—		5		—		—		Agency MBS - commercial	60		—		60		—		—
States and political subdivisions	States and political subdivisions	67		—		67		—		—		States and political subdivisions	393		—		393		—		—

Corporate and other debt securities	Corporate and other debt securities	1,031		—		1,031		—		—		Corporate and other debt securities	595		—		595		—		—
Loans	Loans	1,943		—		1,943		—		—		Loans	1,787		—		1,787		—		—
Other	Other	355		294		61		—		—		Other	337		278		59		—		—
Total trading assets	Total trading assets	6,972		294		6,678		—		—		Total trading assets	5,864		278		5,586		—		—
AFS securities:	AFS securities:											AFS securities:
U.S. Treasury	U.S. Treasury	9,697		—		9,697		—		—		U.S. Treasury	10,054		—		10,054		—		—
GSE	GSE	1,874		—		1,874		—		—		GSE	287		—		287		—		—
Agency MBS - residential	Agency MBS - residential	133,061		—		133,061		—		—		Agency MBS - residential	56,594		—		56,594		—		—
Agency MBS - commercial	Agency MBS - commercial	3,073		—		3,073		—		—		Agency MBS - commercial	2,486		—		2,486		—		—
States and political subdivisions	States and political subdivisions	458		—		458		—		—		States and political subdivisions	396		—		396		—		—
Non-agency MBS	Non-agency MBS	2,846		—		2,846		—		—		Non-agency MBS	3,138		—		3,138		—		—
Other	Other	29		—		29		—		—		Other	23		—		23		—		—
Total AFS securities	Total AFS securities	151,038		—		151,038		—		—		Total AFS securities	72,978		—		72,978		—		—
LHFS at fair value	LHFS at fair value	4,799		—		4,799		—		—		LHFS at fair value	1,868		—		1,868		—		—
MSRs at fair value		2,584		—		—		2,584		—
Loans and leases												Loans and leases	19		—		—		19		—
Loan servicing rights at fair value												Loan servicing rights at fair value	3,797		—		—		3,797		—
Other assets:	Other assets:											Other assets:
Derivative assets	Derivative assets	2,976		676		3,893		38		(1,631)		Derivative assets	1,140		397		3,001		6		(2,264)
Equity securities	Equity securities	1,026		940		86		—		—		Equity securities	887		783		104		—		—

Total assets	Total assets	$	169,395	$	1,910	$	166,494	$	2,622	$	(1,631)	Total assets	$	86,553	$	1,458	$	83,537	$	3,822	$	(2,264)
Liabilities:	Liabilities:											Liabilities:
Derivative liabilities	Derivative liabilities	$	601	$	304	$	3,132	$	28	$	(2,863)	Derivative liabilities	$	3,407	$	449	$	5,219	$	77	$	(2,338)
Securities sold short	Securities sold short	1,735		12		1,723		—		—		Securities sold short	1,905		297		1,608		—		—
Total liabilities	Total liabilities	$	2,336	$	316	$	4,855	$	28	$	(2,863)	Total liabilities	$	5,312	$	746	$	6,827	$	77	$	(2,338)

28 Truist Financial Corporation


December 31, 2020 (Dollars in millions)		Total		Level 1		Level 2		Level 3		Netting Adjustments (1)
December 31, 2021 (Dollars in millions)												December 31, 2021 (Dollars in millions)	Total		Level 1		Level 2		Level 3		Netting Adjustments (1)
Assets:	Assets:											Assets:
Trading assets:	Trading assets:											Trading assets:
U.S. Treasury	U.S. Treasury	$	793	$	—	$	793	$	—	$	—	U.S. Treasury	$	125	$	—	$	125	$	—	$	—
GSE	GSE	164		—		164		—		—		GSE	306		—		306		—		—
Agency MBS - residential	Agency MBS - residential	599		—		599		—		—		Agency MBS - residential	1,016		—		1,016		—		—
Agency MBS - commercial	Agency MBS - commercial	21		—		21		—		—		Agency MBS - commercial	13		—		13		—		—
States and political subdivisions	States and political subdivisions	34		—		34		—		—		States and political subdivisions	91		—		91		—		—

Corporate and other debt securities	Corporate and other debt securities	545		—		545		—		—		Corporate and other debt securities	738		—		738		—		—
Loans	Loans	1,586		—		1,586		—		—		Loans	1,791		—		1,791		—		—
Other	Other	130		123		7		—		—		Other	343		285		58		—		—
Total trading assets	Total trading assets	3,872		123		3,749		—		—		Total trading assets	4,423		285		4,138		—		—
AFS securities:	AFS securities:											AFS securities:
U.S. Treasury	U.S. Treasury	1,746		—		1,746		—		—		U.S. Treasury	9,795		—		9,795		—		—
GSE	GSE	1,917		—		1,917		—		—		GSE	1,698		—		1,698		—		—
Agency MBS - residential	Agency MBS - residential	113,541		—		113,541		—		—		Agency MBS - residential	134,042		—		134,042		—		—
Agency MBS - commercial	Agency MBS - commercial	3,057		—		3,057		—		—		Agency MBS - commercial	2,882		—		2,882		—		—
States and political subdivisions	States and political subdivisions	493		—		493		—		—		States and political subdivisions	420		—		420		—		—

Non-agency MBS												Non-agency MBS	4,258		—		4,258		—		—
Other	Other	34		—		34		—		—		Other	28		—		28		—		—
Total AFS securities	Total AFS securities	120,788		—		120,788		—		—		Total AFS securities	153,123		—		153,123		—		—
LHFS at fair value	LHFS at fair value	4,955		—		4,955		—		—		LHFS at fair value	3,544		—		3,544		—		—
MSRs at fair value		2,023		—		—		2,023		—
Loans and leases												Loans and leases	23		—		—		23		—
Loan servicing rights at fair value												Loan servicing rights at fair value	2,633		—		—		2,633		—
Other assets:	Other assets:											Other assets:
Derivative assets	Derivative assets	3,837		752		4,903		186		(2,004)		Derivative assets	2,370		887		3,110		30		(1,657)
Equity securities	Equity securities	1,054		996		58		—		—		Equity securities	1,066		967		99		—		—

Total assets	Total assets	$	136,529	$	1,871	$	134,453	$	2,209	$	(2,004)	Total assets	$	167,182	$	2,139	$	164,014	$	2,686	$	(1,657)
Liabilities:	Liabilities:											Liabilities:
Derivative liabilities	Derivative liabilities	$	555	$	386	$	3,263	$	14	$	(3,108)	Derivative liabilities	$	586	$	438	$	3,056	$	42	$	(2,950)
Securities sold short	Securities sold short	1,115		3		1,112		—		—		Securities sold short	1,731		8		1,723		—		—
Total liabilities	Total liabilities	$	1,670	$	389	$	4,375	$	14	$	(3,108)	Total liabilities	$	2,317	$	446	$	4,779	$	42	$	(2,950)

(1)Refer to “Note 16. Derivative Financial Instruments” for additional discussion on netting adjustments.

At September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, investments totaling ~~$490~~$394 million and ~~$387~~$440 million, respectively, have been excluded from the table above as they are valued based on net asset value as a practical expedient. These investments primarily consist of certain SBIC funds.

For additional information on the valuation techniques and significant inputs for Level 2 and Level 3 assets and liabilities that are measured at fair value on a recurring basis, see “Note 18. Fair Value Disclosures” of the Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Truist Financial Corporation 29

Activity for Level 3 assets and liabilities is summarized below:


Three Months Ended September 30, 2021 and 2020 (Dollars in millions)		Non-agency MBS		MSRs		Net Derivatives		Private Equity Investments
Balance at July 1, 2020		$	—	$	2,077	$	203	$	—
Total realized and unrealized gains (losses):
Included in earnings		—		(54)		128		—

Issuances		—		192		229		—

Settlements		—		(224)		(346)		—

Balance at September 30, 2020		$	—	$	1,991	$	214	$	—
Three Months Ended September 30, 2022 and 2021 (Dollars in millions)										Three Months Ended September 30, 2022 and 2021 (Dollars in millions)	Loans and Leases		Loan Servicing Rights		Net Derivatives
Balance at July 1, 2021	Balance at July 1, 2021	$	—	$	2,231	$	38	$	—	Balance at July 1, 2021	$	—	$	2,231	$	38
Total realized and unrealized gains (losses):	Total realized and unrealized gains (losses):									Total realized and unrealized gains (losses):
Included in earnings	Included in earnings	—		78		6		—		Included in earnings	—		78		6

Purchases	Purchases	—		303		—		—		Purchases	—		303		—
Issuances	Issuances	—		145		77		—		Issuances	—		145		77
Sales	Sales	—		(1)		—		—		Sales	—		(1)		—
Settlements	Settlements	—		(172)		(111)		—		Settlements	—		(172)		(111)

Balance at September 30, 2021	Balance at September 30, 2021	$	—	$	2,584	$	10	$	—	Balance at September 30, 2021	$	—	$	2,584	$	10
Change in unrealized gains (losses) included in earnings for the period, attributable to assets and liabilities still held at September 30, 2021		$	—	$	78	$	21	$	—
Balance at July 1, 2022										Balance at July 1, 2022	$	20	$	3,466	$	(36)
Total realized and unrealized gains (losses):										Total realized and unrealized gains (losses):
Included in earnings										Included in earnings	—		190		(61)

Nine Months Ended September 30, 2021 and 2020 (Dollars in millions)		Non-agency MBS		MSRs		Net Derivatives		Private Equity Investments
Purchases										Purchases	—		126		—
Issuances										Issuances	—		130		(30)
Sales										Sales	—		(6)		—
Settlements										Settlements	—		(109)		56
Other										Other	(1)		—		—

Balance at September 30, 2022										Balance at September 30, 2022	$	19	$	3,797	$	(71)
Change in unrealized gains (losses) included in earnings for the period, attributable to assets and liabilities still held at September 30, 2022										Change in unrealized gains (losses) included in earnings for the period, attributable to assets and liabilities still held at September 30, 2022	$	—	$	189	$	(48)

Nine Months Ended September 30, 2022 and 2021 (Dollars in millions)										Nine Months Ended September 30, 2022 and 2021 (Dollars in millions)	Loans and Leases		Loan Servicing Rights		Net Derivatives

Balance at January 1, 2020		$	368	$	2,618	$	19	$	440
Total realized and unrealized gains (losses):
Included in earnings		306		(616)		365		2
Included in unrealized net holding gains (losses) in OCI		(178)		—		—		—
Purchases		—		—		—		27
Issuances		—		523		655		—
Sales		(481)		—		—		—
Settlements		(15)		(534)		(825)		(21)

Transfers out of level 3 and other		—		—		—		(448)

Balance at September 30, 2020		$	—	$	1,991	$	214	$	—
Balance at January 1, 2021	Balance at January 1, 2021	$	—	$	2,023	$	172	$	—	Balance at January 1, 2021	$	—	$	2,023	$	172
Total realized and unrealized gains (losses):	Total realized and unrealized gains (losses):									Total realized and unrealized gains (losses):
Included in earnings	Included in earnings	—		260		(77)		—		Included in earnings	—		260		(77)

Purchases	Purchases	—		355		—		—		Purchases	—		355		—
Issuances	Issuances	—		532		254		—		Issuances	—		532		254
Sales	Sales	—		(1)		—		—		Sales	—		(1)		—
Settlements	Settlements	—		(585)		(339)		—		Settlements	—		(585)		(339)

Balance at September 30, 2021	Balance at September 30, 2021	$	—	$	2,584	$	10	$	—	Balance at September 30, 2021	$	—	$	2,584	$	10
Change in unrealized gains (losses) included in earnings for the period, attributable to assets and liabilities still held at September 30, 2021		$	—	$	260	$	16	$	—
Balance at January 1, 2022										Balance at January 1, 2022	$	23	$	2,633	$	(12)
Total realized and unrealized gains (losses):										Total realized and unrealized gains (losses):
Included in earnings										Included in earnings	—		807		(324)

Purchases										Purchases	—		321		—
Issuances										Issuances	—		411		10
Sales										Sales	—		(7)		—
Settlements										Settlements	—		(368)		255

Other										Other	(4)		—		—
Balance at September 30, 2022										Balance at September 30, 2022	$	19	$	3,797	$	(71)
Change in unrealized gains (losses) included in earnings for the period, attributable to assets and liabilities still held at September 30, 2022										Change in unrealized gains (losses) included in earnings for the period, attributable to assets and liabilities still held at September 30, 2022	$	—	$	807	$	(55)
Primary income statement location of realized gains (losses) included in earnings	Primary income statement location of realized gains (losses) included in earnings	Securities gains (losses)		Residential mortgage income and Commercial real estate related income		Residential mortgage income and Commercial real estate related income		Other income		Primary income statement location of realized gains (losses) included in earnings	Other income		Residential mortgage income and Commercial mortgage income		Residential mortgage income and Commercial mortgage income

During 2020, Truist sold non-agency MBS previously categorized as Level 3 that represented ownership interests in various tranches of Re-REMIC trusts. Additionally during 2020, as a result of a change in control of the funds’ manager, the Company deconsolidated certain SBIC funds for which it had previously concluded that it was the primary beneficiary.

~~Refer to “Note 7. Loan Servicing” for additional information on valuation techniques and inputs for MSRs.~~

~~30 Truist Financial Corporation~~

Fair Value Option

The following table details the fair value and UPB of ~~LHFS~~certain loans that were elected to be measured at fair ~~value. Trading loans, included in other trading assets, were also elected to be measured at fair value.~~value:


		September 30, 2021						December 31, 2020							September 30, 2022						December 31, 2021
(Dollars in millions)	(Dollars in millions)	Fair Value		UPB		Difference		Fair Value		UPB		Difference		(Dollars in millions)	Fair Value		UPB		Difference		Fair Value		UPB		Difference

Trading loans	Trading loans	$	1,943	$	1,912	$	31	$	1,586	$	1,619	$	(33)	Trading loans	$	1,787	$	1,906	$	(119)	$	1,791	$	1,784	$	7
Loans and leases														Loans and leases	19		20		(1)		23		35		(12)
LHFS at fair value	LHFS at fair value	4,799		4,700		99		4,955		4,736		219		LHFS at fair value	1,868		1,931		(63)		3,544		3,450		94

30 Truist Financial Corporation

Nonrecurring Fair Value Measurements

The following table provides information about certain assets measured at fair value on a nonrecurring basis still held as of period end. The carrying values represent end of period values, which approximate the fair value measurements that occurred on the various measurement dates throughout the period. These assets are considered to be Level 3 assets.


(Dollars in millions)	(Dollars in millions)	Sep 30, 2021		Dec 31, 2020		(Dollars in millions)	Sep 30, 2022		Dec 31, 2021
Carrying value:	Carrying value:					Carrying value:
LHFS	LHFS	$	255	$	979	LHFS	$	361	$	101
Loans and leases	Loans and leases	122		142		Loans and leases	429		443
Other	Other	102		92		Other	64		100

The following table provides information about valuation adjustments for certain assets measured at fair value on a nonrecurring basis. The valuation adjustments represent the amounts recorded during the period regardless of whether the asset is still held at period end.


Nine Months Ended September 30, (Dollars in millions)		2021		2020
							Nine Months Ended September 30,
(Dollars in millions)						(Dollars in millions)	2022		2021
Valuation adjustments:	Valuation adjustments:					Valuation adjustments:
LHFS	LHFS	$	(27)	$	(52)	LHFS	$	(9)	$	(27)
Loans and leases	Loans and leases	(41)		(38)		Loans and leases	(280)		(349)
Other	Other	(156)		(137)		Other	(440)		(156)

LHFS with valuation adjustments in the table above consisted primarily of residential mortgages and commercial loans that were valued using market prices and measured at ~~the lower of cost or market. LHFS as of December 31, 2020 includes the small ticket loan and lease portfolio that was sold during the first quarter of 2021.~~LOCOM. The table above excludes ~~$79~~$75 million and ~~$125 million~~$1.2 billion of LHFS carried at cost at September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, that did not require a valuation adjustment during the period. The remainder of LHFS is carried at fair value. The Company held $76 million in nonperforming LHFS at September 30, 2021 and $5 million of nonperforming LHFS at December 31, 2020. LHFS that were 90 days or more past due and still accruing interest were not material at September 30, 2021.

Loans and leases consists of larger commercial loans and leases that ~~do not share similar risk characteristics. These~~are collateral-dependent and other secured loans and leases that have been charged-off to the fair value of the collateral. Valuation adjustments for loans and leases are ~~collateral dependent and may be subject to liquidity adjustments.~~primarily recorded in the Provision for credit losses in the Consolidated statement of income. Refer to “Note 1. Basis of Presentation” in Truist’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 for additional discussion of individually evaluated loans and leases.

Other includes foreclosed real estate, other foreclosed property, ROU assets, premises and equipment, and OREO, and consists primarily of residential homes, commercial properties, vacant lots, and automobiles. ROU assets are measured based on the fair value of the assets, which considers the potential for sublease income. The remaining assets are measured at ~~the lower of cost or fair value,~~LOCOM, less costs to sell.

~~Truist Financial Corporation 31~~

Financial Instruments Not Recorded at Fair Value

For financial instruments not recorded at fair value, estimates of fair value are based on relevant market data and information about the instruments. Values obtained relate to trading without regard to any premium or discount that may result from concentrations of ownership, possible tax ramifications, estimated transaction costs that may result from bulk sales or the relationship between various instruments.

An active market does not exist for certain financial instruments. Fair value estimates for these instruments are based on current economic conditions and interest rate risk characteristics, loss experience and other factors. Many of these estimates involve uncertainties and matters of significant judgment and cannot be determined with precision. Therefore, the fair value estimates in many instances cannot be substantiated by comparison to independent markets. In addition, changes in assumptions could significantly affect these fair value estimates. Financial assets and liabilities not recorded at fair value are summarized below:


			September 30, 2021				December 31, 2020						September 30, 2022				December 31, 2021
(Dollars in millions)	(Dollars in millions)	Fair Value Hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value		(Dollars in millions)	Fair Value Hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value

Financial assets:	Financial assets:										Financial assets:

HTM securities											HTM securities	Level 2	$	58,754	$	48,975	$	1,494	$	1,495
Loans and leases HFI, net of ALLL	Loans and leases HFI, net of ALLL	Level 3	$	280,820	$	281,198	$	293,899	$	295,461	Loans and leases HFI, net of ALLL	Level 3	310,111		301,437		285,055		284,914
Financial liabilities:	Financial liabilities:										Financial liabilities:
Time deposits	Time deposits	Level 2	16,675		16,810		21,941		22,095		Time deposits	Level 2	14,454		14,521		15,886		16,017
Long-term debt	Long-term debt	Level 2	37,837		38,491		39,597		40,864		Long-term debt	Level 2	31,172		29,568		35,913		36,251

The carrying value of the RUFC, which approximates the fair value of unfunded commitments, was ~~$276~~$250 million and ~~$364~~$260 million at September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

32 Truist Financial Corporation 31

NOTE 16. Derivative Financial Instruments

Impact of Derivatives on the Consolidated Balance Sheets

The following table presents the gross notional amounts and estimated fair value of derivative instruments employed by the ~~Company. Truist held 0 cash flow hedges as of September 30, 2021 and December 31, 2020.~~Company:


		September 30, 2021						December 31, 2020												September 30, 2022									December 31, 2021
		Notional Amount		Fair Value				Notional Amount				Fair Value								Notional Amount			Fair Value						Notional Amount			Fair Value
(Dollars in millions)	(Dollars in millions)			Assets		Liabilities				Assets				Liabilities		(Dollars in millions)						Assets			Liabilities						Assets			Liabilities
Cash flow hedges:																		Cash flow hedges:
Interest rate contracts:																		Interest rate contracts:

Swaps hedging commercial loans																		Swaps hedging commercial loans		$	7,250		$	—		$	—		$	—		$	—		$	—
Fair value hedges:	Fair value hedges:																	Fair value hedges:
Interest rate contracts:	Interest rate contracts:																	Interest rate contracts:

Swaps hedging long-term debt																		Swaps hedging long-term debt		14,893			—			(80)			12,690			—			(6)

Swaps hedging AFS securities	Swaps hedging AFS securities	$	24,006	$	—	$	(4)			$	17,765			$	—			$	—		Swaps hedging AFS securities	7,097			—			—			12,711			—			(2)

Total																		Total		21,990			—			(80)			25,401			—			(8)
Not designated as hedges:	Not designated as hedges:																	Not designated as hedges:
Client-related and other risk management:	Client-related and other risk management:																	Client-related and other risk management:
Interest rate contracts:	Interest rate contracts:																	Interest rate contracts:
Swaps	Swaps	149,428		2,103		(731)		156,338				3,399				(862)		Swaps		154,257			540			(2,830)			150,223			1,716			(733)

Options	Options	24,939		36		(21)		25,386				45				(18)		Options		28,266			160			(166)			23,659			43			(30)
Forward commitments	Forward commitments	8,426		7		(9)		4,847				9				(11)		Forward commitments		2,435			27			(5)			2,404			2			(5)
Other	Other	2,582		—		—		2,573				—				—		Other		4,925			1			(1)			2,927			—			—
Equity contracts	Equity contracts	30,431		1,484		(1,779)		31,152				1,856				(2,297)		Equity contracts		37,582			653			(938)			34,232			1,582			(2,089)
Credit contracts:	Credit contracts:																	Credit contracts:
Trading assets																		Trading assets		120			—			—			—			—			—
Loans and leases	Loans and leases	815		—		(2)		1,056				—				(5)		Loans and leases		519			—			—			570			—			(2)
Risk participation agreements	Risk participation agreements	8,413		1		(4)		7,802				1				(13)		Risk participation agreements		6,342			—			(1)			8,145			—			(4)
Total return swaps	Total return swaps	1,424		1		(27)		1,296				13				(33)		Total return swaps		1,525			87			—			1,445			3			(19)

Foreign exchange contracts	Foreign exchange contracts	16,224		175		(145)		12,066				189				(219)		Foreign exchange contracts		18,793			763			(725)			16,102			160			(156)
Commodity	Commodity	4,536		697		(689)		2,872				130				(124)		Commodity		6,142			834			(840)			4,641			475			(468)

Total	Total	247,218		4,504		(3,407)		245,388				5,642				(3,582)		Total		260,906			3,065			(5,506)			244,348			3,981			(3,506)
Mortgage banking:	Mortgage banking:																	Mortgage banking:
Interest rate contracts:	Interest rate contracts:																	Interest rate contracts:
Swaps	Swaps	634		—		—		687				—				—		Swaps		572			—			—			441			—			—

Interest rate lock commitments	Interest rate lock commitments	4,928		38		(16)		8,609				186				(3)		Interest rate lock commitments		1,869			6			(61)			4,163			30			(7)
When issued securities, forward rate agreements and forward commitments	When issued securities, forward rate agreements and forward commitments	9,082		63		(2)		11,691				6				(73)		When issued securities, forward rate agreements and forward commitments		3,716			158			—			6,913			7			(15)
Other	Other	308		1		—		466				—				—		Other		106			1			—			424			1			—

Total	Total	14,952		102		(18)		21,453				192				(76)		Total		6,263			165			(61)			11,941			38			(22)
MSRs:	MSRs:																	MSRs:
Interest rate contracts:	Interest rate contracts:																	Interest rate contracts:
Swaps	Swaps	38,329		—		(3)		36,161				—				(5)		Swaps		22,327			10			—			12,837			—			—

Options	Options	101		1		—		101				—				—		Options		13,599			160			(47)			101			1			—
When issued securities, forward rate agreements and forward commitments	When issued securities, forward rate agreements and forward commitments	3,644		—		(32)		1,314				7				—		When issued securities, forward rate agreements and forward commitments		2,470			3			(48)			3,927			7			—
Other	Other	1,682		—		—		760				—				—		Other		1,265			1			(3)			2,017			—			—
Total	Total	43,756		1		(35)		38,336				7				(5)		Total		39,661			174			(98)			18,882			8			—
Total derivatives not designated as hedges	Total derivatives not designated as hedges	305,926		4,607		(3,460)		305,177				5,841				(3,663)		Total derivatives not designated as hedges		306,830			3,404			(5,665)			275,171			4,027			(3,528)
Total derivatives	Total derivatives	$	329,932	4,607		(3,464)		$	322,942			5,841				(3,663)		Total derivatives		$	336,070		3,404			(5,745)			$	300,572		4,027			(3,536)
Gross amounts in the Consolidated Balance Sheets:	Gross amounts in the Consolidated Balance Sheets:																	Gross amounts in the Consolidated Balance Sheets:
Amounts subject to master netting arrangements	Amounts subject to master netting arrangements			(1,314)		1,314						(1,561)				1,561		Amounts subject to master netting arrangements					(1,621)			1,621						(1,312)			1,312
Cash collateral (received) posted for amounts subject to master netting arrangements	Cash collateral (received) posted for amounts subject to master netting arrangements			(317)		1,549						(443)				1,547		Cash collateral (received) posted for amounts subject to master netting arrangements					(643)			717						(345)			1,638

Net amount	Net amount			$	2,976	$	(601)					$	3,837			$	(555)	Net amount					$	1,140		$	(3,407)					$	2,370		$	(586)

32 Truist Financial Corporation 33

The following table presents the offsetting of derivative instruments including financial instrument collateral related to legally enforceable master netting agreements and amounts held or pledged as collateral. U.S. GAAP does not permit netting of non-cash collateral balances in the Consolidated Balance Sheets:


September 30, 2021 (Dollars in millions)		Gross Amount		Amount Offset		Net Amount in Consolidated Balance Sheets		Held/Pledged Financial Instruments		Net Amount
September 30, 2022 (Dollars in millions)												September 30, 2022 (Dollars in millions)	Gross Amount		Amount Offset		Net Amount in Consolidated Balance Sheets		Held/Pledged Financial Instruments		Net Amount
Derivative assets:	Derivative assets:											Derivative assets:
Derivatives subject to master netting arrangement or similar arrangement	Derivatives subject to master netting arrangement or similar arrangement	$	3,714	$	(1,631)	$	2,083	$	(3)	$	2,080	Derivatives subject to master netting arrangement or similar arrangement	$	2,907	$	(1,915)	$	992	$	—	$	992
Derivatives not subject to master netting arrangement or similar arrangement	Derivatives not subject to master netting arrangement or similar arrangement	521		—		521		—		521		Derivatives not subject to master netting arrangement or similar arrangement	100		—		100		—		100
Exchange traded derivatives	Exchange traded derivatives	372		—		372		—		372		Exchange traded derivatives	397		(349)		48		—		48
Total derivative assets	Total derivative assets	$	4,607	$	(1,631)	$	2,976	$	(3)	$	2,973	Total derivative assets	$	3,404	$	(2,264)	$	1,140	$	—	$	1,140
Derivative liabilities:	Derivative liabilities:											Derivative liabilities:
Derivatives subject to master netting arrangement or similar arrangement	Derivatives subject to master netting arrangement or similar arrangement	$	(3,221)	$	2,863	$	(358)	$	53	$	(305)	Derivatives subject to master netting arrangement or similar arrangement	$	(4,538)	$	1,989	$	(2,549)	$	28	$	(2,521)
Derivatives not subject to master netting arrangement or similar arrangement	Derivatives not subject to master netting arrangement or similar arrangement	(242)		—		(242)		—		(242)		Derivatives not subject to master netting arrangement or similar arrangement	(758)		—		(758)		—		(758)
Exchange traded derivatives	Exchange traded derivatives	(1)		—		(1)		—		(1)		Exchange traded derivatives	(449)		349		(100)		—		(100)
Total derivative liabilities	Total derivative liabilities	$	(3,464)	$	2,863	$	(601)	$	53	$	(548)	Total derivative liabilities	$	(5,745)	$	2,338	$	(3,407)	$	28	$	(3,379)

December 31, 2020 (Dollars in millions)		Gross Amount		Amount Offset		Net Amount in Consolidated Balance Sheets		Held/Pledged Financial Instruments		Net Amount
December 31, 2021 (Dollars in millions)												December 31, 2021 (Dollars in millions)	Gross Amount		Amount Offset		Net Amount in Consolidated Balance Sheets		Held/Pledged Financial Instruments		Net Amount
Derivative assets:	Derivative assets:											Derivative assets:
Derivatives subject to master netting arrangement or similar arrangement	Derivatives subject to master netting arrangement or similar arrangement	$	4,383	$	(1,618)	$	2,765	$	(2)	$	2,763	Derivatives subject to master netting arrangement or similar arrangement	$	2,752	$	(1,221)	$	1,531	$	(1)	$	1,530
Derivatives not subject to master netting arrangement or similar arrangement	Derivatives not subject to master netting arrangement or similar arrangement	705		—		705		(1)		704		Derivatives not subject to master netting arrangement or similar arrangement	388		—		388		—		388
Exchange traded derivatives	Exchange traded derivatives	753		(386)		367		—		367		Exchange traded derivatives	887		(436)		451		—		451
Total derivative assets	Total derivative assets	$	5,841	$	(2,004)	$	3,837	$	(3)	$	3,834	Total derivative assets	$	4,027	$	(1,657)	$	2,370	$	(1)	$	2,369
Derivative liabilities:	Derivative liabilities:											Derivative liabilities:
Derivatives subject to master netting arrangement or similar arrangement	Derivatives subject to master netting arrangement or similar arrangement	$	(3,103)	$	2,722	$	(381)	$	35	$	(346)	Derivatives subject to master netting arrangement or similar arrangement	$	(2,873)	$	2,514	$	(359)	$	66	$	(293)
Derivatives not subject to master netting arrangement or similar arrangement	Derivatives not subject to master netting arrangement or similar arrangement	(174)		—		(174)		—		(174)		Derivatives not subject to master netting arrangement or similar arrangement	(225)		—		(225)		—		(225)
Exchange traded derivatives	Exchange traded derivatives	(386)		386		—		—		—		Exchange traded derivatives	(438)		436		(2)		—		(2)
Total derivative liabilities	Total derivative liabilities	$	(3,663)	$	3,108	$	(555)	$	35	$	(520)	Total derivative liabilities	$	(3,536)	$	2,950	$	(586)	$	66	$	(520)

The following table presents the carrying value of hedged items in fair value hedging relationships:


		September 30, 2021						December 31, 2020							September 30, 2022						December 31, 2021
				Hedge Basis Adjustment						Hedge Basis Adjustment							Hedge Basis Adjustment						Hedge Basis Adjustment
(Dollars in millions)	(Dollars in millions)	Hedged Asset / Liability Basis		Items Currently Designated		Discontinued Hedges		Hedged Asset / Liability Basis		Items Currently Designated		Discontinued Hedges		(Dollars in millions)	Hedged Asset / Liability Basis		Items Currently Designated		Discontinued Hedges		Hedged Asset / Liability Basis		Items Currently Designated		Discontinued Hedges

AFS securities (1)	AFS securities (1)	$	116,770	$	(495)	$	43	$	100,988	$	(33)	$	50	AFS securities (1)	$	39,822	$	(662)	$	(4)	$	108,758	$	(400)	$	(150)
Loans and leases	Loans and leases	394		—		16		470		—		18		Loans and leases	361		—		10		382		—		12

Long-term debt	Long-term debt	22,490		—		700		27,725		—		930		Long-term debt	24,456		(839)		240		27,361		(137)		629

(1)The amortized cost of AFS securities was ~~$117.8~~$47.2 billion at September 30, ~~2021~~2022 and ~~$99.4~~$110.6 billion at December 31, ~~2020.~~2021.

34 Truist Financial Corporation 33

Impact of Derivatives on the Consolidated Statements of Income and Comprehensive Income

Derivatives Designated as Hedging Instruments under GAAP

No portion of the change in fair value of derivatives designated as hedges has been excluded from effectiveness testing.

The following table summarizes amounts related to cash flow hedges, which consist of interest rate ~~contracts.~~contracts:


											Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)										(Dollars in millions)	2022		2021		2022		2021
Pre-tax gain (loss) recognized in OCI:										Pre-tax gain (loss) recognized in OCI:
Commercial loans										Commercial loans	$	(182)	$	—	$	(123)	$	—

		Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)		2021		2020		2021		2020

Total										Total	$	(182)	$	—	$	(123)	$	—
Pre-tax gain (loss) reclassified from AOCI into interest expense:	Pre-tax gain (loss) reclassified from AOCI into interest expense:									Pre-tax gain (loss) reclassified from AOCI into interest expense:

Deposits	Deposits	$	—	$	(2)	$	(2)	$	(8)	Deposits	$	—	$	—	$	—	$	(2)
Short-term borrowings	Short-term borrowings	—		(5)		(12)		(13)		Short-term borrowings	—		—		—		(12)
Long-term debt	Long-term debt	(7)		(3)		(17)		(18)		Long-term debt	(1)		(7)		(12)		(17)

Total	Total	$	(7)	$	(10)	$	(31)	$	(39)	Total	$	(1)	$	(7)	$	(12)	$	(31)
Pre-tax gain (loss) reclassified from AOCI into other expense: (1)	Pre-tax gain (loss) reclassified from AOCI into other expense: (1)									Pre-tax gain (loss) reclassified from AOCI into other expense: (1)
Deposits	Deposits	$	—	$	—	$	(12)	$	—	Deposits	$	—	$	—	$	—	$	(12)
Short-term borrowings	Short-term borrowings	—		—		(20)		—		Short-term borrowings	—		—		—		(20)
Long-term debt	Long-term debt	—		—		(4)		—		Long-term debt	—		—		—		(4)

Total	Total	$	—	$	—	$	(36)	$	—	Total	$	—	$	—	$	—	$	(36)

(1)Represents the accelerated amortization of amounts reclassified from AOCI, where management determined that the forecasted transaction is probable of not occurring.

The following table summarizes the impact on net interest income related to fair value hedges:


		Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020			(Dollars in millions)	2022		2021		2022		2021

AFS securities:	AFS securities:										AFS securities:
Amounts related to interest settlements	Amounts related to interest settlements	$	(15)	$	—	$	(39)	$	—		Amounts related to interest settlements	$	36	$	(15)	$	40	$	(39)
Recognized on derivatives	Recognized on derivatives	81		—		442		—			Recognized on derivatives	157		81		631		442
Recognized on hedged items	Recognized on hedged items	(83)		(3)		(448)		(7)			Recognized on hedged items	(142)		(83)		(586)		(448)
Net income (expense) recognized	Net income (expense) recognized	(17)		(3)		(45)		(7)			Net income (expense) recognized	51		(17)		85		(45)
Loans and leases:	Loans and leases:										Loans and leases:
Amounts related to interest settlements		—		(1)		—		(1)
Recognized on derivatives		—		—		—		(3)

Recognized on hedged items	Recognized on hedged items	(1)		—		(2)		1			Recognized on hedged items	(1)		(1)		(2)		(2)
Net income (expense) recognized	Net income (expense) recognized	(1)		(1)		(2)		(3)			Net income (expense) recognized	(1)		(1)		(2)		(2)

Long-term debt:	Long-term debt:										Long-term debt:
Amounts related to interest settlements	Amounts related to interest settlements	—		78		—		182			Amounts related to interest settlements	(23)		—		(4)		—
Recognized on derivatives	Recognized on derivatives	—		(99)		—		831			Recognized on derivatives	(445)		—		(912)		—
Recognized on hedged items	Recognized on hedged items	73		112		227		(817)			Recognized on hedged items	482		73		1,050		227
Net income (expense) recognized	Net income (expense) recognized	73		91		227		196			Net income (expense) recognized	14		73		134		227
Net income (expense) recognized, total	Net income (expense) recognized, total	$	55	$	87	$	180	$	186		Net income (expense) recognized, total	$	64	$	55	$	217	$	180

34 Truist Financial Corporation

The following table presents information about the Company’s terminated cash flow and fair value hedges:


(Dollars in millions)	(Dollars in millions)	Sep 30, 2021		Dec 31, 2020		(Dollars in millions)	Sep 30, 2022		Dec 31, 2021

Cash flow hedges:	Cash flow hedges:					Cash flow hedges:

Net unrecognized after-tax gain (loss) on terminated hedges recorded in AOCI (to be recognized in earnings through 2022)		$	(13)	$	(64)
Net unrecognized after-tax gain (loss) on active hedges recorded in AOCI						Net unrecognized after-tax gain (loss) on active hedges recorded in AOCI	$	(118)	$	—
Net unrecognized after-tax gain (loss) on terminated hedges recorded in AOCI (to be recognized in earnings through 2029)						Net unrecognized after-tax gain (loss) on terminated hedges recorded in AOCI (to be recognized in earnings through 2029)	24		(9)
Estimated portion of net after-tax gain (loss) on terminated hedges to be reclassified from AOCI into earnings during the next 12 months	Estimated portion of net after-tax gain (loss) on terminated hedges to be reclassified from AOCI into earnings during the next 12 months	(13)		(42)		Estimated portion of net after-tax gain (loss) on terminated hedges to be reclassified from AOCI into earnings during the next 12 months	(11)		(9)

Maximum time period over which Truist is hedging a portion of the variability in future cash flows for forecasted transactions excluding those transactions relating to the payment of variable interest on existing instruments						Maximum time period over which Truist is hedging a portion of the variability in future cash flows for forecasted transactions excluding those transactions relating to the payment of variable interest on existing instruments	5 years		N/A
Fair value hedges:	Fair value hedges:					Fair value hedges:
Unrecognized pre-tax net gain (loss) on terminated hedges (to be recognized as interest primarily through 2029)		$	641	$	862
Unrecognized pre-tax net gain (loss) on terminated hedges (to be recognized as interest primarily through 2030) (1)						Unrecognized pre-tax net gain (loss) on terminated hedges (to be recognized as interest primarily through 2030) (1)	$	703	$	767
Portion of pre-tax net gain (loss) on terminated hedges to be recognized as a change in interest during the next 12 months	Portion of pre-tax net gain (loss) on terminated hedges to be recognized as a change in interest during the next 12 months	223		292		Portion of pre-tax net gain (loss) on terminated hedges to be recognized as a change in interest during the next 12 months	173		231

(1)Includes deferred gains that are recorded in AOCI as a result of the reclassification to HTM of previously hedged securities of $469 million at September 30, 2022.

~~Truist Financial Corporation 35~~

Derivatives Not Designated as Hedging Instruments under GAAP

The Company also enters into derivatives that are not designated as accounting hedges under GAAP to economically hedge certain risks as well as in a trading capacity with its clients.

The following table presents pre-tax gain (loss) recognized in income for derivative instruments not designated as hedges:


			Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,					Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	Income Statement Location	2021		2020		2021		2020			(Dollars in millions)	Income Statement Location	2022		2021		2022		2021

Client-related and other risk management:	Client-related and other risk management:											Client-related and other risk management:
Interest rate contracts	Interest rate contracts	Investment banking and trading income and other income	$	28	$	14	$	142	$	(13)		Interest rate contracts	Investment banking and trading income and other income	$	59	$	28	$	187	$	142
Foreign exchange contracts	Foreign exchange contracts	Investment banking and trading income and other income	73		(50)		107		31			Foreign exchange contracts	Investment banking and trading income and other income	202		73		381		107
Equity contracts	Equity contracts	Investment banking and trading income and other income	2		3		(18)		(4)			Equity contracts	Investment banking and trading income and other income	(57)		2		(50)		(18)
Credit contracts	Credit contracts	Investment banking and trading income and other income	13		(68)		(48)		238			Credit contracts	Investment banking and trading income and other income	(7)		13		84		(48)
Commodity contracts	Commodity contracts	Investment banking and trading income	1		1		6		5			Commodity contracts	Investment banking and trading income	9		1		9		6
Mortgage banking:	Mortgage banking:											Mortgage banking:
Interest rate contracts	Interest rate contracts	Residential mortgage income	(18)		(137)		(15)		(285)			Interest rate contracts	Residential mortgage income	94		(18)		572		(15)
Interest rate contracts	Interest rate contracts	Commercial real estate related income	—		1		(1)		1			Interest rate contracts	Commercial mortgage income	6		—		5		(1)
MSRs:	MSRs:											MSRs:
Interest rate contracts	Interest rate contracts	Residential mortgage income	(48)		(3)		(162)		534			Interest rate contracts	Residential mortgage income	(175)		(48)		(789)		(162)
Interest rate contracts	Interest rate contracts	Commercial real estate related income	(1)		—		(8)		22			Interest rate contracts	Commercial mortgage income	(9)		(1)		(23)		(8)
Total	Total		$	50	$	(239)	$	3	$	529		Total		$	122	$	50	$	376	$	3

Credit Derivative Instruments

As part of the Company’s corporate and investment banking business, the Company enters into contracts that are, in form or substance, written guarantees; specifically, risk participations, TRS, and credit default swaps. The Company accounts for these contracts as derivatives.

Truist has entered into risk participation agreements to share the credit exposure with other financial institutions on client-related interest rate derivative contracts. Under these agreements, the Company has guaranteed payment to a dealer counterparty in the event the counterparty experiences a loss on the derivative due to a failure to pay by the counterparty’s client. The Company manages its payment risk on its risk participations by monitoring the creditworthiness of the underlying client through the normal credit review process that the Company would have performed had it entered into a derivative directly with the obligors. At September 30, ~~2021,~~2022, the remaining terms on these risk participations ranged from less than one year to 1016 years. The potential future exposure represents the Company’s maximum estimated exposure to written risk participations, as measured by projecting a maximum value of the guaranteed derivative instruments based on scenario simulations and assuming 100% default by all obligors on the maximum value.

Truist Financial Corporation 35

The Company has also entered into TRS contracts on ~~loans.~~loans and bonds. To mitigate its credit risk, the Company typically receives initial margin from the counterparty upon entering into the TRS and variation margin if the fair value of the underlying reference assets deteriorates. For additional information on the Company’s TRS contracts, see “Note 14. Commitments and Contingencies.”

The Company enters into credit default swaps to hedge credit risk associated with certain loans and leases. The Company accounts for these contracts as derivatives, and accordingly, recognizes these contracts at fair value.

The following table presents additional information related to interest rate derivative risk participation agreements and total return swaps:

(Dollars in millions)

Sep 30, 2021

Dec 31, 2020

(Dollars in millions)

Sep 30, 2022

Dec 31, 2021

Risk participation agreements:

Maximum potential amount of exposure

563

530

Maximum potential amount of exposure

260

521

Total return swaps:

Cash collateral held

292

374

Cash collateral held

406

290

~~36 Truist Financial Corporation~~

The following table summarizes collateral positions with counterparties:


(Dollars in millions)	(Dollars in millions)	Sep 30, 2021		Dec 31, 2020		(Dollars in millions)	Sep 30, 2022		Dec 31, 2021

Dealer and other counterparties:	Dealer and other counterparties:					Dealer and other counterparties:
Cash and other collateral received from counterparties	Cash and other collateral received from counterparties	$	319	$	446	Cash and other collateral received from counterparties	$	591	$	346
Derivatives in a net gain position secured by collateral received	Derivatives in a net gain position secured by collateral received	474		585		Derivatives in a net gain position secured by collateral received	680		506
Unsecured positions in a net gain with counterparties after collateral postings	Unsecured positions in a net gain with counterparties after collateral postings	155		49		Unsecured positions in a net gain with counterparties after collateral postings	89		143
Cash collateral posted to dealer counterparties		1,603		1,524
Cash collateral posted to counterparties						Cash collateral posted to counterparties	746		1,704
Derivatives in a net loss position secured by collateral	Derivatives in a net loss position secured by collateral	1,703		1,604		Derivatives in a net loss position secured by collateral	840		2,591
Additional collateral that would have been posted had the Company’s credit ratings dropped below investment grade	Additional collateral that would have been posted had the Company’s credit ratings dropped below investment grade	5		3		Additional collateral that would have been posted had the Company’s credit ratings dropped below investment grade	—		3
Central counterparties clearing:	Central counterparties clearing:					Central counterparties clearing:
Cash collateral, including initial margin, posted to central clearing parties	Cash collateral, including initial margin, posted to central clearing parties	37		172		Cash collateral, including initial margin, posted to central clearing parties	52		31
Derivatives in a net loss position	Derivatives in a net loss position	32		90		Derivatives in a net loss position	18		18
Derivatives in a net gain position	Derivatives in a net gain position	18		5		Derivatives in a net gain position	124		—
Securities pledged to central counterparties clearing	Securities pledged to central counterparties clearing	1,193		1,281		Securities pledged to central counterparties clearing	782		904

NOTE 17. Computation of EPS

Basic and diluted EPS calculations are presented in the following table:


		Three Months Ended September 30,				Nine Months Ended September 30,
											Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions, except per share data, shares in thousands)	(Dollars in millions, except per share data, shares in thousands)	2021		2020		2021		2020		(Dollars in millions, except per share data, shares in thousands)	2022		2021		2022		2021
Net income available to common shareholders	Net income available to common shareholders	$	1,616	$	1,068	$	4,509	$	2,956	Net income available to common shareholders	$	1,536	$	1,616	$	4,317	$	4,509
Weighted average number of common shares	Weighted average number of common shares	1,334,825		1,347,916		1,339,558		1,346,605		Weighted average number of common shares	1,326,539		1,334,825		1,328,569		1,339,558
Effect of dilutive outstanding equity-based awards	Effect of dilutive outstanding equity-based awards	12,029		10,206		12,154		10,569		Effect of dilutive outstanding equity-based awards	10,120		12,029		10,502		12,154
Weighted average number of diluted common shares	Weighted average number of diluted common shares	1,346,854		1,358,122		1,351,712		1,357,174		Weighted average number of diluted common shares	1,336,659		1,346,854		1,339,071		1,351,712
Basic EPS	Basic EPS	$	1.21	$	0.79	$	3.37	$	2.20	Basic EPS	$	1.16	$	1.21	$	3.25	$	3.37
Diluted EPS	Diluted EPS	$	1.20	$	0.79	$	3.34	$	2.18	Diluted EPS	$	1.15	$	1.20	$	3.22	$	3.34
Anti-dilutive awards	Anti-dilutive awards	5		1,647		3		3,267		Anti-dilutive awards	—		5		85		3

NOTE 18. Operating Segments

Truist operates and measures business activity across 3three segments: ~~Consumer Banking~~CB&W, C&CB, and ~~Wealth, Corporate and Commercial Banking, and Insurance Holdings,~~IH, with functional activities included in ~~Other, Treasury and Corporate.~~OT&C. The Company’s business segment structure is based on the manner in which financial information is evaluated by management as well as the products and services provided or the type of client served. For additional information, see “Note 21. Operating Segments” of the Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

36 Truist Financial Corporation 37

The following table presents results by segment:


Three Months Ended September 30, (Dollars in millions)	Three Months Ended September 30, (Dollars in millions)	CB&W				C&CB				IH				OT&C (1)				Total				Three Months Ended September 30, (Dollars in millions)	CB&W				C&CB				IH				OT&C (1)				Total
		2021		2020		2021		2020		2021		2020		2021		2020		2021		2020			2022		2021		2022		2021		2022		2021		2022		2021		2022		2021
Net interest income (expense)	Net interest income (expense)	$	1,667	$	1,858	$	1,124	$	1,234	$	27	$	31	$	415	$	239	$	3,233	$	3,362	Net interest income (expense)	$	1,685	$	1,665	$	1,601	$	1,126	$	40	$	27	$	419	$	415	$	3,745	$	3,233
Net intersegment interest income (expense)	Net intersegment interest income (expense)	369		333		49		49		(2)		(7)		(416)		(375)		—		—		Net intersegment interest income (expense)	960		485		22		158		(7)		1		(975)		(644)		—		—
Segment net interest income	Segment net interest income	2,036		2,191		1,173		1,283		25		24		(1)		(136)		3,233		3,362		Segment net interest income	2,645		2,150		1,623		1,284		33		28		(556)		(229)		3,745		3,233
Allocated provision for credit losses	Allocated provision for credit losses	(5)		181		(264)		311		1		—		(56)		(71)		(324)		421		Allocated provision for credit losses	283		(5)		(50)		(264)		1		1		—		(56)		234		(324)
Segment net interest income after provision	Segment net interest income after provision	2,041		2,010		1,437		972		24		24		55		(65)		3,557		2,941		Segment net interest income after provision	2,362		2,155		1,673		1,548		32		27		(556)		(173)		3,511		3,557
Noninterest income	Noninterest income	1,032		997		753		608		652		524		(72)		81		2,365		2,210		Noninterest income	882		1,028		604		752		734		652		(118)		(67)		2,102		2,365
Amortization of intangibles	Amortization of intangibles	78		103		37		45		30		17		—		5		145		170		Amortization of intangibles	76		78		32		37		31		30		1		—		140		145
Other noninterest expense	Other noninterest expense	1,855		1,834		783		800		507		429		505		522		3,650		3,585		Other noninterest expense	1,876		1,907		763		767		609		507		225		469		3,473		3,650
Income (loss) before income taxes	Income (loss) before income taxes	1,140		1,070		1,370		735		139		102		(522)		(511)		2,127		1,396		Income (loss) before income taxes	1,292		1,198		1,482		1,496		126		142		(900)		(709)		2,000		2,127
Provision (benefit) for income taxes	Provision (benefit) for income taxes	268		252		295		149		34		25		(174)		(171)		423		255		Provision (benefit) for income taxes	306		265		318		315		31		31		(292)		(188)		363		423
Segment net income (loss)	Segment net income (loss)	$	872	$	818	$	1,075	$	586	$	105	$	77	$	(348)	$	(340)	$	1,704	$	1,141	Segment net income (loss)	$	986	$	933	$	1,164	$	1,181	$	95	$	111	$	(608)	$	(521)	$	1,637	$	1,704

Identifiable assets (period end)		$	161,116	$	166,640	$	177,578	$	191,625	$	9,454	$	6,999	$	181,736	$	133,919	$	529,884	$	499,183

Nine Months Ended September 30, (Dollars in millions)	Nine Months Ended September 30, (Dollars in millions)	CB&W				C&CB				IH				OT&C (1)				Total				Nine Months Ended September 30, (Dollars in millions)	CB&W				C&CB				IH				OT&C (1)				Total
		2021		2020		2021		2020		2021		2020		2021		2020		2021		2020			2022		2021		2022		2021		2022		2021		2022		2021		2022		2021
Net interest income (expense)	Net interest income (expense)	$	5,110	$	5,564	$	3,511	$	4,116	$	76	$	99	$	1,066	$	681	$	9,763	$	10,460	Net interest income (expense)	$	4,780	$	5,103	$	3,972	$	3,518	$	94	$	76	$	1,489	$	1,066	$	10,335	$	9,763
Net intersegment interest income (expense)	Net intersegment interest income (expense)	1,162		1,033		115		(207)		(10)		(28)		(1,267)		(798)		—		—		Net intersegment interest income (expense)	2,325		1,102		263		346		(9)		1		(2,579)		(1,449)		—		—
Segment net interest income	Segment net interest income	6,272		6,597		3,626		3,909		66		71		(201)		(117)		9,763		10,460		Segment net interest income	7,105		6,205		4,235		3,864		85		77		(1,090)		(383)		10,335		9,763
Allocated provision for credit losses	Allocated provision for credit losses	91		887		(698)		1,244		1		7		(104)		20		(710)		2,158		Allocated provision for credit losses	556		91		(228)		(698)		2		1		(20)		(104)		310		(710)
Segment net interest income after provision	Segment net interest income after provision	6,181		5,710		4,324		2,665		65		64		(97)		(137)		10,473		8,302		Segment net interest income after provision	6,549		6,114		4,463		4,562		83		76		(1,070)		(279)		10,025		10,473
Noninterest income	Noninterest income	2,877		3,074		2,254		1,684		1,983		1,679		(147)		157		6,967		6,594		Noninterest income	2,723		2,874		1,859		2,251		2,304		1,984		(394)		(142)		6,492		6,967
Amortization of intangibles	Amortization of intangibles	236		316		113		130		80		53		2		14		431		513		Amortization of intangibles	228		235		97		112		94		81		1		3		420		431
Other noninterest expense	Other noninterest expense	5,544		5,584		2,324		2,481		1,451		1,280		1,666		1,206		10,985		10,551		Other noninterest expense	5,584		5,628		2,236		2,277		1,729		1,451		898		1,629		10,447		10,985
Income (loss) before income taxes	Income (loss) before income taxes	3,278		2,884		4,141		1,738		517		410		(1,912)		(1,200)		6,024		3,832		Income (loss) before income taxes	3,460		3,125		3,989		4,424		564		528		(2,363)		(2,053)		5,650		6,024
Provision (benefit) for income taxes	Provision (benefit) for income taxes	768		680		896		330		125		102		(600)		(442)		1,189		670		Provision (benefit) for income taxes	825		736		863		954		139		124		(762)		(625)		1,065		1,189
Segment net income (loss)	Segment net income (loss)	$	2,510	$	2,204	$	3,245	$	1,408	$	392	$	308	$	(1,312)	$	(758)	$	4,835	$	3,162	Segment net income (loss)	$	2,635	$	2,389	$	3,126	$	3,470	$	425	$	404	$	(1,601)	$	(1,428)	$	4,585	$	4,835

Identifiable assets (period end)	Identifiable assets (period end)	$	161,116	$	166,640	$	177,578	$	191,625	$	9,454	$	6,999	$	181,736	$	133,919	$	529,884	$	499,183	Identifiable assets (period end)	$	170,111	$	160,803	$	197,869	$	177,751	$	11,533	$	9,454	$	168,925	$	181,876	$	548,438	$	529,884

(1)Includes financial data from business units below the quantitative and qualitative thresholds requiring disclosure.

38 Truist Financial Corporation 37

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MD&A is intended to assist readers in their analysis of the accompanying Consolidated Financial Statements and supplemental financial information. It should be read in conjunction with the Consolidated Financial Statements, the accompanying Notes to the Consolidated Financial Statements in this Form 10-Q, other information contained in this document, as well as with Truist’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

A description of certain factors that may affect our future results and risk factors is set forth in Part I, Item 1A-Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2021.

Regulatory Considerations

The regulatory framework applicable to banking organizations is intended primarily for the protection of depositors and the stability of the financial system, rather than for the protection of shareholders and creditors. Truist is subject to banking laws and regulations, and various other laws and regulations, which affect the operations and management of Truist and its ability to make distributions to shareholders. Truist and its subsidiaries are also subject to supervision and examination by multiple regulators. The descriptions below summarize updates since the filing of the Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 to state and federal laws to which Truist is subject. These descriptions do not summarize all possible or proposed changes in current laws or regulations and are not intended to be a substitute for the related statues or regulatory provisions. Refer to Truist’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 for additional disclosures.

~~Supplementary Leverage Ratio~~

~~The temporary exclusion~~In March 2022, the U.S. enacted federal legislation that is intended to minimize legal and economic uncertainty following U.S. dollar LIBOR’s cessation by replacing LIBOR references in certain contracts under certain circumstances with a SOFR-based rate to be established in a forthcoming FRB rule that incorporates a spread adjustment specified in the statute. While some states have already adopted LIBOR legislation, the federal legislation expressly preempts any provision of U.S. Treasury securities and deposits at the FRB from the calculation of the supplementary leverage ratio expired as scheduled on March 31, 2021. This temporary relief previously benefited the Company’s supplementary leverage ratio by approximately 20 basis points. The FRB also announced plans to invite public comment on several potential supplementary leverage ratio modifications to ensure that the supplementary leverage ratio remains effective in an environment of higher reserves, though such proposal had not been published as of the date of this report.

~~Stress Capital Buffer~~

~~The FRB assigned Truist an SCB of 2.5%, which is effective from October 1, 2021 to September 30, 2022, at which point a revised SCB will be calculated and provided to Truist.~~

The FRB has lifted the restrictions on capital distributions for large banking organizations, including Truist, that had been in place due to the uncertainty caused by the COVID-19 pandemic. Going forward, Truist is subject to the normal restrictions on capital distributions under the SCB framework and applicable law.

~~Security-Based Swap Dealer Registration~~any state or local law, statute, rule, regulation, or standard.

In ~~November 2021, Truist Bank conditionally registered with~~October 2022, the ~~SEC as~~FDIC adopted a ~~security-based swap dealer. As a result, Truist Bank’s security-based swaps business~~final rule to increase initial base deposit insurance assessment rate schedules uniformly by 2 basis points, beginning on January 1, 2023. This rule is ~~now subject~~expected to ~~requirements that are similar to~~increase regulatory premiums by approximately $100 million annually. The FDIC also concurrently maintained the ~~CFTC rules applicable to swap dealers, including trade reporting, business conduct standards, recordkeeping, margin, and potentially mandatory clearing and exchange trading requirements.~~Designated Reserve Ratio for the DIF at 2%.

~~Resolution Plans~~

Executive Overview

The FDIC issued a policy statement in June 2021 announcing that it will resume requiring bank level resolution plans for large banks, including Truist Bank, and bank-level resolution plans will have more streamlined content requirements. Truist Bank will be required to submit a bank-level resolution plan every three years. During theOur third quarter ~~Truist Bank was informed by the FDIC that its next resolution plan will be due on or before December 1, 2022. The FDIC also clarified the content requirements~~2022 performance reflects strong progress in many areas of the ~~next resolution plan Truist Bank is required to submit.~~business, as we delivered strong broad-based loan growth, significant margin expansion and continued exceptional asset quality. Overall financial results were mixed, however, as the challenging market environment impacted our capital markets related revenue.

~~Truist submitted its inaugural resolution plan~~We continue to remain highly confident in Truist’s trajectory given the ~~FRB~~diversity of our business mix, our strong markets, conservative risk culture, and ~~FDIC in September 2021, which is currently under review.~~

~~Lifting of Consent Order~~the substantial opportunities that lie ahead post integration.

In ~~June~~July 2022, Truist launched Truist One Banking, a first-of-its-kind approach to the checking account experience, designed to address clients’ direct feedback. Additionally during the quarter, we launched Truist Assist, an AI-enhanced virtual assistant within the mobile banking app and online banking platform; combining innovative technology with personalized human touch to enhance the client experience. We also announced the expansion of digital investment offerings with Truist Invest, a robo advisor, and Truist Invest Pro, a hybrid investing solution that combines automated investing with access to a team of financial advisors.

38 Truist Financial Corporation

ESG

Our 2021 Environmental, Social, and Governance and Corporate Social Responsibility Report highlights the ~~FDIC terminated~~significant steps we’ve taken to meet and exceed our goals, including the ~~consent order between SunTrust Bank~~diversity of our senior leadership and supporting our clients and communities to transition to a lower carbon economy. We will shift our TCFD Report publication to spring 2023, to align with the release of the 2022 Environmental, Social, and Governance and Corporate Social Responsibility Report. Outlined below are significant updates to our ESG efforts during the first nine-months of 2022.

Environmental

•Truist has joined the Partnership for Carbon Accounting Financials, and set 2030 goals to reduce Scope 1 and Scope 2 emissions by 35% each, and to reduce water consumption by 25%, relative to 2019.

•We announced our goal to achieve net zero greenhouse gas emissions by 2050, supporting our clients’ transition to a low-carbon economy.

Social

•Guided by our purpose to inspire and build better lives and communities, we are investing in revenue producing businesses and enterprise technology and have increased our minimum wage to $22 per hour effective October 1, 2022, positioning Truist as a leader in the industry.

•With 16.5% of senior leadership roles being held by ethnically diverse teammates, we have exceeded our original goal and we aspire for continued growth in this area.

•Together with the Truist Foundation and the ~~FRB relating~~Truist Charitable Fund, we’ve committed $120 million to ~~certain identified legacy compliance issues.~~ help historically underserved small businesses gain access to capital and technical assistance.

•Truist ~~Bank,~~continues to be ahead of schedule with regard to our $60 billion Community Benefits Plan commitment.

•Our company purpose continues to drive our actions to care for our teammates, clients, and the communities we serve, and this was even more apparent in the aftermath of Hurricane Ian, when our teammates acted quickly to support each other and our local communities through humanitarian aid and volunteer efforts.

Governance

•Michael B. Maguire was named CFO effective September 15, 2022. Mr. Maguire succeeds Daryl Bible, whose retirement was announced in May and who will remain at Truist during a transition period. Mr. Maguire will oversee accounting, tax, treasury, financial planning and analysis, investor relations, and other responsibilities. Prior to his current role, Maguire led the company’s consumer finance businesses, including LightStream, Service Finance, Sheffield Financial, Dealer Retail Services, and its student loan unit. Previously, Mr. Maguire served as ~~successor~~the head of enterprise partnerships and investments at Truist. Prior to ~~SunTrust Bank, committed to comply~~that, Mr. Maguire spent 16 years as an investment banker at Truist Securities.

•Clarke R. Starnes III, CRO of Truist, has been given additional leadership responsibilities, including oversight of the corporate function responsible for procurement, third-party risk management, supplier diversity, and unclaimed property and escheatment businesses, and the finance-risk data analytics office tasked with the ~~obligations in~~implementation of the ~~order~~data management framework for Risk, Finance, and ESG. In addition, the Corporate Security group and the Wholesale and Retail Credit Risk modeling team will join the Risk Management Organization led by Mr. Starnes. Mr. Starnes has been designated the additional officer title of Vice Chair in connection with these new responsibilities.

•Truist was named a Top 100 performer within the ~~FDIC’s~~new 2022 JUST Capital Workforce Equity and ~~FRB’s approval~~Mobility Ranking.

•Truist made several leadership changes during the first quarter of 2022 that are discussed in the ~~Merger.~~executive overview section of our Quarterly Report on Form 10-Q for the period ended March 31, 2022.

Truist Financial Corporation 39

~~Executive Overview~~

Truist had solid financial performance in the third quarter of 2021 that was driven by strong fee income from a diverse business mix - including wealth, insurance brokerage, investment banking, and positive trends in a number of other businesses given improving economic conditions. Improving economic conditions also led to strong credit performance and a benefit from the provision for credit losses. The Company achieved a significant milestone in early October with the successful migration of approximately 7 million clients (primarily heritage BB&T) to the new Truist technology ecosystem. In addition, Truist completed the retail mortgage origination conversion and accelerated the roll-out of the new Truist digital app during the third quarter of 2021. Truist continues to reaffirm its commitment to achieving $1.6 billion in net cost saves on a run rate basis by the fourth quarter of 2022. Truist also continues to closely monitor the COVID-19 pandemic and its effects on stakeholders and the financial markets and is actively supporting teammates, clients, and communities.

~~Integration Efforts~~

~~Major milestones during 2021 include:~~

•~~Completed the Wealth brokerage and trust transitions.~~

•~~Completed the mortgage systems transition, enabling clients to get the best of both heritage SunTrust and heritage BB&T to meet their homeownership needs.~~

•Continued to activate the Integrated Relationship Management approach. Truist’s Integrated Relationship Management approach is designed to deepen client relationships and bring the full breadth and depth of Truist’s products and services to meet clients’ financial needs.

•~~Introduced the new Truist digital app; migrated approximately 7 million clients to the new Truist digital banking experience, with nearly half of clients beginning to use the app~~

•~~Converted heritage BB&T retail and commercial clients to the new Truist technology ecosystem, the most significant milestone to date.~~

~~Supporting Clients~~

Truist continues to work closely with clients as they navigate through the continuing challenges from the COVID-19 pandemic. Truist supported clients by being the sixth largest amongst commercial banks in the second round of PPP funding, assisting clients with the forgiveness process, and continuing to support clients as they transition from payment relief programs. Truist originated approximately $17 billion of PPP loans. As of September 30, 2021, Truist had $3.5 billion of PPP loans outstanding.

~~Supporting Teammates~~

Truist offered a voluntary separation and retirement program to eligible teammates in June 2021. Nearly 2,000 teammates elected to participate in the voluntary program designed to provide tenured teammates flexibility on how they want to manage their career. Approximately 50% of those that elected to participate had separation dates of September 30, 2021. While Truist is hiring in some areas and rightsizing in others through natural attrition, planned staffing reductions, and the voluntary separation and retirement program, Truist is actively supporting all teammates affected by reductions with opportunities and tools for internal placement, severance payments, and outplacement assistance and coaching. The Company recognized $189 million of merger-related and restructuring charges in 2021 related to the voluntary separation and retirement program.

Truist has made progress towards the commitment to increase racially and ethnically diverse teammates among senior leadership roles to more than 15% by 2023 with current progress at 14.2% as of September 30, 2021. For early career program hiring in 2021, 54% of seats at Truist were filled by candidates from various diverse backgrounds. Truist teammates have received $24 million through Truist Momentum, a workplace financial wellness program that educates, equips, and inspires teammates to manage their money based on what matters most to them.

~~Supporting Communities~~

Truist continued to fulfill its purpose in meaningful ways in the community in the third quarter through a number of unique and creative initiatives. Truist expanded its partnership with EVERFI bringing literacy tools to elementary schools across the nation. Truist showed leadership as the first top-10 bank to join BlackRock’s philanthropic Emergency Savings Initiative. Truist Community Capital provided over $300 million in equity in the third quarter to support communities through investments in affordable housing, access to healthy foods and education, and investments in job creation and small businesses. Truist continued to make solid progress towards the Company’s $60 billion Community Benefits Plan, ending August 2021 at 112% of the annual target. In July, Truist also released its second annual Corporate Social Responsibility and Environmental, Social and Governance report to outline its advancements and commitments with regard to diversity, equity, and inclusion; environmental sustainability and climate change; governance; community involvement; and financial inclusion.

~~40 Truist Financial Corporation~~

~~Executive Leadership changes~~

During the third quarter Truist announced its new executive leadership structure effective September 1, 2021. As previously announced as part of the Merger, William H. Rogers, Jr. succeeded Kelly S. King as CEO on September 12, 2021 and Kelly S. King transitioned to the role of executive chairman through March 12, 2022. The other members of the executive leadership team and their roles are:

~~Daryl N. Bible - Chief Financial Officer~~

~~Scott Case - Chief Information Officer~~

~~Hugh S. (Beau) Cummins, III - Vice Chair~~

~~Ellen M. Fitzsimmons - Chief Legal Officer and Head of Public Affairs~~

~~John Howard - Chief Insurance Officer~~

~~Michael B. Maguire - Chief National Consumer Finance Services and Payments Officer~~

~~Kimberly Moore-Wright - Chief Teammate Officer and Head of Enterprise Diversity~~

~~Brant J. Standridge - Chief Retail Community Banking Officer~~

~~Clarke R. Starnes III - Chief Risk Officer~~

~~Joseph M. Thompson - Chief Wealth Officer~~

~~David H. Weaver - Chief Commercial Community Banking Officer~~

~~Dontá L. Wilson - Chief Digital and Client Experience Officer~~

Financial Results

Net income available to common shareholders for the third quarter of ~~2021 totaled $1.6~~2022 of $1.5 billion ~~up 51%,~~was down 5.0% compared with the third quarter of ~~last year.~~2021. On a diluted per common share basis, earnings for the third quarter of ~~2021~~2022 were ~~$1.20, an increase~~$1.15, a decrease of ~~$0.41~~$0.05, or 4.2%, compared to the third quarter of ~~2020.~~2021. Truist’s results of operations for the third quarter of ~~2021~~2022 produced an annualized return on average assets of ~~1.28%~~1.19% and an annualized return on average common shareholders’ equity of ~~10.2%~~10.7% compared to prior year returns of ~~0.91%~~1.28% and ~~6.9%~~10.2%, respectively.

Results for the third quarter of 2022 included merger-related and restructuring charges of $62 million ($48 million after-tax) and incremental operating expenses related to the Merger of $90 million ($69 million after-tax). Results for the third quarter of 2021 included ~~merger-related and restructuring charges of~~ $172 million ($132 million after-tax), incremental operating expenses related to the Merger of $191 million ($147 million after-tax), and a one-time professional fee expense of $30 million ($23 million after-tax). Results for the third quarter of 2020 included $236 million ($181 million after-tax) of merger-related and restructuring charges, ~~$152~~$191 million ($~~115~~147 million after-tax) of incremental operating expenses related to the Merger, ~~securities gains of $104 million ($80 million after-tax),~~ and a ~~charitable contribution~~one-time professional fee to develop an ongoing program to identify, prioritize, and roadmap teammate generated revenue growth and expense savings opportunities beyond the Merger of ~~$50~~$30 million ($3823 million ~~after-tax)~~after tax).

~~Truist’s revenue for the third quarter of 2021 was $5.6 billion.~~ On a TE basis, revenue was ~~also $5.6~~$5.9 billion for the third quarter of ~~2021,~~2022, an increase of ~~$25~~$259 million, or ~~0.4%~~4.6%, compared to the same period in ~~2020. Excluding securities gains of $104 million from the third quarter of 2020, adjusted taxable equivalent revenues increased $129 million, or 2.3%, compared to the earlier quarter.~~

2021. TE net interest income for the third quarter of ~~2021~~2022 was ~~down $130~~up $522 million, or ~~3.8%~~16%, compared to the earlier quarter primarily due to strong loan growth, higher market interest rates coupled with well controlled deposit costs and solid deposit growth. These increases were partially offset by lower purchase accounting accretion and lower ~~rates on earning assets, and a decrease in loans. These decreases were partially offset by growth in the securities portfolio, lower funding costs, higher fees on~~ PPP ~~loans, and fewer interest deferrals on COVID-19 loan accommodations.~~revenue. Average earning assets increased ~~$26.4~~$20.6 billion, or ~~6.1%~~4.5%, compared to the earlier ~~quarter. The increase~~quarter primarily due to growth in ~~average earning assets reflects a $66.4 billion, or 83%, increase in average securities, while~~ average total loans ~~and leases decreased $25.4~~of $21.5 billion, or ~~8.0%~~7.4%. Average deposits increased $17.4 billion, or 4.3%, and average ~~other earning assets decreased $16.5~~short-term borrowings increased $12.0 billion or 46%. The growth in average earning assets is a result of an increase in investment securities driven by strong deposit growth resulting from fiscal and monetary stimulus. Average deposits increased $30.5 billion, or 8.2%, compared to the earlier quarter, while average long-term debt ~~and short-term borrowings~~ decreased ~~$3.6~~$5.9 billion, or ~~8.8%, and $849 million, or 14%, respectively.~~16%.

Net interest margin was ~~2.81%~~3.12%, ~~down 29~~up 31 basis points compared to the ~~same period in 2020.~~earlier quarter. The yield on the total loan portfolio for the third quarter of ~~2021~~2022 was ~~3.90%~~4.49%, ~~down 14~~up 59 basis points compared to the earlier quarter, primarily reflecting ~~the impact of~~higher market interest rates, partially offset by lower purchase accounting accretion and a lower ~~rate environment.~~PPP revenue. The yield on the average securities portfolio was ~~1.50%~~1.95%, ~~down 47~~up 45 basis points compared to the earlier quarter primarily due to ~~lower yields~~the higher rate environment.

The average cost of total deposits was 0.31%, up 28 basis points compared to the earlier quarter. The average cost of short-term borrowings was 2.34%, up 166 basis points compared to the earlier quarter. The average cost of long-term debt was 2.43%, up 82 basis points compared to the earlier quarter. The increase in rates on ~~new purchases.~~deposits and other funding sources was largely attributable to the higher rate environment.

The provision for credit losses was $234 million, compared to a benefit of $324 million ~~compared to a cost of $421 million~~ for the ~~same period in 2020.~~earlier quarter. The earlier quarter ~~reflected significant uncertainty related to the economic impacts resulting from the pandemic, whereas the current quarter includes~~included a reserve release due to the improving ~~economic outlook.~~credit environment during that period. Net charge-offs for the third quarter of ~~2021~~2022 totaled ~~$135~~$213 million compared to ~~$326~~$135 million in the earlier quarter. The third quarter of 2020 included $97 million of charge-offs related to the implementation of CECL, which required a gross up of loan carrying values in connection with the establishment of an allowance on PCD loans. The net charge-off ratio for the current quarter of ~~0.19%~~0.27% was ~~down 23~~up eight basis points compared to the ~~third quarter 2020, due primarily to the additional losses on PCD loans taken in the~~ earlier quarter ~~and lower actual net losses in the commercial portfolio.~~primarily driven by normalizing trends across certain consumer portfolios.

~~Truist Financial Corporation 41~~

Noninterest income for the third quarter of ~~2021 increased $155~~2022 decreased $263 million, or 7.0%, compared to the same period in 2020. Noninterest income for the third quarter of 2020 included $104 million of securities gains on available-for-sale securities. Excluding securities gains, noninterest income increased $259 million, or 12%11%, compared to the earlier quarter. ~~Insurance~~Other income ~~increased $127~~decreased $139 million due to ~~acquisitions, as well as organic growth. Investment banking~~valuation changes from assets held for certain post-retirement benefits, which is primarily offset by lower personnel expense, and ~~trading~~lower investment income ~~increased $57 million due to strong merger~~ and ~~acquisition activity~~valuation marks from the Company’s SBIC and ~~loan syndications. Wealth management income increased $32 million due to higher valuations of assets under management.~~other strategic investments. Residential mortgage ~~banking~~ income decreased ~~$42~~$107 million, ~~primarily due~~or 60%, as lower production income (due to lower ~~production related revenues as a result of lower gain on sale~~ margins and refinance volumes resulting from the higher rate environment) was partially offset by higher servicing income (due to lower prepayments and servicing portfolio purchases). Investment banking and trading income decreased $94 million, or 30%, due to ~~increases~~lower bond and equity originations and merger and acquisition fees, partially offset by higher trading income. These decreases were partially offset by an increase of $80 million, or 12%, in ~~the valuation of mortgage servicing rights and lower prepayment rates. Additionally, there were increases in service charges on deposit accounts, other~~insurance income ~~and card and payment related fees~~ due to ~~improved economic activity.~~organic growth and acquisitions.

Noninterest expense for the third quarter of ~~2021~~2022 was ~~up $40~~down $182 million, or ~~1.1%~~4.8%, compared to the ~~same period in 2020.~~earlier quarter. Merger-related and restructuring charges decreased ~~$64~~$110 million ~~primarily due to facilities impairments in the earlier quarter, while~~and incremental operating expenses related to the Merger ~~increased $39~~decreased $101 million ~~primarily reflected in professional fees and outside processing.~~due to diminishing integration-related activities. The ~~current~~earlier quarter ~~also includes~~included a $30 million professional fee to develop an ongoing program to identify, prioritize, and roadmap teammate generated revenue growth and expense savings opportunities beyond the Merger. ~~The earlier quarter included $50 million for charitable contributions to the~~

40 Truist ~~Charitable Fund (other expense).~~ Financial Corporation

Excluding the aforementioned items and ~~changes in~~the amortization of intangibles, adjusted noninterest expense ~~was up $110~~increased $64 million, or ~~3.5%~~2.0%, compared to the earlier quarter. ~~Additionally, increases~~Other expense increased $81 million ($87 million, or 104%, on an adjusted basis) primarily due to increased operational losses and teammate travel expenses. Professional fees and outside processing expenses decreased $20 million, but was up $70 million, or 33%, on an adjusted basis due to increased project spend for enterprise technology investments and increased call center staffing. Equipment expense decreased $32 million ($38 million, or 25%, on an adjusted basis) primarily due to laptop purchases in ~~personnel~~the prior period. Software expense decreased $26 million ($24 million, or 9.6%, on an adjusted basis) primarily due to lower maintenance expense and decommissioned software. Personnel expense decreased $71 million ($32 million, or 1.5%, on an adjusted basis) due to lower other employee benefits as a result of ~~$129 million were~~the decrease in noninterest income for post-retirement benefits and lower incentives, partially offset by ~~a decline~~higher salaries due to annual merit increases, investments in ~~net occupancy expense of $46 million~~revenue producing businesses and ~~other expense of $72 million.~~enterprise technology, as well as additional personnel costs for acquisitions.

The provision for income taxes was ~~$423~~$363 million for the third quarter of ~~2021,~~2022, compared to ~~$255~~$423 million for the ~~same period in 2020. This produced an~~earlier quarter. The effective tax rate for the third quarter of ~~2021 of 19.9%~~2022 was 18.2%, compared to ~~18.3%~~19.9% for the earlier quarter. The ~~higher~~decrease in the effective tax rate iswas primarily ~~due to higher pre-tax income~~driven by an increase in discrete tax benefits and changes in the ~~current quarter without a corresponding increase in beneficial~~full year forecasted effective tax ~~items.~~rate.

Truist’s total assets at September 30, ~~2021~~2022 were ~~$529.9~~$548.4 billion, an increase of ~~$20.7~~$7.2 billion, or ~~4.1%~~1.3%, compared to December 31, ~~2020.~~2021. Total loans and leases at September 30, 2022, were $316.6 billion, an increase of $22.3 billion, or 7.6% compared with December 31, 2021. The increase in ~~total assets was primarily a result~~loans reflects strong production during the second and third quarters of ~~strong deposit growth,~~this year across most industry verticals and product groups in the ~~deployment~~commercial and industrial portfolio and the majority of ~~which led to an increase in AFS securities of $30.3 billion, which was partially offset by a $15.1 billion decline in total loans and leases.~~

the consumer portfolios. Total deposits at September 30, ~~2021~~2022 were ~~$405.9~~$416.0 billion, ~~an increase~~a decrease of ~~$24.8 billion,~~$496 million, or ~~6.5%~~0.1%, compared to December 31, ~~2020. Deposit growth was strong during the first nine months of 2021 resulting from fiscal and monetary stimulus, partially offset by the maturity of higher-cost personal accounts.~~2021.

Asset quality remains excellent, reflecting Truist’s prudent risk culture and diverse portfolio, improving economic conditions, and the ongoing effects of government stimulus. As of September 30, 2021, nonperforming assets were 0.23% of total assets, down four basis points from December 31, 2020. The allowance for loan and lease loss coverage ratio was 4.35x nonperformingportfolio. Nonperforming loans and leases held for investment were 0.35% of loans and leases held for investment at September 30, 2022, down one basis point compared to ~~4.39x at December 31, 2020.~~June 30, 2022. The ALLL ratio was 1.34% compared to 1.38% for second quarter 2022. The ALLL coverage ratio was 4.98X annualized net charge-offs, versus 6.54X for second quarter 2022.

Truist maintained strong capital and ~~liquidity.~~liquidity levels relative to the company’s risk profile. As of September 30, ~~2021,~~2022, the CET1 ratio was ~~10.1%~~9.1% and the average LCR was 114%. For the nine months ended September 30, 2021, Truist completed $1.1 billion of share repurchases and redeemed $1.4 billion of preferred stock. Additionally, the Company had $5.8 billion of senior long term debt maturities and redemptions, partially offset by $4.5 billion of issuances. Truist increased the common dividend 7% during the third quarter to $0.48 per share, resulting in dividend and total payout ratios for the third quarter of ~~2021 of 40%~~2022 was 111%. ~~In October 2021,~~The decline in the CET1 ratio compared to June 30, 2022 primarily reflects the BenefitMall acquisition and strong loan growth. Truist ~~declared~~increased its quarterly common ~~dividends of $0.48~~dividend 8% to $0.52 per share ~~for the fourth quarter of 2021.~~

Truist continues to target a CET1 ratio of approximately 9.75% over the near-term. As previously communicated, the Company expects to be able to, with appropriate approvals from its Board of Directors, deploy approximately $4 billion to $5 billion of capital (either in ~~the form of share repurchases or acquisitions) between 3Q21 and 3Q22. During~~ the third quarter of ~~2021,~~2022, resulting in a dividend payout ratio of 45% for the third quarter of 2022. Truist ~~completed~~entered into an agreement to purchase BankDirect Capital Finance, the ~~acquisition~~insurance premium finance unit of ~~Constellation Affiliated Partners and announced the acquisition of Service Finance, LLC, reducing the amount of capital deployment available for acquisitions or share repurchases~~Texas Capital Bancshares, which is anticipated to ~~approximately $1 billion to $2 billion through 3Q22. Truist resumed repurchasing shares and expects to consume approximately $500 million of this capacity via share repurchases~~close in the fourth quarter of ~~2021 reflecting the Company’s strong capital position,~~2022. This will add approximately $3.2 billion in loans and ~~the reduced integration risk with successful migration~~deploys 15 basis points of ~~heritage BB&T retail~~capital. The acquisition will add scale and ~~commercial clients~~product offerings to ~~the Truist ecosystem.~~our existing premium finance business.

~~42 Truist Financial Corporation~~

Analysis of Results of Operations

Net Interest Income and NIM

Third Quarter ~~2021~~2022 compared to Third Quarter ~~2020~~2021

~~Net~~TE net interest income for the third quarter of ~~2021~~2022 was ~~down $130~~up $522 million, or ~~3.8%~~16%, compared to the earlier quarter primarily due to strong loan growth, higher market interest rates coupled with well controlled deposit costs and solid deposit growth. These increases were partially offset by lower purchase accounting accretion and lower rates on earning assets, and a decrease in loans. These decreases were partially offset by growth in the securities portfolio, lower funding costs, higher fees on Payroll Protection Program loans, and fewer interest deferrals on COVID-19 loan accommodations.PPP revenue. Average earning assets increased ~~$26.4~~$20.6 billion, or ~~6.1%~~4.5%, compared to the earlier ~~quarter. The increase~~quarter primarily due to growth in ~~average earning assets reflects a $66.4 billion, or 83%, increase in average securities, while~~ average total loans ~~and leases decreased $25.4~~of $21.5 billion, or ~~8.0%~~7.4%. Average deposits increased $17.4 billion, or 4.3%, and average ~~other earning assets decreased $16.5~~short-term borrowings increased $12.0 billion or 46%. The growth in average earning assets is a result of an increase in investment securities driven by strong deposit growth resulting from fiscal and monetary stimulus. Average deposits increased $30.5 billion, or 8.2%, compared to the earlier quarter, while average long-term debt ~~and short-term borrowings~~ decreased ~~$3.6~~$5.9 billion, or ~~8.8%, and $849 million, or 14%, respectively.~~16%.

Net interest margin was ~~2.81%~~3.12%, ~~down 29~~up 31 basis points compared to the earlier quarter. The yield on the total loan portfolio for the third quarter of ~~2021~~2022 was ~~3.90%~~4.49%, ~~down 14~~up 59 basis points compared to the earlier quarter, primarily reflecting ~~the impact of~~higher market interest rates, partially offset by lower purchase accounting accretion and a lower ~~rate environment.~~PPP revenue. The yield on the average securities portfolio was ~~1.50%~~1.95%, ~~down 47~~up 45 basis points compared to the earlier quarter primarily due to ~~lower yields on new purchases.~~the higher rate environment.

The average cost of total deposits was ~~0.03%~~0.31%, ~~down seven~~up 28 basis points compared to the earlier quarter. The average ~~rate on~~cost of short-term borrowings was ~~0.68%~~2.34%, ~~down 17~~up 166 basis points compared to the earlier quarter. The average ~~rate on~~cost of long-term debt was ~~1.61%~~2.43%, up 1382 basis points compared to the earlier quarter. The ~~lower~~increase in rates on deposits and ~~short-term borrowings reflect the lower rate environment. The higher rates on long-term debt~~other funding sources was ~~due~~largely attributable to the ~~runoff of lower~~higher rate ~~FHLB advances.~~environment.

Truist Financial Corporation 41

Nine Months of ~~2021~~2022 compared to Nine Months of ~~2020~~2021

~~Net~~TE net interest income for the nine months ended September 30, ~~2021~~2022 was ~~down $710~~up $580 million, or ~~6.7%~~5.9%, compared to the prior period primarily due to higher market interest rates coupled with well controlled deposit costs and solid deposit growth, growth in the securities and lending portfolios and lower premium amortization, partially offset by lower purchase accounting accretion and lower rates on earning assets, and a decrease in loans. These decreases were partially offset by growth in the securities portfolio, lower funding costs, higher fees on Payroll Protection Program loans, and fewer interest deferrals on COVID-19 loan accommodations.PPP revenue. Average earning assets increased ~~$21.8~~$22.4 billion, or ~~5.0%~~4.9%, compared to the prior period. The increase in average earning assets reflects a ~~$57.9~~$14.1 billion, or ~~75%~~10%, increase in average securities, ~~while~~a $7.2 billion, or 2.5%, increase in average total loans and leases, ~~decreased $22.4~~and a $576 million, or 11%, increase in average interest earning trading assets. Average deposits increased $25.6 billion, or ~~7.1%~~6.5%, and average ~~other earning assets decreased $14.3~~short-term borrowings increased $5.3 billion, or 42%. The growth in average earning assets is a result of an increase in investment securities driven by strong deposit growth resulting from fiscal and monetary stimulus. Average deposits increased $34.9 billion, or 9.7%87%, compared to the prior period, while average long-term debt ~~and short-term borrowings~~ decreased ~~$10.3~~$4.7 billion, or ~~22%, and $5.3 billion, or 46%, respectively.~~13%.

Net interest margin was ~~2.90%~~2.93% for the nine months ended September 30, ~~2021, down 36~~2022, up three basis points compared to the prior period. The yield on the total loan portfolio for the nine months ended September 30, ~~2021~~2022 was ~~4.00%~~4.04%, ~~down 39~~up four basis points compared to the prior period, reflecting ~~the impact of~~higher market interest rates, partially offset by lower purchase accounting accretion and ~~the~~ lower ~~rate environment.~~PPP revenue. The yield on the average securities portfolio was ~~1.48%~~1.82% for the nine months ended September 30, ~~2021, down 83~~2022, up 34 basis points compared to the prior period primarily due to ~~lower yields on new purchases and premium amortization.~~the higher rate environment.

The average cost of total deposits was ~~0.04%~~0.15% for the nine months ended September 30, ~~2021, down 23~~2022, up 11 basis points compared to the prior period. The average ~~rate~~cost on short-term borrowings was ~~0.84%~~1.68% for the nine months ended September 30, ~~2021, down 62~~2022, up 84 basis points compared to the prior period. The average ~~rate~~cost on long-term debt was ~~1.59%~~1.88% for the nine months ended September 30, ~~2021, down 19~~2022, up 29 basis points compared to the prior period. The ~~lower~~increase in rates on ~~interest-bearing liabilities reflect~~deposits and other funding sources was largely attributable to the ~~lower~~higher rate environment.

As of September 30, 2022, the remaining unamortized fair value marks on the loan and lease portfolio, deposits, and long-term debt were $826 million, $1 million, and $94 million, respectively. As of December 31, 2021, the remaining unamortized fair value marks on the loan and lease portfolio, deposits and long-term debt were ~~$1.5~~$1.3 billion, $9$7 million, and ~~$157 million, respectively. As of December 31, 2020, the remaining unamortized fair value marks on the loan and lease portfolio, deposits and long-term debt were $2.4 billion, $19 million, and $216~~$139 million, respectively.

The remaining unamortized fair value mark on loans and leases consists of ~~$807~~$510 million for consumer loans and leases, and ~~$733~~$316 million for commercial loans and leases. These amounts will be recognized over the remaining contractual lives of the underlying instruments or as paydowns occur.

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.

42 Truist Financial Corporation 43


Table 1-1: Taxable-Equivalent Net Interest Income and Rate / Volume Analysis (1)	Table 1-1: Taxable-Equivalent Net Interest Income and Rate / Volume Analysis (1)																					Table 1-1: Taxable-Equivalent Net Interest Income and Rate / Volume Analysis (1)

Three Months Ended September 30, (Dollars in millions)	Three Months Ended September 30, (Dollars in millions)	Average Balances (5)				Annualized Yield/Rate				Income/Expense				Incr. (Decr.)			Change due to					Three Months Ended September 30, (Dollars in millions)	Average Balances (5)						Annualized Yield/Rate						Income/Expense					Incr. (Decr.)			Change due to
		2021		2020		2021		2020		2021		2020				Rate			Volume	2022					2021			2022			2021			2022			2021					Rate			Volume
Assets	Assets																							Assets
Total securities, at amortized cost: (2)	Total securities, at amortized cost: (2)																					Total securities, at amortized cost: (2)
U.S. Treasury	U.S. Treasury	$	9,699	$	2,218	0.72	%	1.78	%	$	18	$	10	$	8		$	(9)		$	17	U.S. Treasury	$	10,925		$	9,699		0.93	%		0.72	%		$	26		$	18	$	8		$	6		$	2
GSE	GSE	1,830		1,842		2.31		2.33		10		10		—			—			—		GSE	305			1,830			2.56			2.31			1			10		(9)			1			(10)
Agency MBS	Agency MBS	132,890		75,232		1.53		1.95		509		366		143			(93)			236		Agency MBS	129,703			132,890			2.02			1.53			655			509		146			159			(13)
States and political subdivisions	States and political subdivisions	425		499		3.52		5.03		4		7		(3)			(2)			(1)		States and political subdivisions	395			425			3.92			3.52			4			4		—			—			—
Non-agency MBS	Non-agency MBS	1,398		—		2.20		—		8		—		8			—			8		Non-agency MBS	4,016			1,398			2.32			2.20			24			8		16			—			16
Other	Other	30		37		1.90		1.99		—		1		(1)			—			(1)		Other	52			30			3.94			1.90			—			—		—			—			—

Total securities	Total securities	146,272		79,828		1.50		1.97		549		394		155			(104)			259		Total securities	145,396			146,272			1.95			1.50			710			549		161			166			(5)
Interest earning trading assets	Interest earning trading assets	5,809		4,056		2.81		3.23		41		32		9			(5)			14		Interest earning trading assets	5,446			5,809			4.49			2.81			62			41		21			24			(3)
Other earning assets (3)	Other earning assets (3)	19,331		35,819		0.25		0.26		13		24		(11)			(1)			(10)		Other earning assets (3)	19,631			19,331			2.24			0.25			109			13		96			96			—
Loans and leases, net of unearned income: (4)	Loans and leases, net of unearned income: (4)																					Loans and leases, net of unearned income: (4)

Commercial and industrial	Commercial and industrial	130,025		143,452		3.00		3.02		981		1,087		(106)			(7)			(99)		Commercial and industrial	152,123			134,942			4.08			3.01			1,564			1,023		541			398			143
CRE	CRE	24,849		27,761		2.86		2.88		181		203		(22)			(1)			(21)		CRE	22,245			24,849			4.32			2.86			245			181		64			84			(20)
Commercial Construction	Commercial Construction	5,969		6,861		2.96		3.26		42		55		(13)			(5)			(8)		Commercial Construction	5,284			5,969			4.83			2.96			62			42		20			26			(6)
Lease financing		4,917		5,626		3.39		3.71		42		52		(10)			(4)			(6)

Residential mortgage	Residential mortgage	45,369		51,500		3.96		4.47		450		576		(126)			(62)			(64)		Residential mortgage	53,271			45,369			3.59			3.96			478			450		28			(45)			73
Residential home equity and direct	Residential home equity and direct	25,242		26,726		5.67		5.86		360		394		(34)			(13)			(21)		Residential home equity and direct	25,394			25,242			5.64			5.67			361			360		1			(2)			3
Indirect auto	Indirect auto	26,830		24,732		5.99		6.51		405		405		—			(33)			33		Indirect auto	28,057			26,830			5.40			5.99			382			405		(23)			(41)			18
Indirect other	Indirect other	11,112		11,530		6.54		7.05		183		204		(21)			(14)			(7)		Indirect other	12,300			11,112			6.46			6.54			200			183		17			(2)			19
Student	Student	7,214		7,446		4.02		4.30		74		80		(6)			(4)			(2)		Student	5,958			7,214			5.64			4.02			85			74		11			25			(14)
Credit card	Credit card	4,632		4,810		9.01		9.03		105		109		(4)			—			(4)		Credit card	4,755			4,632			9.97			9.01			119			105		14			11			3

Total loans and leases HFI	Total loans and leases HFI	286,159		310,444		3.92		4.06		2,823		3,165		(342)			(143)			(199)		Total loans and leases HFI	309,387			286,159			4.49			3.92			3,496			2,823		673			454			219
LHFS	LHFS	4,179		5,247		2.69		2.78		28		37		(9)			(1)			(8)		LHFS	2,489			4,179			4.81			2.69			30			28		2			17			(15)
Total loans and leases	Total loans and leases	290,338		315,691		3.90		4.04		2,851		3,202		(351)			(144)			(207)		Total loans and leases	311,876			290,338			4.49			3.90			3,526			2,851		675			471			204
Total earning assets	Total earning assets	461,750		435,394		2.98		3.34		3,454		3,652		(198)			(254)			56		Total earning assets	482,349			461,750			3.63			2.98			4,407			3,454		953			757			196
Nonearning assets	Nonearning assets	64,935		65,432																		Nonearning assets	63,257			64,935
Total assets	Total assets	$	526,685	$	500,826																	Total assets	$	545,606		$	526,685
Liabilities and Shareholders’ Equity	Liabilities and Shareholders’ Equity																					Liabilities and Shareholders’ Equity
Interest-bearing deposits:	Interest-bearing deposits:																					Interest-bearing deposits:
Interest-checking	Interest-checking	$	107,802	$	96,707	0.05		0.06		14		15		(1)			(3)			2		Interest-checking	$	111,645		$	107,802		0.56			0.05			158			14		144			143			1
Money market and savings	Money market and savings	136,094		123,598		0.03		0.06		9		19		(10)			(12)			2		Money market and savings	147,659			136,094			0.43			0.03			159			9		150			149			1
Time deposits	Time deposits	17,094		27,940		0.23		0.89		10		62		(52)			(34)			(18)		Time deposits	14,751			17,094			0.40			0.23			14			10		4			6			(2)

Total interest-bearing deposits (6)	Total interest-bearing deposits (6)	260,990		248,245		0.05		0.15		33		96		(63)			(49)			(14)		Total interest-bearing deposits (6)	274,055			260,990			0.48			0.05			331			33		298			298			—
Short-term borrowings	Short-term borrowings	5,360		6,209		0.68		0.85		9		13		(4)			(2)			(2)		Short-term borrowings	17,392			5,360			2.34			0.68			103			9		94			49			45
Long-term debt	Long-term debt	37,329		40,919		1.61		1.48		151		152		(1)			13			(14)		Long-term debt	31,381			37,329			2.43			1.61			190			151		39			67			(28)
Total interest-bearing liabilities	Total interest-bearing liabilities	303,679		295,373		0.25		0.35		193		261		(68)			(38)			(30)		Total interest-bearing liabilities	322,828			303,679			0.77			0.25			624			193		431			414			17
Noninterest-bearing deposits (6)	Noninterest-bearing deposits (6)	141,738		123,966																		Noninterest-bearing deposits (6)	146,041			141,738
Other liabilities	Other liabilities	11,915		11,853																		Other liabilities	13,227			11,915
Shareholders’ equity	Shareholders’ equity	69,353		69,634																		Shareholders’ equity	63,510			69,353
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	526,685	$	500,826																	Total liabilities and shareholders’ equity	$	545,606		$	526,685
Average interest-rate spread	Average interest-rate spread					2.73	%	2.99	%													Average interest-rate spread							2.86	%		2.73	%
NIM/net interest income - taxable equivalent	NIM/net interest income - taxable equivalent					2.81	%	3.10	%	$	3,261	$	3,391	$	(130)		$	(216)		$	86	NIM/net interest income - taxable equivalent							3.12	%		2.81	%		$	3,783		$	3,261	$	522		$	343		$	179
Taxable-equivalent adjustment	Taxable-equivalent adjustment									$	28	$	29									Taxable-equivalent adjustment													$	38		$	28

(1) 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) Total securities include AFS and HTM securities.

(3) Includes cash equivalents, interest-bearing deposits with banks, FHLB stock and other earning assets.

(4) Fees, which are not material for any of the periods shown, are included for rate calculation purposes. NPLs are included in the average balances.

(5) Represents daily average balances. Excludes basis adjustments for fair value hedges.

(6) Total deposit costs were ~~0.03%~~0.31% and ~~0.10%~~0.03% for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

44 Truist Financial Corporation 43


Table 1-2: Taxable-Equivalent Net Interest Income and Rate / Volume Analysis (1)	Table 1-2: Taxable-Equivalent Net Interest Income and Rate / Volume Analysis (1)																								Table 1-2: Taxable-Equivalent Net Interest Income and Rate / Volume Analysis (1)

Nine Months Ended September 30, (Dollars in millions)	Nine Months Ended September 30, (Dollars in millions)	Average Balances (5)				Annualized Yield/Rate			Income/Expense		Incr. (Decr.)			Change due to							Nine Months Ended September 30, (Dollars in millions)	Average Balances (5)				Annualized Yield/Rate							Income/Expense					Incr. (Decr.)			Change due to
		2021		2020			2021		2020				2021			2020			Rate				Volume				Nine Months Ended September 30, (Dollars in millions)	2022				2021			2022							2022	2021		Incr. (Decr.)			Rate		Volume
Assets	Assets																											Assets
Total securities, at amortized cost: (2)	Total securities, at amortized cost: (2)																												Total securities, at amortized cost: (2)
U.S. Treasury	U.S. Treasury	$	6,872	$	2,243		0.74	%	1.86	%	$	38		$	31		$	7	$	(28)			$	35					U.S. Treasury	$	10,457		$	6,872		0.84	%		0.74	%			$	66		$	38	$	28	$	6	$	22
GSE	GSE	1,837		1,847			2.32		2.33		32			32			—		—				—						GSE	557			1,837			2.19			2.32				8			32		(24)		(2)		(22)
Agency MBS	Agency MBS	125,157		72,152			1.49		2.29		1,401			1,240			161		(533)				694						Agency MBS	133,338			125,157			1.87			1.49				1,870			1,401		469		373		96
States and political subdivisions	States and political subdivisions	435		512			3.53		4.04		12			16			(4)		(2)				(2)						States and political subdivisions	380			435			3.82			3.53				11			12		(1)		1		(2)
Non-agency MBS	Non-agency MBS	477		115			2.18		16.78		8			15			(7)		(21)				14						Non-agency MBS	4,112			477			2.29			2.18				71			8		63		—		63
Other	Other	32		37			1.90		2.44		—			1			(1)		(1)				—						Other	51			32			3.46			1.90				1			—		1		1		—

Total securities	Total securities	134,810		76,906			1.48		2.31		1,491			1,335			156		(585)				741						Total securities	148,895			134,810			1.82			1.48				2,027			1,491		536		379		157
Interest earning trading assets	Interest earning trading assets	5,208		4,695			2.80		3.85		110			135			(25)		(39)				14						Interest earning trading assets	5,784			5,208			3.67			2.80				160			110		50		37		13
Other earning assets (3)	Other earning assets (3)	19,453		33,708			0.26		0.57		38			144			(106)		(60)				(46)						Other earning assets (3)	19,924			19,453			1.24			0.26				184			38		146		145		1
Loans and leases, net of unearned income: (4)	Loans and leases, net of unearned income: (4)																												Loans and leases, net of unearned income: (4)

Commercial and industrial	Commercial and industrial	133,218		142,731			3.06		3.47		3,045			3,710			(665)		(425)				(240)						Commercial and industrial	145,566			138,146			3.42			3.08				3,725			3,188		537		361		176
CRE	CRE	25,563		27,538			2.86		3.46		553			717			(164)		(116)				(48)						CRE	22,765			25,563			3.52			2.86				606			553		53		117		(64)
Commercial Construction	Commercial Construction	6,293		6,673			2.98		3.92		135			192			(57)		(46)				(11)						Commercial Construction	5,196			6,293			3.80			2.98				140			135		5		33		(28)
Lease financing		4,928		5,872			3.86		4.24		143			187			(44)		(16)				(28)

Residential mortgage	Residential mortgage	44,931		52,288			4.25		4.53		1,431			1,778			(347)		(106)				(241)						Residential mortgage	50,180			44,931			3.58			4.25				1,346			1,431		(85)		(241)		156
Residential home equity and direct	Residential home equity and direct	25,378		27,161			5.74		6.08		1,089			1,237			(148)		(68)				(80)						Residential home equity and direct	25,136			25,378			5.43			5.74				1,020			1,089		(69)		(59)		(10)
Indirect auto	Indirect auto	26,547		24,809			6.25		6.68		1,240			1,240			—		(83)				83						Indirect auto	26,888			26,547			5.47			6.25				1,101			1,240		(139)		(155)		16
Indirect other	Indirect other	10,920		11,255			6.79		7.19		555			606			(51)		(33)				(18)						Indirect other	11,549			10,920			6.36			6.79				549			555		(6)		(37)		31
Student	Student	7,375		7,622			3.96		4.75		219			271			(52)		(43)				(9)						Student	6,310			7,375			4.54			3.96				214			219		(5)		30		(35)
Credit card	Credit card	4,610		5,097			8.99		9.34		310			356			(46)		(13)				(33)						Credit card	4,721			4,610			9.29			8.99				328			310		18		10		8

Total loans and leases HFI	Total loans and leases HFI	289,763		311,046			4.02		4.42		8,720			10,294			(1,574)		(949)				(625)						Total loans and leases HFI	298,311			289,763			4.04			4.02				9,029			8,720		309		59		250
LHFS	LHFS	4,485		5,575			2.61		3.00		88			126			(38)		(15)				(23)						LHFS	3,167			4,485			3.82			2.61				91			88		3		33		(30)
Total loans and leases	Total loans and leases	294,248		316,621			4.00		4.39		8,808			10,420			(1,612)		(964)				(648)						Total loans and leases	301,478			294,248			4.04			4.00				9,120			8,808		312		92		220
Total earning assets	Total earning assets	453,719		431,930			3.08		3.72		10,447			12,034			(1,587)		(1,648)				61						Total earning assets	476,081			453,719			3.22			3.08				11,491			10,447		1,044		653		391
Nonearning assets	Nonearning assets	64,444		65,780																									Nonearning assets	64,673			64,444
Total assets	Total assets	$	518,163	$	497,710																								Total assets	$	540,754		$	518,163
Liabilities and Shareholders’ Equity	Liabilities and Shareholders’ Equity																												Liabilities and Shareholders’ Equity
Interest-bearing deposits:	Interest-bearing deposits:																												Interest-bearing deposits:
Interest-checking	Interest-checking	$	106,234	$	93,205		0.06		0.28		44			199			(155)		(178)				23						Interest-checking	$	112,058		$	106,234		0.26			0.06				215			44		171		168		3
Money market and savings	Money market and savings	133,167		123,536			0.03		0.27		27			254			(227)		(245)				18						Money market and savings	145,953			133,167			0.20			0.03				220			27		193		190		3
Time deposits	Time deposits	18,609		32,157			0.32		1.10		45			265			(220)		(138)				(82)						Time deposits	14,840			18,609			0.25			0.32				27			45		(18)		(10)		(8)

Total interest-bearing deposits (6)	Total interest-bearing deposits (6)	258,010		248,898			0.06		0.39		116			718			(602)		(561)				(41)						Total interest-bearing deposits (6)	272,851			258,010			0.23			0.06				462			116		346		348		(2)
Short-term borrowings	Short-term borrowings	6,081		11,350			0.84		1.46		38			124			(86)		(41)				(45)						Short-term borrowings	11,356			6,081			1.68			0.84				143			38		105		56		49
Long-term debt	Long-term debt	37,339		47,643			1.59		1.78		446			635			(189)		(63)				(126)						Long-term debt	32,646			37,339			1.88			1.59				459			446		13		74		(61)
Total interest-bearing liabilities	Total interest-bearing liabilities	301,430		307,891			0.27		0.64		600			1,477			(877)		(665)				(212)						Total interest-bearing liabilities	316,853			301,430			0.45			0.27				1,064			600		464		478		(14)
Noninterest-bearing deposits (6)	Noninterest-bearing deposits (6)	136,118		110,375																									Noninterest-bearing deposits (6)	146,862			136,118
Other liabilities	Other liabilities	11,262		12,133																									Other liabilities	12,448			11,262
Shareholders’ equity	Shareholders’ equity	69,353		67,311																									Shareholders’ equity	64,591			69,353
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	518,163	$	497,710																								Total liabilities and shareholders’ equity	$	540,754		$	518,163
Average interest-rate spread	Average interest-rate spread						2.81	%	3.08	%																			Average interest-rate spread							2.77	%		2.81	%
NIM/net interest income - taxable equivalent	NIM/net interest income - taxable equivalent						2.90	%	3.26	%	$	9,847		$	10,557		$	(710)	$	(983)			$	273					NIM/net interest income - taxable equivalent							2.93	%		2.90	%			$	10,427		$	9,847	$	580	$	175	$	405
Taxable-equivalent adjustment	Taxable-equivalent adjustment										$	84		$	97														Taxable-equivalent adjustment														$	92		$	84

(1)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)Total securities include AFS and HTM securities.

(3)Includes cash equivalents, interest-bearing deposits with banks, FHLB stock and other earning assets.

(4)Fees, which are not material for any of the periods shown, are included for rate calculation purposes. NPLs are included in the average balances.

(5)Represents daily average balances. Excludes basis adjustments for fair value hedges.

(6)Total deposit costs were ~~0.04%~~0.15% and ~~0.27%~~0.04% for the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

44 Truist Financial Corporation 45

Provision for Credit Losses

Third Quarter ~~2021~~2022 compared to Third Quarter ~~2020~~2021

The provision for credit losses was ~~a benefit of $324~~$234 million, compared to a ~~cost~~benefit of ~~$421~~$324 million for the earlier quarter. The earlier quarter ~~reflected significant uncertainty related to the economic impacts resulting from the pandemic, whereas the current quarter includes~~included a reserve release due to the improving ~~economic outlook.~~credit environment during that period. Net charge-offs for the third quarter of ~~2021~~2022 totaled ~~$135~~$213 million compared to ~~$326~~$135 million in the earlier quarter. The third quarter of 2020 included $97 million of charge-offs related to the implementation of CECL, which required a gross up of loan carrying values in connection with the establishment of an allowance on PCD loans. The net charge-off ratio for the current quarter of ~~0.19%~~0.27% was ~~down 23~~up eight basis points compared to the ~~third quarter 2020, due primarily to the additional losses on PCD loans taken in the~~ earlier quarter ~~and lower actual net losses in the commercial portfolio.~~primarily driven by normalizing trends across certain consumer portfolios.

Nine Months of ~~2021~~2022 compared to Nine Months of ~~2020~~2021

The provision for credit losses was ~~a benefit of $710~~$310 million for the nine months ended September 30, ~~2021,~~2022, compared to a ~~cost~~benefit of ~~$2.2 billion~~$710 million for the prior period. The current period provision expense primarily reflects growth in the loan portfolio and a moderately slower economic outlook, partially offset by a decline in the ALLL ratio, whereas the prior period included ~~significant uncertainty related to the economic impacts resulting from the pandemic, whereas the current period includes~~a reserve ~~releases~~release due to the improving ~~economic outlook.~~credit environment during that period. Net charge-offs for the nine months ended September 30, ~~2021~~2022 totaled ~~$515~~$550 million compared to ~~$914~~$515 million in the ~~earlier~~prior period. ~~The 2020 period included the previously mentioned $97 million of charge-offs related to the implementation of CECL.~~ The net charge-off ratio for the current ~~year~~period of ~~0.24%~~0.25% was ~~down 15~~up one basis points compared to the prior ~~period, primarily driven by lower losses across all portfolios, partially driven by~~period.

Refer to “Note 5. Loans and ACL” for additional ~~losses on PCD loans taken in 2020, combined with higher recoveries.~~discussion over the ACL.

Noninterest Income

Noninterest income is a significant contributor to Truist’s financial results. Management focuses on diversifying its sources of revenue to reduce Truist’s reliance on traditional spread-based interest income, as certain fee-based activities are a relatively stable revenue source during periods of changing interest rates.


Table 2: Noninterest Income	Table 2: Noninterest Income											Table 2: Noninterest Income
		Three Months Ended September 30,						Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,

(Dollars in millions)	(Dollars in millions)	2021		2020		% Change		2021		2020		% Change		(Dollars in millions)	2022		2021		% Change		2022		2021		% Change

Insurance income	Insurance income	$	645	$	518	24.5	%	$	1,961	$	1,648	19.0	%	Insurance income	$	725	$	645	12.4	%	$	2,277	$	1,961	16.1	%
Investment banking and trading income														Investment banking and trading income	222		316		(29.7)		738		1,064		(30.6)
Wealth management income	Wealth management income	356		324		9.9		1,042		945		10.3		Wealth management income	334		356		(6.2)		1,014		1,042		(2.7)
Service charges on deposits	Service charges on deposits	276		247		11.7		787		754		4.4		Service charges on deposits	263		276		(4.7)		769		787		(2.3)
Card and payment related fees														Card and payment related fees	241		225		7.1		699		650		7.5
Residential mortgage income	Residential mortgage income	179		221		(19.0)		396		807		(50.9)		Residential mortgage income	72		179		(59.8)		235		396		(40.7)
Investment banking and trading income		301		244		23.4		958		636		50.6
Card and payment related fees		225		200		12.5		650		558		16.5
Lending related fees	Lending related fees	74		77		(3.9)		268		210		27.6		Lending related fees	80		74		8.1		265		268		(1.1)
Operating lease income	Operating lease income	57		72		(20.8)		191		232		(17.7)		Operating lease income	66		57		15.8		190		191		(0.5)
Commercial real estate related income		78		55		41.8		259		148		75.0
Commercial mortgage income														Commercial mortgage income	50		54		(7.4)		108		134		(19.4)
Income from bank-owned life insurance	Income from bank-owned life insurance	43		46		(6.5)		139		135		3.0		Income from bank-owned life insurance	49		43		14.0		150		139		7.9
Securities gains (losses)	Securities gains (losses)	—		104		NM		—		402		NM		Securities gains (losses)	(1)		—		NM		(71)		—		NM
Other income	Other income	131		102		28.4		316		119		165.5		Other income	1		140		(99.3)		118		335		(64.8)
Total noninterest income	Total noninterest income	$	2,365	$	2,210	7.0		$	6,967	$	6,594	5.7		Total noninterest income	$	2,102	$	2,365	(11.1)		$	6,492	$	6,967	(6.8)

Third Quarter ~~2021~~2022 compared to Third Quarter ~~2020~~2021

Noninterest income for the third quarter of ~~2021 increased $155~~2022 decreased $263 million, or ~~7.0%~~11%, compared to the earlier quarter. ~~Noninterest~~Other income for the third quarter of 2020 included $104 million of securities gains on available-for-sale securities. Excluding securities gains, noninterest income increased $259 million, or 12%, compared to the earlier quarter. Insurance income increased $127decreased $139 million due to ~~acquisitions, as well as organic growth. Investment banking~~valuation changes from assets held for certain post-retirement benefits, which is primarily offset by lower personnel expense, and ~~trading~~lower investment income ~~increased $57 million due to strong merger~~ and ~~acquisition activity~~valuation marks from the Company’s SBIC and loan syndications. Wealth management income increased $32 million due to higher valuations of assets under management. Service charges on deposit accounts and card and payment related fees increased $29 million and $25 million, respectively, due to increased economic activity.other strategic investments. Residential mortgage ~~banking~~ income decreased ~~$42~~$107 million, ~~primarily due~~or 60%, as lower production income (due to lower ~~production related revenues as a result of lower gain on sale~~ margins and refinance volumes resulting from the higher rate environment) was partially offset by higher servicing income (due to lower prepayments and servicing portfolio purchases). Investment banking and trading income decreased $94 million, or 30%, due to ~~increases~~lower bond and equity originations and merger and acquisition fees, partially offset by higher trading income. These decreases were partially offset by an increase of $80 million, or 12%, in ~~the valuation of mortgage servicing rights and lower prepayment rates. Other~~insurance income ~~increased $29 million primarily~~ due to ~~investment income (primarily valuation gains) from the Company’s SBIC investments.~~organic growth and acquisitions.

46 Truist Financial Corporation 45

Nine Months of ~~2021~~2022 compared to Nine Months of ~~2020~~2021

Noninterest income for the nine months ended September 30, ~~2021 increased $373~~2022 decreased $475 million, or ~~5.7%~~6.8%, compared to the prior period. ~~Other income for~~The current period includes net securities losses of $71 million and the ~~nine months ended September 30, 2021 includes~~gain on the redemption of noncontrolling equity interest (other income) of $74 million. The earlier period included a gain of $37 million ~~gain~~ from the divestiture of certain businesses ~~whereas~~(other income). Excluding the aforementioned items, noninterest income for the nine months ended September 30, 2020 included $402 million of securities gains on available-for-sale securities. Excluding securities gains and the divestiture gain, noninterest income increased $738was down $441 million, or ~~12%~~6.4%, compared to the prior period. Investment banking and trading income ~~increased $322~~decreased $326 million, or 31%, due to ~~strong investment banking income from loan syndications and~~lower high-yield bond originations, equity originations, merger and acquisition fees ~~as well as~~and loan syndications. Excluding the ~~impact from CVA recoveries in the current period compared to losses in the earlier period. Insurance~~aforementioned gains, other income ~~increased $313~~decreased $254 million, ~~due to acquisitions, as well as organic growth. Other income increased $197 million~~or 85%, primarily due to ~~higher valuations of $96 million for~~valuation changes from assets held for certain post-retirement benefits, which is ~~largely~~primarily offset by ~~higher benefits~~lower personnel expense, ~~included in personnel expense. In addition, other income increased $94 million related to increased~~and lower investment income ~~(primarily valuations gains)~~and valuation marks from the Company’s SBIC and ~~Truist Ventures~~other strategic investments. Commercial real-estate related income increased $111 million primarily due to client-related structured real estate transactions. Wealth management increased $97 million due to higher valuations of assets under management. Card and payment related fees and service charges on deposits increased $92 million and $33 million, respectively, due to increased economic activity. Lending related fees increased $58 million due to gains from the sale of finance leases and noninterest loan fees due to higher unused line fees. Residential mortgage banking income decreased ~~$411~~$161 million, ~~primarily due~~or 41%, as lower production income (due to lower ~~production related revenues as a result of lower gain on sale~~ margins and refinance volumes resulting from the higher rate environment) was partially offset by higher servicing income (due to lower prepayments and servicing portfolio purchases). Insurance income increased $316 million, or 16%, due to ~~an increase in the valuation of mortgage servicing rights. Operating lease income decreased $41~~acquisitions and continued organic growth. Card and payment related fees increased $49 million, or 7.5%, due to ~~declines in~~ the ~~lease portfolio.~~first quarter 2022 acquisition of certain merchant services relationships and increased activity.

Noninterest Expense

The following table provides a breakdown of Truist’s noninterest expense:


Table 3: Noninterest Expense	Table 3: Noninterest Expense											Table 3: Noninterest Expense
		Three Months Ended September 30,						Nine Months Ended September 30,					Three Months Ended September 30,						Nine Months Ended September 30,

(Dollars in millions)	(Dollars in millions)	2021		2020		% Change		2021		2020				% Change		(Dollars in millions)	2022		2021		% Change		2022		2021		% Change

Personnel expense	Personnel expense	$	2,187	$	2,058	6.3	%	$	6,536	$	6,038			8.2	%	Personnel expense	$	2,116	$	2,187	(3.2)	%	$	6,269	$	6,536	(4.1)	%
Professional fees and outside processing	Professional fees and outside processing	372		323		15.2		1,063		859				23.7		Professional fees and outside processing	352		372		(5.4)		1,064		1,063		0.1
Software expense																Software expense	225		251		(10.4)		691		707		(2.3)
Net occupancy expense	Net occupancy expense	187		233		(19.7)		578		697				(17.1)		Net occupancy expense	176		187		(5.9)		565		578		(2.2)
Software expense		251		221		13.6		707		647				9.3
Amortization of intangibles	Amortization of intangibles	145		170		(14.7)		431		513				(16.0)		Amortization of intangibles	140		145		(3.4)		420		431		(2.6)
Equipment expense	Equipment expense	154		127		21.3		389		363				7.2		Equipment expense	122		154		(20.8)		354		389		(9.0)
Marketing and customer development	Marketing and customer development	94		75		25.3		226		215				5.1		Marketing and customer development	105		94		11.7		282		226		24.8
Operating lease depreciation	Operating lease depreciation	47		56		(16.1)		144		204				(29.4)		Operating lease depreciation	45		47		(4.3)		140		144		(2.8)
Loan-related expense	Loan-related expense	52		59		(11.9)		161		177				(9.0)		Loan-related expense	46		52		(11.5)		137		161		(14.9)
Regulatory costs	Regulatory costs	43		34		26.5		99		93				6.5		Regulatory costs	52		43		20.9		131		99		32.3
Merger-related and restructuring charges	Merger-related and restructuring charges	172		236		(27.1)		610		552				10.5		Merger-related and restructuring charges	62		172		(64.0)		399		610		(34.6)
Loss (gain) on early extinguishment of debt	Loss (gain) on early extinguishment of debt	—		—		—		(3)		235				(101.3)		Loss (gain) on early extinguishment of debt	—		—		—		(39)		(3)		NM

Other expense	Other expense	91		163		(44.2)		475		471				0.8		Other expense	172		91		89.0		454		475		(4.4)
Total noninterest expense	Total noninterest expense	$	3,795	$	3,755	1.1		$	11,416	$	11,064			3.2		Total noninterest expense	$	3,613	$	3,795	(4.8)		$	10,867	$	11,416	(4.8)

Third Quarter ~~2021~~2022 compared to Third Quarter ~~2020~~2021

Noninterest expense for the third quarter of ~~2021~~2022 was ~~up $40~~down $182 million, or ~~1.1%~~4.8%, compared to the earlier quarter. Merger-related and restructuring charges decreased ~~$64~~$110 million ~~primarily due to facilities impairments in the earlier quarter, while~~and incremental operating expenses related to the Merger ~~increased $39~~decreased $101 million ~~primarily reflected in professional fees and outside processing.~~due to diminishing integration-related activities. The ~~current~~earlier quarter ~~also includes~~included a $30 million professional fee to develop an ongoing program to identify, prioritize, and roadmap teammate generated revenue growth and expense savings opportunities beyond the ~~Merger. The earlier quarter included $50 million for charitable contributions to the Truist Charitable Fund (other expense).~~ merger.

Excluding the aforementioned items and ~~changes in~~the amortization of intangibles, adjusted noninterest expense ~~was up $110~~increased $64 million, or ~~3.5%~~2.0%, compared to the earlier quarter. ~~Personnel~~Other expense increased ~~$129~~$81 million ($87 million, or 104%, on an adjusted basis) primarily due to ~~higher incentive~~increased operational losses and teammate travel expenses. Professional fees and outside processing expenses decreased $20 million, but was up $70 million, or 33%, on an adjusted basis due to ~~variable compensation from higher revenues~~increased project spend for enterprise technology investments and ~~improved overall performance relative~~increased call center staffing. Equipment expense decreased $32 million ($38 million, or 25%, on an adjusted basis) primarily due to ~~targets, higher medical insurance claims,~~laptop purchases in the prior period. Software expense decreased $26 million ($24 million, or 9.6%, on an adjusted basis) primarily due to lower maintenance expense and ~~personnel cost related~~decommissioned software. Personnel expense decreased $71 million ($32 million, or 1.5%, on an adjusted basis) due to ~~acquired companies,~~lower other employee benefits as a result of the decrease in noninterest income for post-retirement benefits and lower incentives, partially offset by ~~lower equity based compensation. Additionally, net occupancy expense decreased $46 million primarily~~higher salaries due to ~~branch~~annual merit increases, investments in revenue producing businesses and ~~property consolidations. Other expense also includes a decrease of $42 million~~enterprise technology, as well as additional personnel costs for ~~non-service-related pension cost components.~~acquisitions.

46 Truist Financial Corporation 47

Nine Months of ~~2021~~2022 compared to Nine Months of ~~2020~~2021

Noninterest expense for the nine months ended September 30, ~~2021~~2022 was ~~up $352~~down $549 million, or ~~3.2%~~4.8%, compared to the earlier period. Merger-related and restructuring charges ~~increased $58~~decreased $211 million due to diminishing integration-related activities and ~~other incremental~~lower costs in connection with the voluntary separation and retirement program, partially offset by higher costs for client day one conversions. Incremental operating expenses related to the Merger ~~increased $201 million.~~decreased $147 million, primarily reflected in lower personnel and professional fees and outside processing expenses. The current period ~~also~~includes a $39 million gain on the redemption of FHLB advances. The prior period includes $200 million for charitable contributions to the Truist Foundation and the Truist Charitable Fund (other expense), $36 million of expense associated with an acceleration of loss recognition related to certain terminated cash flow hedges ~~the previously mentioned~~(other expense), a $30 million professional fee to develop an ongoing program to identify, prioritize, and roadmap teammate generated revenue growth and expense savings opportunities beyond the merger, and a small gain on the ~~early~~ extinguishment of ~~debt, whereas the earlier period included a $235 million loss on the early extinguishment of debt and a $50 million charitable contribution.~~ debt.

Excluding the aforementioned items and ~~changes in~~the amortization of intangibles, adjusted noninterest expense increased ~~$197~~$122 million, or ~~2.1%~~1.3%, compared to the earlier period. Other expense was up $213 million, or 94%, on an adjusted basis primarily due to increased operational losses and teammate travel expenses. Professional fees and outside processing expenses was stable, but was up $112 million, or 17%, on an adjusted basis due to increased project spend for enterprise technology investments and increased call center staffing. Marketing and customer development expense increased $56 million ($66 million or 31% on an adjusted basis) due to increased spend to continue to build and strengthen Truist’s brand. Personnel expense ~~increased $498~~decreased $267 million ($179 million, or 2.8% on an adjusted basis) primarily driven by ~~higher incentive expenses due to variable compensation from higher revenues and improved overall performance relative to targets, higher~~lower other employee benefits ~~due to~~as a result of the ~~previously mentioned increase~~decrease in noninterest income ~~higher medical insurance claims,~~for post-retirement benefits, lower incentives expenses, and ~~personnel cost related to acquired companies. These increases in personnel expense were~~lower defined benefit costs, partially offset by ~~lower~~higher salaries due to ~~fewer FTEs. Software~~additional personnel costs for acquisitions, annual merit increases, and investments in revenue producing businesses and enterprise technology. Equipment expense ~~increased $60~~decreased $35 million ~~due to higher spending~~($43 million, or 11% on ~~certain projects. Other expense includes decreases of $125 million for non-service-related pension cost components. There was also a decrease of $119 million from net occupancy expense~~an adjusted basis) primarily due to ~~branch and property consolidations and a decrease in operating lease depreciation of $60 million due to valuation adjustments taken~~laptop purchases in the prior ~~year.~~period. Net occupancy expense decreased $13 million ($39 million, or 6.8% on an adjusted basis) primarily due to consolidations of branches and other facilities.

Merger-Related and Restructuring Charges

The following table presents a summary of merger-related and restructuring charges and the related ~~accruals:~~accruals. The 2022 and 2021 merger-related and restructuring costs primarily reflect charges as a result of the Merger, including costs for severance and other benefits, costs related to exiting facilities, and other restructuring initiatives.


Table 4: Merger-Related and Restructuring Accrual Activity	Table 4: Merger-Related and Restructuring Accrual Activity										Table 4: Merger-Related and Restructuring Accrual Activity
		Three Months Ended September 30, 2021								Nine Months Ended September 30, 2021										Three Months Ended September 30, 2022											Nine Months Ended September 30, 2022

(Dollars in millions)	(Dollars in millions)	Accrual at Jul 1, 2021		Expense		Utilized		Accrual at Sep 30, 2021				Accrual at Jan 1, 2021		Expense		Utilized					Accrual at Sep 30, 2021						(Dollars in millions)		Accrual at Jul 1, 2022	Expense	Utilized	Accrual at Sep 30, 2022								Accrual at Jan 1, 2022	Expense	Utilized	Accrual at Sep 30, 2022
Severance and personnel-related (1)		$	152	$	77	$	(154)	$	75			$	36	$	269	$	(230)				$	75
Severance and personnel-related																		Severance and personnel-related	$	28			$	8	$	(20)		$	16				$	77	$	74	$	(135)	$	16
Occupancy and equipment	Occupancy and equipment	5		3		(8)		—				—		110		(110)					—						Occupancy and equipment		—	4	(4)	—								—	119	(119)	—
Professional services	Professional services	28		79		(69)		38				16		197		(175)					38						Professional services		24	19	(30)	13								37	119	(143)	13
Systems conversion and related costs	Systems conversion and related costs	—		9		(9)		—				—		22		(22)					—						Systems conversion and related costs		1	15	(15)	1								—	46	(45)	1
Other	Other	10		4		(4)		10				11		12		(13)					10						Other		2	16	(11)	7								12	41	(46)	7
Total (2)		$	195	$	172	$	(244)	$	123			$	63	$	610	$	(550)				$	123
Total (1)																		Total (1)	$	55			$	62	$	(80)		$	37				$	126	$	399	$	(488)	$	37

(1)~~Includes $189 million of restructuring charges for the nine months ended September 30, 2021 related to the Company’s voluntary separation and retirement program.~~

~~(2)~~Related to the Merger, the Company recognized ~~$170~~$39 million and $344 million of ~~expenses~~expense, respectively, for the three ~~months ended September 30, 2021~~ and ~~$578 million for the~~ nine months ended September 30, ~~2021.~~2022. At September 30, ~~2021,~~2022, the Company had an accrual of ~~$117~~$26 million related to the Merger. The remaining expense and accrual relate to other restructuring activities.

Segment Results

Truist operates and measures business activity across three segments: Consumer Banking and Wealth, Corporate and Commercial Banking, and Insurance Holdings, with functional activities included in Other, Treasury, and Corporate. The Company’s business segment structure is based on the manner in which financial information is evaluated by management as well as the products and services provided or the type of client served. See “Note 18. Operating Segments” herein and “Note 21. Operating Segments” in Truist’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 for additional disclosures related to Truist’s reportable business segments, including additional details related to results of operations. Fluctuations in noninterest income and noninterest expense are more fully discussed in the Noninterest Income and Noninterest Expense sections above.

Table 5: Net Income by Reportable Segment
Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in millions) 2021 2020 % Change 2021 2020 % Change
Consumer Banking and Wealth $ 872 $ 818 6.6 % $ 2,510 $ 2,204 13.9 %
Corporate and Commercial Banking 1,075 586 83.4 3,245 1,408 130.5
Insurance Holdings 105 77 36.4 392 308 27.3
Other, Treasury & Corporate (348) (340) 2.4 (1,312) (758) 73.1
Truist Financial Corporation $ 1,704 $ 1,141 49.3 $ 4,835 $ 3,162 52.9

48 Truist Financial Corporation 47


Table 5: Net Income by Reportable Segment
	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	2022		2021		% Change		2022		2021		% Change
Consumer Banking and Wealth	$	986	$	933	5.7	%	$	2,635	$	2,389	10.3	%
Corporate and Commercial Banking	1,164		1,181		(1.4)		3,126		3,470		(9.9)
Insurance Holdings	95		111		(14.4)		425		404		5.2
Other, Treasury & Corporate	(608)		(521)		(16.7)		(1,601)		(1,428)		(12.1)
Truist Financial Corporation	$	1,637	$	1,704	(3.9)		$	4,585	$	4,835	(5.2)

Third Quarter ~~2021~~2022 compared to Third Quarter ~~2020~~2021

Consumer Banking and Wealth

CB&W net income was ~~$872~~$986 million for the third quarter of ~~2021,~~2022, an increase of ~~$54~~$53 million compared to the earlier quarter. Segment net interest income ~~decreased $155~~increased $495 million primarily ~~due to a decline in the~~driven by favorable funding credit ~~provided~~ on deposits attributable to the higher rate environment and higher average loan balances, partially offset by decreased loan spreads and lower purchase accounting ~~accretion, and a decline in average loans.~~accretion. The allocated provision for credit losses ~~decreased $186~~increased $288 million which reflects the impact of an allowance release during the current quarter and an allowance build during the earlier quarter. The earlier quarter reflected significant uncertainty related to the economic impacts resulting from the pandemic, whereas the current quarter includesreflecting a reserve release ~~due to~~in the ~~improving economic outlook. Noninterest income~~earlier quarter and higher loan growth and increased ~~$35 million due to increases in wealth management income due to favorable market conditions~~charge-offs in the current quarter. Noninterest income decreased $146 million compared to earlier quarter ~~card and related fee~~primarily due to a decrease in residential mortgage income ~~and service charges on deposits,~~as well as a decline in wealth income attributed to market declines. These decreases were partially offset by ~~lower residential mortgage income~~higher card and payment fees driven by ~~lower gain on sale margins and volumes.~~higher consumer spend. Noninterest expense ~~was stable~~decreased $33 million compared to the earlier ~~quarter.~~quarter primarily due to lower merger-related and restructuring charges, net occupancy, and incentive expense, partially offset by increased operational losses.

CB&W average loans and leases held for investment ~~decreased $6.8~~increased $7.7 billion, or ~~4.9%~~5.8%, for the third quarter of ~~2021~~2022 compared to the earlier quarter, primarily driven by ~~lower~~an increase in residential mortgage balances due to correspondent channel production and ~~home equity~~lower prepayments. In addition, indirect other increased primarily due to growth from Service Finance, recreational lending, and Sheffield portfolios, partially offset by runoff in other partnership lending programs. Residential home equity and direct increased ~~indirect auto lending.~~ primarily due to growth from the LightStream portfolio. These increases were partially offset by lower mortgage warehouse lending as well as runoff in student loans.

Average total deposits increased ~~$23~~$6.2 billion, or ~~10.4%~~2.5%, for the third quarter of ~~2021~~2022 compared to the earlier quarter, primarily ~~due to the impact of fiscal~~driven by increases in noninterest bearing deposits, money market and ~~monetary stimulus.~~savings, and interest bearing checking, partially offset by a decline in time deposits.

Corporate and Commercial Banking

C&CB net income was ~~$1.1~~$1.2 billion for the third quarter of ~~2021, an increase~~2022, a decrease of ~~$489~~$17 million compared to the earlier quarter. Segment net interest income ~~decreased $110~~increased $339 million primarily due to ~~reduced~~higher funding credit on deposits and higher average loan balances, partially offset by lower purchase accounting accretion and ~~a decline in average loans, partially offset by higher spreads on loans.~~lower PPP revenue. The allocated provision for credit losses ~~decreased $575~~increased $214 million primarily reflecting an allowance release in the earlier quarter and higher loan growth in the current ~~quarter, whereas~~quarter. Noninterest income decreased $148 million compared to the earlier quarter included an allowance build. The earlier quarter reflected significant uncertainty related to the economic impacts resulting from the pandemic, whereas the current quarter includes a reserve release due to the improving economic outlook. Noninterest income increased $145 million driven by investment banking income, commercial real estate income, and higher investment income (primarily valuation gains) from SBIC investments. Noninterest expense decreased $25 million primarily due to lower ~~operating losses, operating lease depreciation,~~investment banking revenue as well as lower income from the Company’s SBIC and ~~lower allocated corporate expenses in the current quarter,~~other strategic investments, partially offset by higher ~~restructuring charges in~~trading income. Noninterest expense was stable compared to the ~~current~~earlier quarter.

C&CB average loans held for investment ~~decreased $17.6~~increased $17.3 billion, or ~~10.5%~~12%, for the third quarter of ~~2021~~2022 compared to the earlier quarter, primarily due to ~~PPP loan forgiveness and lower line utilization~~increases in commercial and industrial loans, partially offset by decreases in average PPP loans (commercial and industrial) and average commercial real estate and ~~dealer floor plan.~~ construction loans.

Average total deposits ~~increased $8.8~~decreased $5.8 billion, or ~~6.2%~~3.8%, for the third quarter of ~~2021~~2022 compared to the earlier quarter, primarily due to ~~the impact of fiscal~~declines in average interest bearing checking and ~~monetary stimulus.~~money market and savings.

Insurance Holdings

IH net income was ~~$105~~$95 million for the third quarter of ~~2021, an increase~~2022, a decrease of ~~$28~~$16 million compared to the earlier quarter. Noninterest income increased ~~$128~~$82 million primarily due to ~~acquisitions~~continued organic growth and ~~higher property and casualty insurance production from strong organic growth.~~acquisitions. Noninterest expense increased ~~$91~~$103 million primarily due to higher performance-based incentives, ~~and amortization~~in addition to the impact of ~~intangibles related to~~ acquisitions.

48 Truist Financial Corporation

Other, Treasury & Corporate

OT&C generated a net loss of ~~$348~~$608 million in the third quarter of ~~2021,~~2022, compared to a net loss of ~~$340~~$521 million in the earlier quarter. ~~Segment net~~Net interest income ~~increased $135~~decreased $327 million primarily due to ~~lower net~~higher funding ~~credits~~credit on ~~liabilities~~deposits to other segments, ~~and~~partially offset by higher earnings in the securities portfolio from ~~purchases~~the higher rate environment. Noninterest income decreased $51 million primarily due to ~~utilize excess liquidity. The allocated provision~~valuation changes from assets held for ~~credit losses increased $15~~certain post-retirement benefits, which is primarily offset by lower personnel expense. Noninterest expense decreased $243 million ~~which primarily reflects a smaller release in the reserve for unfunded commitments in the current quarter~~ compared to the earlier ~~quarter. Noninterest income decreased $153 million primarily due to a gain on sale of securities in the earlier quarter. Noninterest expense decreased $22 million~~quarter primarily due to lower ~~merger~~merger-related and restructuring charges and incremental operating expenses related ~~charges in the current quarter and charitable contributions~~ to the ~~Truist Foundation~~merger as well as lower personnel expense due to lower other employee benefits as a result of the decrease in noninterest income for post-retirement benefits and ~~the Truist Charitable Fund in the earlier quarter,~~lower incentives, partially offset by ~~higher incentive expense driven by executive incentive compensation~~an increase in professional fees and ~~higher accruals reflecting the job regrading~~outside processing due to increased project ~~in the fourth quarter 2020.~~spend for enterprise technology investments.

~~Truist Financial Corporation 49~~

Nine Months of ~~2021~~2022 compared to Nine Months of ~~2020~~2021

Consumer Banking and Wealth

CB&W net income was ~~$2.5~~$2.6 billion for ~~the~~ nine months ended September 30, ~~2021,~~2022, an increase of ~~$306~~$246 million, or 10%, compared to the same period of the prior year. Segment net interest income ~~decreased $325~~increased $900 million primarily due to ~~reduced~~favorable funding credit on deposits attributable to the higher rate environment and higher average loan and deposit balances, partially offset by decreased loan spreads and lower purchase accounting ~~accretion, and a decline in average loans.~~accretion. The allocated provision for credit losses ~~decreased $796~~increased $465 million primarily due to ~~an allowance~~a reserve release ~~that was primarily driven by an improving economic outlook~~in the prior year and ~~lower net~~loan growth and increased charge offs in the ~~auto, home equity, card, and mortgage portfolios as well as lower loan balances.~~current year. Noninterest income decreased ~~$197~~$151 million primarily due to ~~lower~~a decrease in residential mortgage income driven by lower gain on sale margins and volumes, partially offset by increased revenues in wealth management and card and payment related activities resulting from improving economic conditions as well as gains from the divestiture of certain businesses.income. Noninterest expense decreased ~~$120~~$51 million primarily due to lower ~~salary expense, pension costs, amortization of intangibles,~~net occupancy and ~~occupancy~~incentive expenses as well as lower merger-related and restructuring charges, partially offset by increased ~~incentives tied to performance and related benefits expense in the current year.~~operational losses.

CB&W average loans and leases ~~decreased $7.6~~held for investment increased $3.2 billion, or ~~5.4%~~2.4%, atfor the nine months ended September 30, ~~2021,~~2022 compared to the same period of the prior year driven primarily by an increase in residential mortgage loans due to correspondent channel production and lower prepayments. In addition, indirect other consumer increased primarily due to growth from Service Finance, recreational lending, and Sheffield portfolios, partially offset by runoff in other partnership lending programs. These increases were partially offset by lower mortgage warehouse lending as well as runoff in student loans.

CB&W average total deposits increased $14.1 billion, or 5.9%, for the nine months ended September 30, 2022 compared to the same period of the prior year primarily due to ~~lower residential mortgage loans~~increases in average noninterest bearing deposits, money market and ~~home equity lending,~~savings, and interest bearing checking, partially offset by ~~increased mortgage warehouse and indirect auto lending. Average total deposits were up $25.7 billion, or 12%,~~a decline in time deposits.

CB&W had 2,119 banking offices at September 30, ~~2021,~~2022, a decrease of 399 offices compared to September 30, 2021. The decrease in offices was driven primarily by the consolidation of branches as a result of the Merger.

Truist Wealth had assets under management of $173.9 billion as of September 30, 2022, a decrease of $28.8 billion, or 14%, compared to the same period of the prior year primarily due to ~~the impact of fiscal and monetary stimulus.~~market declines, partially offset by net organic asset flows.

Corporate and Commercial Banking

C&CB net income was ~~$3.2~~$3.1 billion for ~~the~~ nine months ended September 30, ~~2021, an increase~~2022, a decrease of ~~$1.8 billion~~$344 million, or 9.9%, compared to the same period of the prior year. Segment net interest income ~~decreased $283~~increased $371 million primarily due to ~~reduced~~higher funding credit on deposits and increases to noninterest bearing deposit balances, partially offset by lower fee income associated with PPP loan forgiveness and lower purchase accounting ~~accretion, and a decline in average loans.~~accretion. The allocated provision for credit losses ~~decreased $1.9 billion~~increased $470 million which reflects anlower allowance ~~release driven~~releases in the current period compared to the prior period, partially offset by ~~an improving economic outlook,~~ lower net ~~charge offs primarily~~charge-offs in the ~~commercial and industrial portfolio as well as lower loan balances.~~current period. Noninterest income ~~increased $570~~decreased $392 million primarily due ~~to strong investment banking~~lower high-yield bond originations, equity originations, merger and ~~trading income, commercial real-estate related income, increased lending related~~acquisition fees ~~income from strategic investments,~~ and ~~increased service charges on deposits.~~loan syndications. Noninterest expense decreased ~~$174~~$56 million primarily due to lower incentive expense tied to lower revenues as well as lower merger-related and restructuring charges and incremental operating ~~lease depreciation, lower allocated corporate~~ expenses ~~a reduction~~related to the Merger given diminishing integration-related activities in ~~LIHTC liability mark accretion, and reduced salary and equity based compensation expense,~~the current period, partially offset by ~~higher incentives tied to performance and increased professional fees and outside processing expense.~~investments in revenue producers.

C&CB average loans and leases ~~decreased $14~~held for investment increased $6.8 billion, or ~~8.3%~~4.4%, atfor the nine months ended September 30, ~~2021,~~2022 compared to the same period of the prior year. Excluding a $6.7 billion decrease in average PPP loans, average loans held for investment were up $13.5 billion, or 9.2%, primarily driven by an increase in the commercial and industrial portfolio loans due to higher revolver utilization, partially offset by a decrease in average commercial real estate and commercial construction loans.

C&CB average total deposits increased $552 million, or 0.4%, for the nine months ended September 30, 2022 compared to the same period of the prior year primarily due to ~~lower line utilization~~an increase in ~~commercial loans, commercial real estate, and dealer floor plan. Average total~~average noninterest bearing deposits, ~~were up $12.5 billion, or 9.3%, at September 30, 2021, compared to the same period of the prior year, primarily due to the impact of fiscal and monetary stimulus.~~partially offset by a decrease in interest bearing deposits.

Truist Financial Corporation 49

Insurance Holdings

IH net income was ~~$392~~$425 million for ~~the~~ nine months ended September 30, ~~2021,~~2022, an increase of ~~$84~~$21 million, or 5.2%, compared to the same period of the prior year. Noninterest income increased ~~$304~~$320 million, or 16%, primarily due to ~~higher property~~acquisitions and ~~casualty insurance production as well as acquisitions.~~organic growth. Noninterest expense increased ~~$198~~$291 million, or 19%, primarily due to commissions on higher production and higher salaries in the current ~~year.~~year along with higher amortization of intangibles and operating expenses related to acquisitions.

Other, Treasury, and Corporate

OT&C generated a net loss of ~~$1.3~~$1.6 billion in the nine months ended September 30, ~~2021,~~2022, compared to a net loss of ~~$758 million~~$1.4 billion in the same period of the prior year. Segment net interest income decreased ~~$84~~$707 million due to higher funding credit on deposits to other segments, partially offset by higher earnings in the securities portfolio from the higher rate environment and growth in the securities portfolio. Noninterest income decreased $252 million primarily due to valuation changes from assets held for certain post-retirement benefits, which is primarily offset by lower personnel expense, and losses on the sale of securities in the current year. Noninterest expense decreased $733 million primarily due to lower ~~net funding credits to other segments~~personnel expense due to lower market rates partially offset by lower interest expense on borrowings. The allocated provision for credit losses decreased $124 million which primarily reflects changes in the reserve for unfunded commitmentsother employee benefits as ~~well as an allowance release in the current year resulting from the improving economic outlook. Noninterest income decreased $304 million primarily due to~~ a ~~gain on the sale of non-agency MBS in the same period~~result of the ~~prior year, partially offset by~~decrease in noninterest income ~~from assets held~~ for ~~certain post-employment benefits. Noninterest expense increased $448 million primarily due to~~post-retirement benefits and lower incentives, charitable contributions to the Truist Foundation and the Truist Charitable Fund ~~as well as higher~~in the prior year, and lower merger-related and restructuring charges and incremental operating expenses related to the ~~Merger and higher restructuring charges in the current year, partially offset by the loss on early extinguishment of long-term debt in the same period of the prior year.~~Merger.

~~50 Truist Financial Corporation~~

Analysis of Financial Condition

Investment Activities

The securities portfolio totaled ~~$151.0~~$131.7 billion at September 30, ~~2021,~~2022, compared to ~~$120.8~~$154.6 billion at December 31, ~~2020.~~2021. The ~~increase~~decrease includes paydowns and maturities of $14.6 billion, as well as market declines of $14.2 billion, partially offset by purchases. In the first quarter of 2022, Truist transferred $59.4 billion of AFS securities to HTM as the Company continues to execute upon its asset-liability management strategies. As of September 30, 2022, 41% of the investment securities portfolio was ~~due primarily to increases in U.S. Treasury securities and MBS resulting from strong deposit growth resulting from fiscal and monetary stimulus.~~held-to-maturity based on amortized cost.

As of September 30, ~~2021,~~2022, approximately ~~2.9%~~5.7% of the securities portfolio was variable rate, excluding the impact of swaps, compared to ~~1.9%~~4.6% as of December 31, ~~2020.~~2021. The effective duration of the securities portfolio was ~~5.6~~6.8 years at September 30, ~~2021,~~2022, compared to ~~4.0~~5.8 years at December 31, ~~2020.~~2021, excluding the impact of unsettled security purchases at period end. The increase in duration was driven by higher rates, resulting in slower prepayments and longer average lives for the MBS portfolio.

U.S. Treasury, GSE, and Agency MBS represents ~~98%~~97% of the total securities portfolio as of September 30, ~~2021~~2022 and ~~more than 99% at~~ December 31, ~~2020.~~2021. While the overwhelming majority of the portfolio remains in agency MBS securities, the Company also holds AAA rated non-agency MBS as the risk adjusted returns for these securities are more attractive than agency MBS.

50 Truist Financial Corporation

Lending Activities

The following table presents the composition of average loans and leases:


Table 6: Average Loans and Leases	Table 6: Average Loans and Leases											Table 6: Average Loans and Leases
For the Three Months Ended (Dollars in millions)	For the Three Months Ended (Dollars in millions)	Sep 30, 2021		Jun 30, 2021		Mar 31, 2021		Dec 31, 2020		Sep 30, 2020		For the Three Months Ended (Dollars in millions)	Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021
Commercial:	Commercial:											Commercial:
Commercial and industrial	Commercial and industrial	$	130,025	$	133,646	$	136,051	$	139,223	$	143,452	Commercial and industrial	$	152,123	$	145,558	$	138,872	$	134,804	$	134,942
CRE	CRE	24,849		25,645		26,211		27,030		27,761		CRE	22,245		22,508		23,555		24,396		24,849
Commercial construction	Commercial construction	5,969		6,359		6,557		6,616		6,861		Commercial construction	5,284		5,256		5,046		5,341		5,969
Lease financing		4,917		4,893		4,975		5,401		5,626

Consumer:	Consumer:											Consumer:
Residential mortgage	Residential mortgage	45,369		43,605		45,823		48,847		51,500		Residential mortgage	53,271		49,237		47,976		47,185		45,369
Residential home equity and direct	Residential home equity and direct	25,242		25,238		25,658		26,327		26,726		Residential home equity and direct	25,394		25,124		24,883		25,146		25,242
Indirect auto	Indirect auto	26,830		26,444		26,363		25,788		24,732		Indirect auto	28,057		26,496		26,088		26,841		26,830
Indirect other	Indirect other	11,112		10,797		10,848		11,291		11,530		Indirect other	12,300		11,471		10,860		10,978		11,112
Student	Student	7,214		7,396		7,519		7,519		7,446		Student	5,958		6,331		6,648		6,884		7,214
Credit card	Credit card	4,632		4,552		4,645		4,818		4,810		Credit card	4,755		4,728		4,682		4,769		4,632

Total average loans and leases HFI	Total average loans and leases HFI	$	286,159	$	288,575	$	294,650	$	302,860	$	310,444	Total average loans and leases HFI	$	309,387	$	296,709	$	288,610	$	286,344	$	286,159

Average loans and leases held for investment for the third quarter of ~~2021~~2022 were ~~$286.2~~$309.4 billion, ~~down $2.4~~up $12.7 billion, or ~~0.8%~~4.3%, compared to the second quarter of ~~2021.~~2022.

Average commercial loans ~~decreased $4.8~~increased $6.3 billion, or ~~2.8%~~3.7%, ~~as $1.5~~due to broad-based growth of $6.6 billion, ~~of average growth~~or 4.5%, within the ~~core~~ commercial and industrial portfolio was more than offset by a $4.0 billion decrease in average Paycheck Protection Program loans (commercial and industrial), a $1.1 billion decrease in average dealer floor plan loans (commercial and industrial), a $796 million decrease in average CRE loans, and a $390 million decrease in average commercial construction loans. Approximately $600 million of senior care facility loans were transferred primarily from CRE to commercial and industrial at the beginning of August, which impacted the variances noted above.portfolio.

Average consumer loans increased ~~$2.3~~$6.3 billion, or ~~2.0%~~5.3%, ~~primarily~~ due to a ~~$1.8~~$4.0 billion increase in residential mortgages due to ~~increased capacity, lower prepayments, and the decision to balance sheet certain production from the~~ correspondent channel ~~a $386 million increase in~~production and lower prepayments. In addition, indirect auto ~~loans~~increased $1.6 billion primarily ~~due to solid growth~~ in the prime ~~automobile~~ segment of the portfolio and ~~a $315~~indirect other increased $829 million ~~increase in other indirect loans~~ primarily due to growth from the Service Finance, recreational lending and Sheffield portfolios, partially offset by runoff in ~~recreational and power sports lending.~~other partnership lending programs. Residential home equity and direct ~~loans were up slightly~~increased $270 million, primarily due to ~~solid~~ growth from the LightStream ~~more than offsetting the decline~~portfolio. These increases were partially offset by $373 million of runoff in ~~home equity lines~~student loans.

At September 30, 2022 and December 31, 2021, 52% of ~~credit.~~loans and leases HFI were variable rate.

Truist Financial Corporation 51

~~COVID-19 Lending Activities~~Asset Quality

The CARES Act created the PPP, which has temporarily expanded the Small Business Administration’s business loan guarantee program. The carrying value of PPP loans was $3.5 billion as of September 30, 2021. The CARES Act additionally includes provisions that were designed to encourage financial institutions to support borrowers impacted by COVID-19. These modifications are generally not considered a TDR. Refer to “Note 1. Basis of Presentation” in Truist’s Annual Report on Form 10-K for the year ended December 31, 2020 for additional disclosures related to modifications and TDRs. Payment relief assistance includes forbearance, deferrals, extension and re-aging programs, along with certain other modification strategies. The following ~~table provides a summary of accommodations as of September 30, 2021:~~
Table 7: Client Accommodations (1)
Active Accommodations Exited Accommodations
September 30, 2021
(Dollars in millions) Total Count Outstanding Balance Outstanding Balance % Paid-off or Current (2) Types of Accommodations
Commercial 324 $ 4 $ 17,297 98 % Clients may elect to defer loan or lease payments for up to 90 days without late fees being incurred but with finance charges continuing to accrue.
Consumer 13,715 553 8,292 87 Clients may elect to defer loan payments for time periods that generally range from 30 to 90 days without late fees being incurred but with finance charges generally continuing to accrue. The Company’s residential mortgage forbearance program generally provides up to 180 days of relief. Additional relief may be provided in certain circumstances.
Credit card 454 2 156 88 Clients may elect to defer payments for up to 90 days without late fees being incurred but with finance charges accruing. In addition, Truist provided credit card clients with 5% cash back on qualifying card purchases for certain important basic needs.
Total 14,493 $ 559 $ 25,745
tables summarize asset quality information:

~~(1)Excludes approximately 9,000 client accommodations related to government guaranteed loans totaling approximately $1.2 billion.~~

~~(2)Calculated based on accommodation count; includes loans that are less than 30 days past due.~~

~~The following table provides a summary of the Company’s exposure related to loans that have exited accommodations:~~



~~Table 8: Accommodations Exposure~~
September 30, 2021 (Dollars in millions)	~~Exposure~~
~~Current~~	$	~~24,513~~
~~Past due and still accruing~~	~~492~~
~~Nonperforming~~	~~740~~
~~Total~~	$	~~25,745~~

The following table provides a summary of exposure to industries that management believes were more vulnerable during the COVID-19 pandemic. These selected industry exposures represent 8.8% of loans held for investment at September 30, 2021. Truist is actively managing these portfolios and will continue to make underwriting or risk acceptance adjustments as appropriate.
Table 9: Selected Credit Exposures
September 30, 2021
(Dollars in billions) Outstanding Balance Percentage of Loans HFI
Senior Care $ 6.7 2.4 %
Hotels, Resorts & Cruise Lines 5.7 2.0
Acute Care Facilities 4.9 1.7
Oil & Gas Portfolio 3.8 1.3
Restaurants 2.4 0.8
Sensitive Retail 1.7 0.6
Total $ 25.2 8.8 %


Table 7: Asset Quality
(Dollars in millions)	Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021
NPAs:
NPLs:
Commercial and industrial	$	443	$	393	$	330	$	394	$	423
CRE	5		19		27		29		20
Commercial construction	—		—		—		7		7

Residential mortgage	227		269		315		296		306
Residential home equity and direct	166		159		141		141		146
Indirect auto	260		244		227		218		172
Indirect other	5		6		4		5		6

Total NPLs HFI	1,106		1,090		1,044		1,090		1,080
Loans held for sale	72		33		39		22		76
Total nonaccrual loans and leases	1,178		1,123		1,083		1,112		1,156
Foreclosed real estate	4		3		3		8		9
Other foreclosed property	58		47		49		43		39
Total nonperforming assets	$	1,240	$	1,173	$	1,135	$	1,163	$	1,204
TDRs:
Performing TDRs:
Commercial and industrial	$	165	$	105	$	104	$	147	$	200
CRE	5		5		5		5		8
Commercial construction	1		1		1		—		—

Residential mortgage - government guaranteed	839		761		622		480		507
Residential mortgage - nonguaranteed	305		281		244		212		205
Residential home equity and direct	78		84		91		98		105
Indirect auto	425		401		392		389		390
Indirect other	7		6		6		7		7

Student - nonguaranteed	29		27		25		25		23
Credit card	19		22		25		27		30
Total performing TDRs	1,873		1,693		1,515		1,390		1,475
Nonperforming TDRs	187		204		189		152		159
Total TDRs	$	2,060	$	1,897	$	1,704	$	1,542	$	1,634
Loans 90 days or more past due and still accruing:
Commercial and industrial	$	44	$	27	$	22	$	13	$	18
CRE	1		3		—		—		—
Commercial construction	—		3		—		—		—

Residential mortgage - government guaranteed	808		884		996		978		823
Residential mortgage - nonguaranteed	26		27		31		31		29
Residential home equity and direct	12		10		12		9		7
Indirect auto	1		1		1		1		2
Indirect other	6		3		2		3		2
Student - government guaranteed	770		796		818		864		965
Student - nonguaranteed	5		5		4		4		3
Credit card	36		28		28		27		23

Total loans 90 days or more past due and still accruing	$	1,709	$	1,787	$	1,914	$	1,930	$	1,872
Loans 30-89 days past due and still accruing:
Commercial and industrial	$	162	$	223	$	280	$	130	$	135
CRE	15		10		13		20		4
Commercial construction	3		4		1		2		2

Residential mortgage - government guaranteed	234		233		216		256		264
Residential mortgage - nonguaranteed	300		302		326		258		231
Residential home equity and direct	122		156		142		107		81
Indirect auto	591		584		529		607		560
Indirect other	97		78		65		64		53
Student - government guaranteed	375		447		476		549		451
Student - nonguaranteed	6		6		6		6		5
Credit card	52		48		47		45		37

Total loans 30-89 days past due and still accruing	$	1,957	$	2,091	$	2,101	$	2,044	$	1,823

52 Truist Financial Corporation

~~Asset Quality~~

~~The following tables summarize asset quality information:~~
Table 10: Asset Quality
(Dollars in millions) Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020
NPAs:
NPLs:
Commercial and industrial $ 411 $ 397 $ 451 $ 532 $ 507
CRE 20 25 58 75 52
Commercial construction 7 12 13 14 7
Lease financing 12 5 23 28 32
Residential mortgage 306 302 290 316 205
Residential home equity and direct 146 165 172 205 180
Indirect auto 172 148 158 155 137
Indirect other 6 6 6 5 4
Total NPLs HFI 1,080 1,060 1,171 1,330 1,124
Loans held for sale 76 78 72 5 130
Total nonaccrual loans and leases 1,156 1,138 1,243 1,335 1,254
Foreclosed real estate 9 13 18 20 30
Other foreclosed property 39 41 38 32 30
Total nonperforming assets $ 1,204 $ 1,192 $ 1,299 $ 1,387 $ 1,314
TDRs:
Performing TDRs:
Commercial and industrial $ 144 $ 144 $ 142 $ 78 $ 84
CRE 8 24 47 47 36
Commercial construction — — — — 1
Lease financing 56 58 59 60 1
Residential mortgage 712 727 733 648 640
Residential home equity and direct 105 107 109 88 71
Indirect auto 390 389 399 392 336
Indirect other 7 7 7 6 5
Student 23 13 8 5 5
Credit card 30 32 35 37 38
Total performing TDRs 1,475 1,501 1,539 1,361 1,217
Nonperforming TDRs 159 190 207 164 140
Total TDRs $ 1,634 $ 1,691 $ 1,746 $ 1,525 $ 1,357
Loans 90 days or more past due and still accruing: (1)
Commercial and industrial $ 2 $ 14 $ 14 $ 13 $ 6
CRE — — — — 8
Lease financing 16 — — — —
Residential mortgage 852 976 975 841 573
Residential home equity and direct 7 7 11 10 5
Indirect auto 2 2 2 2 8
Indirect other 2 1 1 2 3
Student 968 1,046 1,037 1,111 570
Credit card 23 22 32 29 24
Total loans 90 days or more past due and still accruing $ 1,872 $ 2,068 $ 2,072 $ 2,008 $ 1,197
Loans 30-89 days past due and still accruing: (1)
Commercial and industrial $ 131 $ 128 $ 117 $ 83 $ 155
CRE 4 7 9 14 7
Commercial construction 2 1 4 5 —
Lease financing 4 18 35 6 9
Residential mortgage 495 543 577 782 796
Residential home equity and direct 81 73 82 98 103
Indirect auto 560 428 328 495 321
Indirect other 53 47 45 68 52
Student 456 548 556 618 666
Credit card 37 31 35 51 39
Total loans 30-89 days past due and still accruing $ 1,823 $ 1,824 $ 1,788 $ 2,220 $ 2,148

~~(1)The past due status of loans that received a deferral under the CARES Act is generally frozen during the deferral period.~~

~~Truist Financial Corporation 53~~

Nonperforming assets totaled $1.2 billion at September 30, ~~2021,~~2022, up ~~$12~~$67 million compared to June 30, ~~2021.~~2022 due to an increase in the commercial and industrial portfolio and nonperforming loans held for sale. Nonperforming loans and leases ~~represented 0.40%~~held for investment were 0.35% of ~~total~~ loans and leases upheld for investment at September 30, 2022, down one basis point compared to June 30, ~~2021.~~2022.

Performing TDRs were ~~down $26~~up $180 million compared to the prior quarter primarily due to ~~declines~~increases in the government guaranteed residential mortgage and ~~CRE~~the commercial and industrial portfolios.

Loans 90 days or more past due and still accruing totaled ~~$1.9~~$1.7 billion at September 30, ~~2021,~~2022, down ~~$196~~$78 million, ~~compared to the prior quarter. The ratio of loans 90 days~~ or ~~more past due and still accruing~~five basis points, as a percentage of loans and leases ~~was 0.66% at September 30, 2021, down six basis points from~~compared with the prior ~~quarter. The~~quarter primarily due to a decline in ~~loans 90 days or more past due and still accruing was primarily in~~government guaranteed residential ~~mortgages and student loans.~~mortgages. Excluding government guaranteed loans, the ratio of loans 90 days or more past due and still accruing as a percentage of loans and leases was ~~0.03%~~0.04% at September 30, ~~2021, down one basis point~~2022, flat from June 30, ~~2021.~~2022.

Loans 30-89 days past due and still accruing of ~~$1.8~~$2.0 billion at September 30, ~~2021~~2022 were ~~stable~~down $134 million, or seven basis points as a percentage of loans and leases, compared to the prior ~~quarter.~~quarter primarily due to declines in the commercial and industrial and student loan portfolios.

Problem loans include NPLs and loans that are 90 days or more past due and still accruing as disclosed in Table ~~10.~~7. In addition, for the commercial portfolio segment, loans that are rated special mention or substandard performing are closely monitored by management as potential problem loans. Refer to “Note 5. Loans and ACL” for the amortized cost basis of loans by origination year and credit quality indicator as well as additional disclosures related to ~~these potential problem loans.~~NPLs.
Table 11: Asset Quality Ratios
As of / For the Three Months Ended Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020
Loans 30-89 days past due and still accruing as a percentage of loans and leases HFI 0.64 % 0.64 % 0.61 % 0.74 % 0.70 %
Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI 0.66 0.72 0.71 0.67 0.39
NPLs as a percentage of loans and leases HFI 0.38 0.37 0.40 0.44 0.37
NPLs as a percentage of total loans and leases (1) 0.40 0.39 0.42 0.44 0.40
NPAs as a percentage of:
Total assets (1) 0.23 0.23 0.25 0.27 0.26
Loans and leases HFI plus foreclosed property 0.40 0.39 0.42 0.46 0.39
Net charge-offs as a percentage of average loans and leases HFI 0.19 0.20 0.33 0.27 0.42
ALLL as a percentage of loans and leases HFI 1.65 1.79 1.94 1.95 1.91
Ratio of ALLL to:
Net charge-offs 8.79x 8.98x 5.87x 7.15x 4.52x
NPLs 4.35x 4.83x 4.84x 4.39x 5.22x
Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI, excluding PPP and other government guaranteed (2) 0.03 % 0.04 % 0.04 % 0.04 % 0.03 %

~~Applicable ratios are annualized.~~


Table 8: Asset Quality Ratios
	Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021
Loans 30-89 days past due and still accruing as a percentage of loans and leases HFI	0.62	%	0.69	%	0.72	%	0.71	%	0.64	%
Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI	0.54		0.59		0.66		0.67		0.66
NPLs as a percentage of loans and leases HFI	0.35		0.36		0.36		0.38		0.38
NPLs as a percentage of total loans and leases (1)	0.37		0.37		0.37		0.38		0.40
NPAs as a percentage of:
Total assets (1)	0.23		0.22		0.21		0.21		0.23
Loans and leases HFI plus foreclosed property	0.37		0.38		0.38		0.39		0.40

ALLL as a percentage of loans and leases HFI	1.34		1.38		1.44		1.53		1.65


Ratio of ALLL to NPLs	3.80x		3.84x		3.99x		4.07x		4.35x
Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI, excluding PPP and other government guaranteed (2)	0.04	%	0.04	%	0.04	%	0.03	%	0.03	%

(1)Includes LHFS.

(2)This asset quality ratio has been adjusted to remove the impact of government guaranteed ~~mortgage, student, and PPP~~ loans. Management believes the inclusion of such assets in this asset quality ratio results in distortion of this ratio ~~such that it might not be reflective~~because collection of ~~asset collectability~~principal and interest is reasonably assured or the ratio might not be comparable to other periods presented or to other portfolios that do not have government guarantees.


Table 9: Asset Quality Ratios (Continued)
For the Three Months Ended	Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021
Net charge-offs as a percentage of average loans and leases HFI:
Commercial:
Commercial and industrial	0.02	%	0.01	%	0.04	%	0.09	%	0.04	%
CRE	(0.01)		(0.10)		0.01		0.07		—
Commercial construction	(0.10)		(0.08)		(0.02)		(0.10)		(0.06)

Consumer:
Residential mortgage	0.01		(0.02)		(0.03)		(0.02)		0.04
Residential home equity and direct	1.01		1.04		0.61		0.49		0.49
Indirect auto	1.15		0.77		1.23		1.01		0.75
Indirect other	0.66		0.43		0.48		0.39		0.26
Student	0.40		0.30		0.33		0.65		0.31
Credit card	2.80		2.63		2.77		2.31		1.90
Total	0.27		0.22		0.25		0.25		0.19

Ratio of ALLL to net charge-offs	4.98x		6.54x		5.78x		6.14x		8.79x

Ratios are annualized, as applicable.

Truist Financial Corporation 53

The following table presents activity related to NPAs:


Table 12: Rollforward of NPAs
Table 10: Rollforward of NPAs						Table 10: Rollforward of NPAs
(Dollars in millions)	(Dollars in millions)	2021		2020		(Dollars in millions)	2022		2021
Balance, January 1	Balance, January 1	$	1,387	$	684	Balance, January 1	$	1,163	$	1,387
New NPAs ~~(1)~~	New NPAs ~~(1)~~	1,580		2,467		New NPAs ~~(1)~~	1,452		1,580
Advances and principal increases	Advances and principal increases	280		255		Advances and principal increases	307		280
Disposals of foreclosed assets ~~(2)~~(1)	Disposals of foreclosed assets ~~(2)~~(1)	(297)		(333)		Disposals of foreclosed assets ~~(2)~~(1)	(331)		(297)
Disposals of NPLs ~~(3)~~(2)	Disposals of NPLs ~~(3)~~(2)	(203)		(521)		Disposals of NPLs ~~(3)~~(2)	(80)		(203)
Charge-offs and losses	Charge-offs and losses	(279)		(443)		Charge-offs and losses	(332)		(279)
Payments	Payments	(775)		(553)		Payments	(590)		(775)
Transfers to performing status	Transfers to performing status	(445)		(258)		Transfers to performing status	(364)		(445)
Other, net	Other, net	(44)		16		Other, net	15		(44)
Ending balance, September 30	Ending balance, September 30	$	1,204	$	1,314	Ending balance, September 30	$	1,240	$	1,204

(1)~~For 2020, includes approximately $500 million of loans previously classified as PCI that would have otherwise been nonperforming as of December 31, 2019.~~

~~(2)~~Includes charge-offs and losses recorded upon sale of ~~$95~~$87 million and ~~$99~~$95 million for the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

~~(3)~~(2)Includes a net gain upon sale of $1 million and charge-offs and losses recorded upon sale of $1 million ~~and $126 million~~ for the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

TDRs occur when a borrower is experiencing, or is expected to experience, financial difficulties in the near term and a concession has been granted to the borrower. As a result, Truist works with borrowers to prevent further difficulties and to improve the likelihood of recovery on a loan. To facilitate this process, a concessionary modification that would not otherwise be considered may be granted, resulting in classification of the loan as a TDR. In accordance with the CARES Act, Truist implemented loan modification programs in response to the COVID-19 pandemic in order to provide borrowers with flexibility with respect to repayment terms. Payment relief assistance provided by Truist includes forbearance, deferrals, extension, and re-aging programs, along with certain other modification strategies. The Company adopted certain provisions of the CARES Act and other regulatory guidance that provide relief from the requirement to apply TDR accounting to (1) certain modifications of federally backed mortgages upon request from the borrower, and (2) certain modifications of other non-federally backed mortgages for borrowers impacted by the COVID-19 pandemic that were less than 30 days past due at December 31, 2019. Refer to “Note 1. Basis of Presentation” in Truist’s Annual Report on Form 10-K for the year ended December 31, 2020 for the policies related to TDRs and COVID-19 loan modifications.

TDRs identified by SunTrust prior to the Merger date are not included in Truist’s TDR disclosure because all such loans were recorded at fair value and a new accounting basis was established as of the Merger date. Subsequent modifications are evaluated for potential treatment as TDRs in accordance with Truist’s accounting policies.

The following table provides a summary of performing TDR activity:


Table 13: Rollforward of Performing TDRs
Table 11: Rollforward of Performing TDRs						Table 11: Rollforward of Performing TDRs
(Dollars in millions)	(Dollars in millions)	2021		2020		(Dollars in millions)	2022		2021
Balance, January 1	Balance, January 1	$	1,361	$	980	Balance, January 1	$	1,390	$	1,361
Inflows	Inflows	548		599		Inflows	842		548
Payments and payoffs (1)	Payments and payoffs (1)	(283)		(113)		Payments and payoffs (1)	(196)		(283)
Charge-offs	Charge-offs	(33)		(34)		Charge-offs	(25)		(33)
Transfers to nonperforming TDRs (2)	Transfers to nonperforming TDRs (2)	(31)		(66)		Transfers to nonperforming TDRs (2)	(45)		(31)
Removal due to the passage of time	Removal due to the passage of time	(10)		(6)		Removal due to the passage of time	(72)		(10)
Non-concessionary re-modifications	Non-concessionary re-modifications	(15)		(2)		Non-concessionary re-modifications	(1)		(15)

Transferred to LHFS, sold and other	Transferred to LHFS, sold and other	(62)		(141)		Transferred to LHFS, sold and other	(20)		(62)
Balance, September 30	Balance, September 30	$	1,475	$	1,217	Balance, September 30	$	1,873	$	1,475

(1)Includes scheduled principal payments, prepayments, and payoffs of amounts outstanding.

(2)Represent loans that no longer meet the requirements necessary to reflect the loan in accruing status.

~~Truist Financial Corporation 55~~

The following table provides further details regarding the payment status of TDRs ~~outstanding at September 30, 2021:~~outstanding:


Table 14: Payment Status of TDRs (1)
September 30, 2021 (Dollars in millions)		Current				Past Due 30-89 Days				Past Due 90 Days Or More				Total
Table 12: Payment Status of TDRs (1)																Table 12: Payment Status of TDRs (1)
September 30, 2022 (Dollars in millions)																September 30, 2022 (Dollars in millions)	Current				Past Due 30-89 Days				Past Due 90 Days Or More				Total
Performing TDRs:	Performing TDRs:															Performing TDRs:
Commercial:	Commercial:															Commercial:
Commercial and industrial	Commercial and industrial	$	144	100.0	%	$	—	—	%	$	—	—	%	$	144	Commercial and industrial	$	163	98.8	%	$	1	0.6	%	$	1	0.6	%	$	165
CRE	CRE	8		100.0		—		—		—		—		8		CRE	5		100.0		—		—		—		—		5
Commercial construction																Commercial construction	1		100.0		—		—		—		—		1

Lease financing		56		100.0		—		—		—		—		56
Consumer:	Consumer:															Consumer:
Residential mortgage		482		67.7		81		11.4		149		20.9		712
Residential mortgage - government guaranteed																Residential mortgage - government guaranteed	439		52.4		90		10.7		310		36.9		839
Residential mortgage - nonguaranteed																Residential mortgage - nonguaranteed	268		87.8		28		9.2		9		3.0		305
Residential home equity and direct	Residential home equity and direct	101		96.2		4		3.8		—		—		105		Residential home equity and direct	76		97.4		2		2.6		—		—		78
Indirect auto	Indirect auto	320		82.1		70		17.9		—		—		390		Indirect auto	355		83.5		70		16.5		—		—		425
Indirect other	Indirect other	6		85.7		1		14.3		—		—		7		Indirect other	6		85.7		1		14.3		—		—		7
Student		22		95.7		1		4.3		—		—		23

Student - nonguaranteed																Student - nonguaranteed	26		89.7		2		6.9		1		3.4		29
Credit card	Credit card	26		86.7		3		10.0		1		3.3		30		Credit card	16		84.2		2		10.5		1		5.3		19
Total performing TDRs	Total performing TDRs	1,165		78.9		160		10.9		150		10.2		1,475		Total performing TDRs	1,355		72.3		196		10.5		322		17.2		1,873
Nonperforming TDRs	Nonperforming TDRs	49		30.8		17		10.7		93		58.5		159		Nonperforming TDRs	78		41.7		29		15.5		80		42.8		187
Total TDRs	Total TDRs	$	1,214	74.3		$	177	10.8		$	243	14.9		$	1,634	Total TDRs	$	1,433	69.6		$	225	10.9		$	402	19.5		$	2,060

(1)Past due performing TDRs are included in past due disclosures and nonperforming TDRs are included in NPL disclosures.

5654 Truist Financial Corporation

ACL

Activity related to the ACL is presented in the following tables:


Table 15: Activity in ACL
Table 13: Activity in ACL																Table 13: Activity in ACL
		For the Three Months Ended										For the Nine Months Ended					For the Three Months Ended										Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	Sep 30, 2021		Jun 30, 2021		Mar 31, 2021		Dec 31, 2020		Sep 30, 2020		2021		2020		(Dollars in millions)	Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		2022		2021
Balance, beginning of period	Balance, beginning of period	$	5,436	$	6,011	$	6,199	$	6,229	$	6,133	$	6,199	$	1,889	Balance, beginning of period	$	4,434	$	4,423	$	4,695	$	4,978	$	5,436	$	4,695	$	6,199
CECL adoption - impact to retained earnings before tax		—		—		—		—		—		—		2,762
CECL adoption - reserves on PCD assets		—		—		—		—		—		—		378

Provision for credit losses	Provision for credit losses	(324)		(434)		48		177		421		(710)		2,158		Provision for credit losses	234		171		(95)		(103)		(324)		310		(710)

Charge-offs:	Charge-offs:															Charge-offs:
Commercial and industrial	Commercial and industrial	(57)		(51)		(73)		(84)		(112)		(181)		(274)		Commercial and industrial	(51)		(17)		(31)		(54)		(57)		(99)		(189)
CRE	CRE	(1)		—		(4)		(19)		(44)		(5)		(59)		CRE	—		(1)		(1)		(5)		(1)		(2)		(5)
Commercial construction	Commercial construction	—		—		(2)		(8)		(19)		(2)		(22)		Commercial construction	—		—		(1)		—		—		(1)		(2)
Lease financing		—		(2)		(6)		(4)		(44)		(8)		(50)

Residential mortgage	Residential mortgage	(7)		(4)		(11)		(6)		(4)		(22)		(50)		Residential mortgage	(4)		(2)		(2)		(1)		(7)		(8)		(22)
Residential home equity and direct	Residential home equity and direct	(51)		(57)		(55)		(46)		(52)		(163)		(185)		Residential home equity and direct	(86)		(85)		(58)		(51)		(51)		(229)		(163)
Indirect auto	Indirect auto	(73)		(69)		(105)		(84)		(72)		(247)		(294)		Indirect auto	(103)		(77)		(102)		(89)		(73)		(282)		(247)
Indirect other	Indirect other	(13)		(11)		(17)		(14)		(8)		(41)		(46)		Indirect other	(26)		(18)		(19)		(16)		(13)		(63)		(41)
Student	Student	(6)		(3)		(3)		(3)		(6)		(12)		(20)		Student	(7)		(4)		(6)		(12)		(6)		(17)		(12)
Credit card	Credit card	(31)		(42)		(40)		(35)		(44)		(113)		(147)		Credit card	(42)		(40)		(41)		(37)		(31)		(123)		(113)

Total charge-offs	Total charge-offs	(239)		(239)		(316)		(303)		(405)		(794)		(1,147)		Total charge-offs	(319)		(244)		(261)		(265)		(239)		(824)		(794)
Recoveries:	Recoveries:															Recoveries:
Commercial and industrial	Commercial and industrial	21		20		19		34		20		60		58		Commercial and industrial	43		13		17		23		42		73		84
CRE	CRE	1		4		1		1		—		6		4		CRE	—		6		1		—		1		7		6
Commercial construction	Commercial construction	1		1		1		1		2		3		10		Commercial construction	2		1		1		1		1		4		3
Lease financing		21		3		—		—		4		24		4

Residential mortgage	Residential mortgage	3		5		2		3		3		10		7		Residential mortgage	3		4		6		2		3		13		10
Residential home equity and direct	Residential home equity and direct	20		20		18		20		16		58		46		Residential home equity and direct	23		20		20		21		20		63		58
Indirect auto	Indirect auto	22		27		22		24		22		71		63		Indirect auto	21		26		23		21		22		70		71
Indirect other	Indirect other	5		7		6		5		4		18		18		Indirect other	6		6		6		6		5		18		18
Student	Student	1		—		—		—		—		1		1		Student	—		—		—		—		1		—		1
Credit card	Credit card	9		10		9		10		8		28		22		Credit card	8		9		9		9		9		26		28
Total recoveries	Total recoveries	104		97		78		98		79		279		233		Total recoveries	106		85		83		83		104		274		279
Net charge-offs	Net charge-offs	(135)		(142)		(238)		(205)		(326)		(515)		(914)		Net charge-offs	(213)		(159)		(178)		(182)		(135)		(550)		(515)
Other	Other	1		1		2		(2)		1		4		(44)		Other	—		(1)		1		2		1		—		4
Balance, end of period	Balance, end of period	$	4,978	$	5,436	$	6,011	$	6,199	$	6,229	$	4,978	$	6,229	Balance, end of period	$	4,455	$	4,434	$	4,423	$	4,695	$	4,978	$	4,455	$	4,978
ALLL (excluding PCD loans)		$	4,577	$	4,979	$	5,506	$	5,668	$	5,675
ALLL for PCD loans		125		142		156		167		188

ACL:																ACL:
ALLL																ALLL	$	4,205	$	4,187	$	4,170	$	4,435	$	4,702	$	4,205	$	4,702
RUFC	RUFC	276		315		349		364		366						RUFC	250		247		253		260		276		250		276
Total ACL	Total ACL	$	4,978	$	5,436	$	6,011	$	6,199	$	6,229					Total ACL	$	4,455	$	4,434	$	4,423	$	4,695	$	4,978	$	4,455	$	4,978

Net charge-offs during the third quarter totaled ~~$135~~$213 million, ~~down $7 million~~or 0.27% as a percentage of average loans, and were up five basis points compared to the prior ~~quarter. The net charge-off ratio was 0.19%, down one basis point compared to the prior quarter.~~quarter, primarily driven by normalizing trends and seasonality across certain consumer loan portfolios.

The allowance for credit losses was ~~$5.0~~$4.5 billion and includes ~~$4.7~~$4.2 billion for the allowance for loan and lease losses and ~~$276~~$250 million for the reserve for unfunded commitments. The ALLL ratio was ~~1.65%~~1.34% compared to ~~1.79%~~1.38% at June 30, ~~2021.~~2022. The decline in the ALLL ratio was due to strong portfolio performance and growth in higher quality loans, partially offset by a moderately slower economic outlook. The ALLL covered nonperforming loans and leases held for investment ~~4.35X~~3.80X compared to ~~4.83X~~3.84X at June 30, ~~2021.~~2022. At September 30, ~~2021,~~2022, the ALLL was ~~8.79X~~4.98X annualized net charge-offs, compared to ~~8.98X~~6.54X at June 30, ~~2021.~~2022.

Truist Financial Corporation 5755

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.


Table 16: Allocation of ALLL by Category
		September 30, 2021							December 31, 2020
Table 14: Allocation of ALLL by Category																Table 14: Allocation of ALLL by Category
						September 30, 2022							December 31, 2021
(Dollars in millions)	(Dollars in millions)	Amount		% ALLL in Each Category			% Loans in Each Category		Amount		% ALLL in Each Category			% Loans in Each Category		(Dollars in millions)	Amount		% ALLL in Each Category		% Loans in Each Category		Amount		% ALLL in Each Category		% Loans in Each Category
Commercial and industrial	Commercial and industrial	$	1,541	32.7	%		45.2	%	$	2,156	37.0	%		46.2	%	Commercial and industrial	$	1,301	31.0	%	48.8	%	$	1,426	32.2	%	47.9	%
CRE	CRE	370		7.9			8.5		573		9.8			8.9		CRE	234		5.6		7.2		350		7.9		8.3
Commercial construction	Commercial construction	59		1.3			2.0		81		1.4			2.2		Commercial construction	47		1.1		1.8		52		1.2		1.7
Lease financing		31		0.7			1.7		48		0.8			1.7

Residential mortgage	Residential mortgage	311		6.6			16.4		368		6.3			15.8		Residential mortgage	376		8.9		17.7		308		6.9		16.5
Residential home equity and direct	Residential home equity and direct	645		13.7			8.8		714		12.2			8.7		Residential home equity and direct	569		13.5		8.2		615		13.9		8.7
Indirect auto	Indirect auto	1,071		22.8			9.4		1,198		20.5			8.7		Indirect auto	966		23.0		9.0		1,022		23.0		9.1
Indirect other	Indirect other	194		4.1			3.9		208		3.6			3.7		Indirect other	269		6.4		4.0		195		4.4		3.8
Student	Student	126		2.7			2.5		130		2.2			2.5		Student	93		2.2		1.8		117		2.6		2.3
Credit card	Credit card	354		7.5			1.6		359		6.2			1.6		Credit card	350		8.3		1.5		350		7.9		1.7
Total ALLL	Total ALLL	4,702		100.0	%		100.0	%	5,835		100.0	%		100.0	%	Total ALLL	4,205		100.0	%	100.0	%	4,435		100.0	%	100.0	%
RUFC	RUFC	276							364							RUFC	250						260
Total ACL	Total ACL	$	4,978						$	6,199						Total ACL	$	4,455					$	4,695

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 also receives notification when the first lien holder, whether Truist or another financial institution, has initiated foreclosure proceedings against the borrower. When notified that the first lien is in the process of foreclosure, Truist obtains valuations to determine if any additional charge-offs or reserves are warranted. These valuations are updated at least annually thereafter.

Truist has limited ability to monitor the delinquency status of the first lien, unless the first lien is held or serviced by Truist. Truist estimates credit losses on second lien loans where the first lien is delinquent based on historical experience; the increased risk of loss on these credits is reflected in the ALLL. As of September 30, ~~2021,~~2022, Truist held or serviced the first lien on ~~30%~~32% of its second lien positions.

Other Assets

The components of other assets are presented in the following table:


Table 17: Other Assets as of Period End
Table 15: Other Assets as of Period End						Table 15: Other Assets as of Period End
(Dollars in millions)	(Dollars in millions)	September 30, 2021		December 31, 2020		(Dollars in millions)	Sep 30, 2022		Dec 31, 2021

Bank-owned life insurance	Bank-owned life insurance	$	6,512	$	6,479	Bank-owned life insurance	$	7,595	$	7,281
Tax credit and other private equity investments	Tax credit and other private equity investments	6,012		5,685		Tax credit and other private equity investments	6,572		6,309
Prepaid pension assets	Prepaid pension assets	4,814		4,358		Prepaid pension assets	6,464		5,938
DTAs						DTAs	2,607		—
Derivative assets	Derivative assets	2,976		3,837		Derivative assets	1,140		2,370
Accrued income		1,841		1,934
Accounts receivable	Accounts receivable	1,910		1,833		Accounts receivable	2,492		2,244
Leased assets and related assets	Leased assets and related assets	1,846		1,810		Leased assets and related assets	2,244		2,092
Accrued income						Accrued income	1,996		1,791
ROU assets	ROU assets	1,207		1,333		ROU assets	1,116		1,168
Prepaid expenses	Prepaid expenses	1,091		1,247		Prepaid expenses	1,120		1,152
Equity securities at fair value	Equity securities at fair value	1,026		1,054		Equity securities at fair value	887		1,066
Structured real estate		322		390
FHLB stock		48		164

Other	Other	446		549		Other	1,464		738
Total other assets	Total other assets	$	30,051	$	30,673	Total other assets	$	35,697	$	32,149

~~58 Truist Financial Corporation~~

Funding Activities

Deposits

The following table presents average deposits:


Table 18: Average Deposits
Table 16: Average Deposits												Table 16: Average Deposits
Three Months Ended (Dollars in millions)	Three Months Ended (Dollars in millions)	Sep 30, 2021		Jun 30, 2021		Mar 31, 2021		Dec 31, 2020		Sep 30, 2020		Three Months Ended (Dollars in millions)	Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021
Noninterest-bearing deposits	Noninterest-bearing deposits	$	141,738	$	137,892	$	128,579	$	127,103	$	123,966	Noninterest-bearing deposits	$	146,041	$	148,610	$	145,933	$	146,492	$	141,738
Interest checking	Interest checking	107,802		106,121		104,744		99,866		96,707		Interest checking	111,645		112,375		112,159		110,506		107,802
Money market and savings	Money market and savings	136,094		134,029		129,303		124,692		123,598		Money market and savings	147,659		148,632		141,500		137,676		136,094
Time deposits	Time deposits	17,094		18,213		20,559		23,605		27,940		Time deposits	14,751		14,133		15,646		16,292		17,094

Total average deposits	Total average deposits	$	402,728	$	396,255	$	383,185	$	375,266	$	372,211	Total average deposits	$	420,096	$	423,750	$	415,238	$	410,966	$	402,728

56 Truist Financial Corporation

Average deposits for the third quarter of ~~2021~~2022 were ~~$402.7~~$420.1 billion, ~~an increase~~a decrease of ~~$6.5~~$3.7 billion, or ~~1.6%~~0.9%, compared to the prior quarter. The decrease in deposits was primarily driven by the impacts of monetary tightening, as well as higher consumer spending and seasonal patterns. Average noninterest bearing deposits ~~grew 2.8%~~decreased 1.7% compared to the prior quarter and represented ~~35.2%~~34.8% of total deposits for the third quarter of ~~2021, compared to 34.8% for the prior quarter.~~2022. Average ~~interest checking and~~ money market and savings ~~grew 1.6%~~ and ~~1.5%~~interest checking deposits declined 0.7% and 0.6%, respectively, compared to the prior quarter.

Average time deposits ~~decreased 6.1%~~increased 4.4% primarily due to ~~the maturity~~an increase in negotiable certificates of ~~higher-cost personal accounts.~~deposit.

Borrowings

At September 30, ~~2021,~~2022, short-term borrowings totaled ~~$5.2~~$25.7 billion, ~~a decrease~~an increase of ~~$866 million~~$20.4 billion compared to December 31, ~~2020, due~~2021. The increase in short-term borrowings was primarily to ~~a decrease~~fund $22.3 billion of ~~$2.6 billion in short-term FHLB advances, partially offset by an increase of $1.4 billion in securities sold under agreements to repurchase.~~

strong loan growth since year-end. Average short-term borrowings were ~~$5.4~~$11.4 billion, or ~~1.2%~~2.4% of total funding, for the ~~third quarter of 2021,~~nine months ended September 30, 2022, as compared to ~~$6.2~~$6.1 billion, or ~~1.5%~~1.4%, for the prior year. ~~Average short-term borrowings decreased as a percentage of funding sources due to strong deposit growth.~~

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. Long-term debt totaled ~~$37.8~~$31.2 billion at September 30, ~~2021,~~2022, a decrease of ~~$1.8~~$4.7 billion compared to December 31, ~~2020.~~2021. During ~~2021,~~the nine months ended September 30, 2022, the Company had ~~$5.8~~maturities and redemptions of $5.9 billion of senior ~~long term~~and $300 million of subordinated long-term debt ~~maturities~~ and ~~redemptions, partially offset by $2.3~~redeemed $800 million of FHLB advances, which resulted in a gain on early extinguishment of long-term debt of $39 million. The Company issued $2.4 billion fixed-to-floating rate senior notes with an interest rate between 4.12% and 4.26% due July 28, 2026 to June 6, 2028 and $1.0 billion fixed-to-floating rate subordinated notes with an interest rate of ~~issuances~~4.92% due July 28, 2033. The average cost of ~~fixed~~long-term debt was 1.88% for the nine months ended September 30, 2022, up 29 basis points compared to the same period in 2021.

In October 2022, Truist issued $750 million fixed-to-floating rate senior notes with an interest rate of ~~1.27% to 1.89% maturing between 2027 to 2029~~5.90% due October 28, 2026 and ~~issuances of $2.3 billion in variable~~$750 million fixed-to-floating rate senior notes ~~maturing between 2024 and 2025. FHLB advances represented 2.3%~~with an interest rate of total outstanding long-term debt at September 30, 2021, compared to 2.2% at December 31, 2020. The average cost of long-term debt was 1.59% for the nine months ended September 30, 2021, down 19 basis points compared to the same period in 2020.6.123% due October 28, 2033.

Shareholders’ Equity

Total shareholders’ equity was ~~$68.9~~$60.8 billion at September 30, ~~2021,~~2022, a decrease of ~~$2.0~~$8.5 billion from December 31, ~~2020.~~2021. This ~~decrease~~decline includes a decrease of ~~$2.3~~$10.7 billion in AOCI ~~redemptions of $1.4 billion in preferred stock for Series F, G,~~ and ~~H, $2.1~~$2.2 billion in dividends, ~~and $1.1 billion in repurchases of common stock,~~ partially offset by ~~$4.8~~$4.6 billion in net income. Truist’s book value per common share at September 30, ~~2021~~2022 was ~~$46.62,~~$40.79, compared to ~~$46.52~~$47.14 at December 31, ~~2020.~~

~~Refer to “Note 10. Shareholders’ Equity” for additional disclosures related to preferred stock redemptions.~~2021.

Risk Management

Truist maintains a comprehensive risk management framework supported by people, processes, and systems to identify, measure, monitor, manage, and report significant risks arising from its exposures and business activities. Effective risk management involves optimizing risk and return while operating in a safe and sound manner, and promoting compliance with applicable laws and regulations. The Company’s risk management framework promotes the execution of business strategies and objectives in alignment with its risk appetite.

Truist has developed and employs a risk taxonomy that further guides business functions in identifying, measuring, responding to, monitoring, and reporting on possible exposures to the organization. The risk taxonomy drives internal risk conversations and enables Truist to clearly and transparently communicate to stakeholders the level of potential risk the Company faces, both presently and in the future, and the Company’s position on managing risk to acceptable levels.

~~Truist Financial Corporation 59~~

Truist is committed to fostering a culture that supports identification and escalation of risks across the organization. All teammates are responsible for upholding the Company’s purpose, mission, and values, and are encouraged to speak up if there is any activity or behavior that is inconsistent with the Company’s culture. The Truist code of ethics guides the Company’s decision making and informs teammates on how to act in the absence of specific guidance.

Truist seeks an appropriate return for the risk taken in its business operations. Risk-taking activities are evaluated and prioritized to identify those that present attractive risk-adjusted returns, while preserving asset value and capital.

Compensation decisions take into account a teammate’s adherence to and successful implementation of Truist’s risk values and associated policies and procedures. The Company’s compensation structure supports its core values and sound risk management practices in an effort to promote judicious risk-taking behavior.

Truist Financial Corporation 57

Truist employs a comprehensive change management program to manage the residual risks associated with integrating heritage BB&T and heritage SunTrust. ~~The~~While integration activities are largely complete, the Board and Executive Leadership oversee the change management program, which is designed to ensure ~~key decisions are reviewed and that there is~~ appropriate oversight of application and data center decommissioning and residual integration ~~activities.~~activities, achieved through Truist’s risk management process.

Refer to Truist’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 for additional disclosures under the section titled “Risk Management.”

Market Risk

Market risk is the risk to current or anticipated earnings, capital, or economic value arising from changes in the market value of portfolios, securities, or other financial instruments. 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. 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. 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).

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.

Interest Rate Market Risk

As a financial institution, Truist is exposed to interest rate risk ~~both on its~~from assets, liabilities, and ~~on its liabilities.~~off-balance sheet positions. To keep net interest margin as stable as possible, Truist actively manages its interest rate risk exposure through the strategic repricing of its assets and liabilities, taking into account the volumes, maturities, and ~~mix, with the goal of keeping net interest margin as stable as possible.~~mix. Truist primarily uses three methods to measure and monitor its interest rate risk: (i) simulations of possible changes to net interest income over the next two years based on gradual changes in interest rates; (ii) analysis of interest rate shock scenarios; and (iii) analysis of economic value of equity based on changes in interest rates.

The Company’s simulation model takes into account assumptions related to prepayment trends, using a combination of market data and internal historical experiences for deposits and loans, as well as scheduled maturities and payments, and the expected outlook for the economy and interest rates. These assumptions are reviewed and adjusted monthly to reflect changes in current interest rates compared to the rates applicable to Truist’s assets and liabilities. The model also considers Truist’s current and prospective liquidity position, current balance sheet volumes, ~~and~~ projected growth and/or contractions, accessibility of funds for short-term needs and capital maintenance.

Deposit betas (the sensitivity of deposit rate changes relative to market rate changes) are an important assumption in the interest rate risk modeling process. Truist applies ~~an average~~ deposit beta ~~(the sensitivity of deposit rate changes relative~~assumptions to ~~market rate changes) of approximately 50% to its~~ non-maturity interest-bearing deposit accounts when determining its interest rate sensitivity. Non-maturity, interest-bearing deposit accounts include interest checking accounts, savings accounts, and money market accounts that do not have a contractual maturity. Truist utilizes a tiered deposit beta assumption framework that accounts for historically observed behaviors of clients and the Company. As interest rates rise, the deposit beta assumptions also rise to reflect increasing competition among banks as well as increased client demand for interest-bearing deposits. Based on the Federal funds target range at September 30, 2022 of 3.00% to 3.25%, Truist applies an average deposit beta of approximately 50% for any additional increases in the Federal funds rate. Truist also regularly conducts sensitivity analyses on other key variables, including noninterest-bearing deposits, to determine the impact these variables could have on the Company’s interest rate risk position. The predictive value of the simulation model depends upon the accuracy of the assumptions, but management believes that it provides helpful information for the management of interest rate risk.

6058 Truist Financial Corporation

The following table shows the effect that the indicated changes in interest rates would have on net interest income as projected for the next 12 months assuming a gradual change in interest rates as described below.


Table 19: Interest Sensitivity Simulation Analysis
Table 17: Interest Sensitivity Simulation Analysis										Table 17: Interest Sensitivity Simulation Analysis
Interest Rate Scenario	Interest Rate Scenario					Annualized Hypothetical Percentage Change in Net Interest Income				Interest Rate Scenario					Annualized Hypothetical Percentage Change in Net Interest Income
Gradual Change in Prime Rate (bps)	Gradual Change in Prime Rate (bps)	Prime Rate								Gradual Change in Prime Rate (bps)	Prime Rate
		Sep 30, 2021		Sep 30, 2020		Sep 30, 2021		Sep 30, 2020			Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021
Up 100	Up 100	4.25	%	4.25	%	4.08	%	3.43	%	Up 100	7.25	%	4.25	%	0.37	%	4.08	%
Up 50	Up 50	3.75		3.75		3.15		2.68		Up 50	6.75		3.75		0.39		3.15
No Change	No Change	3.25		3.25		—		—		No Change	6.25		3.25		—		—
Down 25 (1)		3.00		3.00		(1.22)		(1.62)
Down 50 (1)	Down 50 (1)	2.75		2.75		(1.71)		(1.94)		Down 50 (1)	5.75		2.75		(1.77)		(1.71)
Down 100 (1)										Down 100 (1)	5.25		2.25		(2.43)		(1.94)

(1)The Down 2550 and ~~50 rates are floored at~~100 rate scenarios incorporate a floor of one basis ~~point and may not reflect Down 25 and 50 basis points for all rate indices.~~point.

Rate sensitivity ~~increased~~decreased compared to prior periods, primarily driven by ~~excess liquidity~~higher starting rates, higher deposit betas as rates increase and ~~hedging changes partially offset by an increase in~~move into the ~~investment securities portfolio.~~highest beta tiers, and the addition of forward starting swaps.

Management considers how the interest rate risk position could be impacted by changes in balance sheet mix. Liquidity in the banking industry has been very strong during the current economic cycle. Much of this liquidity increase has resulted in growth in noninterest-bearing demand deposits. Consistent with the industry, Truist has seen a significant increase in this funding source. The behavior of these deposits is one of the most important assumptions used in determining the interest rate risk position of Truist. A decrease in the amount of these deposits in the future would reduce the asset sensitivity of Truist’s balance sheet because the Company ~~would~~may increase interest-bearing funds to offset the loss of this advantageous funding source. Alternatively, the Company may reduce the size of its investment portfolio to offset the loss of noninterest-bearing demand deposits to limit the impact on the balance sheet’s asset sensitivity.

The following table shows the results of Truist’s interest-rate sensitivity position assuming the loss of additional demand deposits and an associated increase in managed rate deposits versus current projections under various interest rate scenarios. For purposes of this analysis, Truist modeled the incremental beta of managed rate deposits for the replacement of the demand deposits at 100%.


Table 20: Deposit Mix Sensitivity Analysis
Table 18: Deposit Mix Sensitivity Analysis									Table 18: Deposit Mix Sensitivity Analysis
Gradual Change in Rates (bps)	Gradual Change in Rates (bps)	Base Scenario at September 30, 2021 (1)			Results Assuming a Decrease in Noninterest-Bearing Demand Deposits				Gradual Change in Rates (bps)				Base Scenario at September 30, 2022 (1)		Results Assuming a Decrease in Noninterest-Bearing Demand Deposits
			td0 Billion			$40 Billion					td0 Billion				$40 Billion
Up 100	Up 100		4.08	%		3.22	%			2.37		%		Up 100	0.37	%	(0.29)	%	(0.96)	%
Up 50	Up 50	3.15			2.52			1.90	Up 50				0.39		(0.10)		(0.58)

(1)The base scenario is equal to the annualized hypothetical percentage change in net interest income at September 30, ~~2021~~2022 as presented in the preceding table.

Truist also uses an EVE analysis to focus on longer-term projected changes in asset and liability values given potential changes in interest rates. This measure allows Truist to analyze interest rate risk that falls outside the net interest income simulation period. The EVE model is a discounted cash flow of the portfolio of assets, liabilities, and derivative instruments. The difference in the present value of assets minus the present value of liabilities is defined as EVE.

~~The following table shows the effect that the indicated changes in interest rates would have on EVE:~~
Table 21: EVE Simulation Analysis
Change in Interest Rates (bps) Hypothetical Percentage Change in EVE
Sep 30, 2021 Sep 30, 2020
Up 100 (5.1) % 7.4 %
No Change — —
Down 100 (3.5) (6.8)

Truist uses financial instruments including derivatives to manage interest rate risk related to securities, commercial loans, MSRs, and mortgage banking operations, long-term debt, and other funding sources. Truist hedges a portion of its AFS securities to reduce mark-to-market volatility within AOCI and also to increase its overall asset sensitivity position. As of September 30, 2021, the Company had $24.0 billion of pay-fixed swaps associated with this hedging program that are accounted for as fair value hedges. In the third quarter of 2021, this hedging program reduced net interest income by $17 million. Truist also useshas utilized derivatives to facilitate transactions on behalf of its clients and as part of associated hedging activities. As of September 30, ~~2021,~~2022, Truist had derivative financial instruments outstanding with notional amounts totaling ~~$329.9~~$336.1 billion, with an associated net negative fair value of ~~$2.4~~$2.3 billion. See “Note 16. Derivative Financial Instruments” for additional disclosures.

~~Truist Financial Corporation 61~~LIBOR Transition

~~LIBOR in its current form will no longer be available after 2021.~~ For most tenors of U.S. dollar LIBOR, the administrator of LIBOR extended publication until June 30, 2023. Tenors used infrequently by Truist, including one week and two month U.S. dollar LIBOR and all non-U.S. dollar LIBOR, ~~will cease~~ceased publication at December 31, 2021, based on ~~this guidance. Truist has U.S. dollar LIBOR-based contracts that extend beyond June 30, 2023. In accordance with regulatory guidance, production of new U.S. dollar~~the October 20, 2021 interagency Joint Statement on Managing the LIBOR ~~contracts will cease before the end of 2021.~~transition. To prepare for the transition to an alternative reference rate, management formed a cross-functional project team to address the LIBOR transition. The project team performed an assessment to identify the potential risks related to the transition from LIBOR to a new ~~index. The project team~~index or multiple indices and provides updates to Executive Leadership and the Board. As of September 30, 2022, Truist had outstanding LIBOR-based instruments that mature after June 30, 2023, including loan and lease exposures totaling approximately $148 billion, notional derivative exposure totaling approximately $135 billion, long-term debt of $1.1 billion, and preferred stock of $1.5 billion. These amounts are inclusive of remediated contracts, which contain adequate fallback language for the transition.

Contract fallback language for existing loans and leases ~~is under review~~has largely been reviewed and certain contracts will ~~need updated provisions for~~require amendments to support the ~~transition. The Company has plans for impacted~~transition away from LIBOR. Impacted lines of business ~~to remediate~~have started remediating these contracts ~~train impacted teammates, and provide timely notice~~ to ~~impacted clients.~~include standardized fallback language, or amending contracts to new reference rates at maturities or based on client request. Current fallback language used ~~for new, renewed, and modified~~to remediate contracts that mature after June 30, 2023 is generally consistent with ARRC recommendations and includes use of “hardwired fallback” language, which will transition loans to a SOFR based rate after June 30, 2023.

Truist Financial Corporation 59

The progress and approach to remediation will vary based on the type of contract and existing language used in the agreement. For commercial lending and general consumer lending, a significant number of remaining LIBOR contracts will require client outreach and remediation. Through mid-2022, the Company’s primary focus was contract remediation for maturities earlier than June 30, 2023 and expanding usage of alternative reference rates. Efforts have shifted to amend and remediate contracts, excluding mortgage and student loans, that mature post June 30, 2023 ($139 billion), which will continue to be the focus during the remainder of 2022. Truist has determined that adjustable rate mortgage products ($3.6 billion) have consistent and adequate fallback language to transition away from LIBOR in line with industry expectations; therefore, these contracts will not require remediation. Remediation of student loans ($5.2 billion) will follow pending guidance from the Department of Education on the replacement rate for payment allowances on certain student loans and recent guidance from the CFPB to allow transition to “comparable rates,” in the private student loan portfolio, where ~~appropriate.~~LIBOR is used directly. Certain derivatives without a clearly defined or practicable replacement benchmark rate will use the recent Federal legislation to replace LIBOR with a SOFR-based rate that will be established by FRB rulemaking and following the ISDA Protocol for transition. This legislation will also provide additional administrative benefit for a small portion of the commercial and consumer lending portfolios where contracts do not contain fallback language and have not yet been remediated, providing a remediation path to a SOFR based rate.

Training has been provided for impacted teammates and will continue during 2022. Truist will continue to provide timely notices and information to impacted clients about the transition during 2022 and the first half of 2023. Truist continues to manage the impact of these contracts and other financial instruments, systems implications, hedging strategies, and related operational and market risks on established project plans for business and operational readiness ~~for~~to support the transition. ~~Market risks associated~~

As of December 31, 2021, Truist ceased entering into new contracts with ~~this change are dependent~~a LIBOR reference rate for all product offerings, except on the alternative reference rates available and market conditions at transition. In 2020, Truist began offering SOFR-based lending solutions to wholesale and consumer clients and entered into SOFR-based derivative contracts.a limited basis, as permissible. The Company ~~has~~is actively ~~been~~ using SOFR as a reference rate ~~in various loan contracts~~ and has originated approximately $3$80 billion of loans, issued $8.4 billion of long-term debt, and has $91 billion in notional derivative exposure using this alternative reference rate as of September 30, ~~2021 using this alternative reference rate.~~2022. Alternatives, such as SOFR, may react differently from LIBOR in times of economic stress. Truist expects SOFR to ~~become a more commonly-used~~be the primary pricing benchmark used across the industry and will continue to offer additional SOFR based ~~products~~products. Market risks associated with the transition to alternative reference rates are dependent on market conditions as loans are transitioned to alternative reference rates during ~~2021. Other~~2022 and early 2023. Additional alternative reference rates, such as Bloomberg Short Term Bank Yield will be supported based on market demand. Other emerging credit sensitive rates will be evaluated as additional alternatives for ~~LIBOR.~~LIBOR based on market developments. For a further discussion of the various risks associated with the potential cessation of LIBOR and the transition to alternative reference rates, refer to the section titled “Item1A. Risk Factors” in the Form 10-K for the year ended December 31, ~~2020.~~2021.

Market risk from trading activities

As a financial intermediary, Truist provides its clients access to derivatives, foreign exchange and securities markets, which generate market risks. Trading market risk is managed using a comprehensive risk management approach, which includes measuring risk using VaR, stress testing, and sensitivity analysis. Risk metrics are monitored against a suite of limits on a daily basis at both the trading desk level and at the aggregate portfolio level, which is intended to ensure that exposures are in line with Truist’s risk appetite.

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. Truist’s trading portfolio of covered positions results primarily from market making and underwriting services for the Company’s clients, as well as associated risk mitigating hedging activity. The trading portfolio, measured in terms of VaR, consists primarily of four sub-portfolios of covered positions: (i) credit trading, (ii) fixed income securities, (iii) interest rate derivatives, and (iv) equity derivatives. As a market maker across different asset classes, Truist’s trading portfolio also contains other sub-portfolios, including foreign exchange, loan trading, and commodity derivatives; however, these portfolios do not generate material trading risk exposures.

Valuation policies and methodologies exist for all trading positions. Additionally, these positions are subject to independent price verification. See “Note 16. Derivative Financial Instruments,” “Note 15. Fair Value Disclosures,” and “Critical Accounting Policies” herein for discussion of valuation policies and methodologies.

60 Truist Financial Corporation

Securitizations

As of September 30, ~~2021,~~2022, the aggregate market value of on-balance sheet securitization positions subject to the Market Risk Rule was ~~$38~~$23 million, all of which were non-agency asset backed securities positions. Consistent with the Market Risk Rule requirements, the Company performs pre-purchase due diligence on each securitization position to identify the characteristics including, but not limited to, deal structure and the asset quality of the underlying assets, that materially affect valuation and performance. Securitization positions are subject to Truist’s comprehensive risk management framework, which includes daily monitoring against a suite of limits. There were no off-balance sheet securitization positions during the reporting period.

Correlation Trading Positions

The trading portfolio of covered positions did not contain any correlation trading positions as of September 30, ~~2021.~~2022.

~~62 Truist Financial Corporation~~

VaR-Based Measures

VaR measures the potential loss of a given position or portfolio of positions at a specified confidence level and time horizon. Truist utilizes a historical VaR methodology to measure and aggregate risks across its covered trading positions. For risk management purposes, the VaR calculation is based on a historical simulation approach and measures the potential trading losses using a one-day holding period at a one-tail, 99% confidence level. For Market Risk Rule purposes, the Company calculates VaR using a 10-day holding period and a 99% confidence level. Due to inherent limitations of the VaR methodology, such as the assumption that past market behavior is indicative of future market performance, VaR is only one of several tools used to measure and manage market risk. Other tools used to actively manage market risk include stress testing, scenario analysis, and stop loss limits.

The trading portfolio’s VaR profile is influenced by a variety of factors, including the size and composition of the portfolio, market volatility, and the correlation between different positions. A portfolio of trading positions is typically less risky than the sum of the risk from each of the individual sub-portfolios, because, under normal market conditions, risk within each category partially offsets the exposure to other risk categories. The following table summarizes certain VaR-based measures for the three months and nine months ended September 30, ~~2021~~2022 and ~~2020. In the third quarter of 2021,~~2021. Average one and ~~ten day~~ten-day VaR measures ~~declined~~for the three months ended September 30, 2022 increased from the same period of last year, primarily driven by higher market volatility in 2022. Maximum one and ten-day VaR measures for the nine months ended September 30, 2022 were lower than last year as heightened market volatility experienced during March 2020 ~~aged out of the 12-month~~was used for measuring VaR ~~look-back window.~~
Table 22: VaR-based Measures
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(Dollars in millions) 10-Day Holding Period 1-Day Holding Period 10-Day Holding Period 1-Day Holding Period 10-Day Holding Period 1-Day Holding Period 10-Day Holding Period 1-Day Holding Period
VaR-based Measures:
Maximum $ 6 $ 3 $ 65 $ 11 $ 68 $ 16 $ 65 $ 11
Average 5 2 31 6 16 5 23 5
Minimum 3 2 13 3 3 1 3 1
Period-end 6 3 46 8 6 3 46 8
VaR by Risk Class:
Interest Rate Risk 2 1 2 1
Credit Spread Risk 4 10 4 10
Equity Price Risk 2 2 2 2
Foreign Exchange Risk — — — —
Portfolio Diversification (5) (6) (5) (6)
Period-end 3 8 3 8
until March 2021.


Table 19: VaR-based Measures
	Three Months Ended September 30,								Nine Months Ended September 30,
	2022				2021				2022				2021
(Dollars in millions)	10-Day Holding Period		1-Day Holding Period		10-Day Holding Period		1-Day Holding Period		10-Day Holding Period		1-Day Holding Period		10-Day Holding Period		1-Day Holding Period
VaR-based Measures:
Maximum	$	27	$	7	$	6	$	3	$	38	$	14	$	68	$	16
Average	18		5		5		2		17		5		16		5
Minimum	13		4		3		2		6		3		3		1
Period-end	20		6		6		3		20		6		6		3
VaR by Risk Class:
Interest Rate Risk			8				2				8				2
Credit Spread Risk			7				4				7				4
Equity Price Risk			2				2				2				2
Foreign Exchange Risk			—				—				—				—
Portfolio Diversification			(11)				(5)				(11)				(5)
Period-end			6				3				6				3

Truist Financial Corporation 61

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. Stressed VaR is calculated over a ten-day holding period at a one-tail, 99% confidence level and employs a historical simulation approach based on a continuous twelve-month historical window selected to reflect a period of significant financial stress for the Company’s trading portfolio. The following table summarizes Stressed VaR-based measures:


Table 23: Stressed VaR-based Measures - 10 Day Holding Period
		Three Months Ended September 30,				Nine Months Ended September 30,
Table 20: Stressed VaR-based Measures - 10 Day Holding Period										Table 20: Stressed VaR-based Measures - 10 Day Holding Period
											Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020		(Dollars in millions)	2022		2021		2022		2021
Maximum	Maximum	$	82	$	65	$	91	$	65	Maximum	$	91	$	82	$	109	$	91
Average	Average	52		31		55		31		Average	65		52		69		55
Minimum	Minimum	31		14		26		13		Minimum	48		31		40		26
Period-end	Period-end	57		46		57		46		Period-end	65		57		65		57

Compared to the prior year, ~~periods,~~ stressed VaR measures increased ~~in the third quarter of 2021~~ primarily due to ~~the normalization of~~higher market making inventory levels ~~this year compared to the same periods of 2020 when inventory levels were lower due to the market volatility.~~in 2022.

~~Truist Financial Corporation 63~~

Specific Risk Measures

Specific risk is a measure of idiosyncratic risk that could result from risk factors other than broad market movements (e.g. default or event risks). The Market Risk Rule provides fixed risk weights under a standardized measurement method while also allowing a model-based approach, subject to regulatory approval. Truist utilizes the standardized measurement method to calculate the specific risk component of market risk regulatory capital. As such, incremental risk capital requirements do not apply.

VaR Model Backtesting

In accordance with the Market Risk Rule, the Company evaluates the accuracy of its VaR model through daily backtesting by comparing aggregate daily trading gains and losses (excluding fees, commissions, reserves, net interest income, and intraday trading) from covered positions with the corresponding daily VaR-based measures generated by the model. As illustrated in the following graph, ~~there~~VaR measures briefly increased in the first quarter of 2022 due to the increase in market volatility that normalized towards the end of the quarter. There were no Company-wide VaR backtesting exceptions during the twelve months ended September 30, ~~2021.~~2022. 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. 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.

62 Truist Financial Corporation

Model Risk Management

MRM is responsible for the independent model validation of all decision tools and models including trading market risk models. The validation activities are conducted in accordance with MRM policy, which incorporates regulatory guidance related to the evaluation of model conceptual soundness, ongoing monitoring, and outcomes analysis. 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 to identify potential model enhancement.

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 tests include simulations for historical repeats and hypothetical risk factor shocks. 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. Management reviews stress testing scenarios on an ongoing basis and makes updates, as necessary, which is intended to ensure that both current and emerging risks are captured appropriately. Management also utilizes stress analyses to support the Company’s capital adequacy assessment standards. See the “Capital” section of MD&A for additional discussion of capital adequacy.

~~64 Truist Financial Corporation~~

Liquidity

Liquidity represents the continuing ability to meet funding needs, including deposit withdrawals, repayment of borrowings and other liabilities, and funding of loan commitments. 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.

Truist monitors the ability to meet client demand for funds under both normal and stressed market conditions. In considering its liquidity position, management evaluates Truist’s funding mix based on client core funding, client rate-sensitive funding, and national markets funding. In addition, management evaluates exposure to rate-sensitive funding sources that mature in one year or less. Management also measures liquidity needs against 30 days of stressed cash outflows for Truist and Truist Bank. To ensure a strong liquidity position and compliance with regulatory requirements, management maintains a liquid asset buffer of cash on hand and highly liquid unencumbered securities. As

Internal Liquidity Stress Testing

Liquidity stress testing is designed to ensure that Truist and Truist Bank have sufficient liquidity for a variety of ~~September 30, 2021~~institution-specific and ~~December 31, 2020,~~market-wide adverse scenarios. Each liquidity stress test scenario applies defined assumptions to execute sources and uses of liquidity over varying planning horizons. The types of expected liquidity uses during a stressed event may include deposit attrition, contractual maturities, reductions in unsecured and secured funding, and increased draws on unfunded commitments. 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. The liquidity buffer consists of unencumbered highly liquid assets and Truist’s ~~liquid asset~~liquidity buffer is substantially the same in composition to what qualifies as HQLA under the LCR Rule.

Contingency Funding Plan

Truist has a ~~percent~~contingency funding plan designed to ensure that liquidity sources are sufficient to meet ongoing obligations and commitments, particularly in the event of ~~total assets, was 24.5%~~a liquidity contraction. This plan is designed to examine and ~~20.2%, respectively.~~quantify the organization’s liquidity under the various internal liquidity stress scenarios and is periodically tested to assess the plan’s reliability. Additionally, the plan provides a framework for management and other teammates to follow in the event of a liquidity contraction or in anticipation of such an event. The plan addresses authority for activation and decision making, liquidity options, and the responsibilities of key departments in the event of a liquidity contraction.

LCR and HQLA

The LCR rule ~~directs large U.S. banking organizations to hold unencumbered high-quality liquid assets~~requires that Truist and Truist Bank maintain an amount of eligible HQLA that is sufficient to ~~withstand projected 30-day~~meet its estimated total net cash outflows ~~as defined under~~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. ~~As of January 1, 2020,~~ Truist isand Truist Bank are subject to the Category III reduced LCR requirements. Truist held average weighted eligible HQLA of $88.6 billion and Truist’s average LCR was ~~114%~~111% for the three months ended September 30, ~~2021, well above the regulatory minimum of 100%.~~2022.

Truist Financial Corporation 63

Effective July 2021, Truist became subject to final rules implementing the NSFR, which are designed to ensure that banking organizations maintain a stable, long-term funding profile in relation to their asset composition and off-balance sheet activities. At September 30, ~~2021,~~2022, the Company was compliant with this requirement.

~~The ability to raise funding at competitive prices is affected by the rating agencies’ views~~Sources of the Parent Company’s and Truist Bank’s credit quality, liquidity, capital, and earnings. Management meets with the rating agencies on a regular basis to discuss current outlooks. During the nine months ended September 30, 2021, Fitch Ratings, S&P Global Ratings, DBRS Morningstar, and Moody’s Investors Service all affirmed their ratings and provided updates to their rating outlooks for the Company and the Bank as further detailed below.Funds

~~On May 7, 2021, Fitch Ratings affirmed~~Management believes current sources of liquidity are sufficient to meet Truist’s on- and off-balance sheet obligations. Truist funds its balance sheet through diverse sources of funding including client deposits, secured and unsecured capital markets funding, and shareholders’ equity. Truist Bank’s primary source of funding is client deposits. Continued access to client deposits is highly dependent on public confidence in the ~~ratings~~stability of ~~the Parent Company and~~ Truist Bank and ~~revised the rating outlook~~its ability to ~~“stable” from “negative.” The revision~~return funds to the rating outlook reflects the rating agency’s view that the Company’s diverse business model and strategy execution will drive stable earnings performance that supports its credit ratings. The revised rating outlook also reflects increased confidence in a U.S. economic recovery, which reduces the likelihood of the downside scenario that was contemplatedclients when ~~Fitch Ratings revised the ratings outlook to “negative” in April 2020.~~requested.

~~On May 24, 2021, S&P Global Ratings affirmed the ratings of the Parent Company and~~ Truist Bank maintains a number of diverse funding sources to meet its liquidity requirements. These sources include unsecured borrowings from the capital markets through the issuance of senior or subordinated bank notes, institutional CDs, overnight and ~~revised the rating outlook~~term Federal funds markets, and retail brokered CDs. Truist Bank also maintains access to ~~“positive” from “stable”, citing the stabilization in U.S. economic trends~~secured borrowing sources including FHLB advances, repurchase agreements, and the ~~easing industry risk in~~FRB discount window. Available investment securities could be pledged to create additional secured borrowing capacity. The following table presents a summary of Truist Bank’s available secured borrowing capacity and eligible cash at the U.S. banking system. The rating agency also noted that the positive outlook reflects the view that, as a merged entity, Truist’s better geographic diversity, increased market position, improved earnings power, and higher technology spending provide a sustainable competitive advantage, and that the financial and credit positives of the merged entity could outweigh the operational risks of integrating two large regional banks.FRB:


Table 21: Selected Liquidity Sources
(Dollars in millions)	Sep 30, 2022		Dec 31, 2021
Unused borrowing capacity:
FRB	$	49,525	$	52,170
FHLB	28,548		49,244
Available investment securities (after haircuts)	96,894		116,600
Available secured borrowing capacity	174,967		218,014
Eligible cash at the FRB	16,699		14,714
Total	$	191,666	$	232,728

~~On June 10,~~At September 30, 2022, Truist Bank’s available secured borrowing capacity represented approximately 3.7 times the amount of wholesale funding maturities in one-year or less. FHLB unused borrowing capacity was $28.5 billion at September 30, 2022, down from $49.2 billion at December 31, 2021 ~~DBRS Morningstar confirmed the ratings of the Parent Company and Truist Bank and revised the trend for all ratings~~primarily due to “positive” from “stable,” citing substantial progress to date with the Merger integration and the rating agency’s view that the impact of the economic fallout from the coronavirus pandemic on Truist’s asset quality and capital will continue to be manageable.increases in short-term borrowings.

On July 12, 2021, Moody’s Investors Service upgraded Truist Bank’s long-term subordinated debt rating to A2 from A3, and downgraded Truist Bank’s long-term bank deposit rating to Aa3 from Aa2. The rating actions were driven by revisions to the rating agency’s advanced loss given failure analysis within its updated methodology published on July 9, 2021.

See the “Liquidity” section of MD&A in Truist’s Annual Report on Form 10-K for the year ended December 31, 2020 for additional information regarding credit ratings.

Parent Company

The Parent Company serves as the primary source of capital for the operating subsidiaries. The Parent Company’s assets consist primarily of cash on deposit with Truist Bank, equity investments in subsidiaries, advances to subsidiaries, and notes receivable from subsidiaries. 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 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 long-term debt.

~~Truist Financial Corporation 65~~

See “Note 22. Parent Company Financial Information” in Truist’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 for additional information regarding dividends from subsidiaries and debt transactions.

Access to funding at the Parent Company is more sensitive to market disruptions. Therefore, Truist prudently manages cash levels at the Parent Company to cover a minimum of one year of projected cash outflows which includes unfunded external commitments, debt service, common and preferred dividends and scheduled debt maturities, without the benefit of any new cash inflows. Truist maintains a significant buffer above the projected one year of cash outflows. 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 September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Parent Company had 3632 months and 4335 months, respectively, of cash on hand to satisfy projected cash outflows, and 2022 months and 2219 months, respectively, when including the payment of common stock dividends.

~~Truist Bank~~Credit Ratings

~~Truist carefully manages liquidity risk at Truist Bank. Truist Bank’s primary source~~Credit ratings are forward-looking opinions of ~~funding is client deposits. Continued access~~rating agencies as to ~~client deposits is highly dependent on public confidence in~~ the ~~stability of Truist Bank and its~~Company’s ability ~~to return funds to clients when requested.~~

~~Truist Bank maintains a number of diverse funding sources~~ to meet its ~~liquidity requirements. These sources include unsecured borrowings from~~financial commitments and repay its securities and obligations in accordance with their terms of issuance. Credit ratings influence both borrowing costs and access to the capital ~~markets through~~markets. The Company’s credit ratings are continuously monitored by the ~~issuance of senior or subordinated bank notes, institutional CDs, overnight~~rating agencies and ~~term Federal funds markets,~~are subject to change at any time. As Truist seeks to maintain high-quality credit ratings, management meets with the major rating agencies on a regular basis to provide financial and ~~retail brokered CDs. Truist Bank also maintains access~~business updates and to ~~secured borrowing sources including FHLB advances, repurchase agreements,~~discuss current outlooks and ~~the FRB discount window. The following table presents a summary of Truist Bank’s available secured borrowing capacity and eligible cash at the FRB:~~

Table 24: Liquidity Sources
(Dollars in millions) Sep 30, 2021 Dec 31, 2020
Unused borrowing capacity:
FRB $ 51,457 $ 52,831
FHLB 52,459 52,274
AFS securities 120,462 93,623
Available secured borrowing capacity 224,378 198,728
Eligible cash at the FRB 14,674 13,437
Total $ 239,052 $ 212,165

~~At September 30, 2021, Truist Bank’s available secured borrowing capacity represented approximately 10.8 times the amount of wholesale funding maturities in one-year or less.~~trends.

6664 Truist Financial Corporation

~~Contractual Obligations, Commitments, Contingent Liabilities,~~Recent changes in the Company’s credit ratings and ~~Off-Balance Sheet Arrangements~~outlooks include:

On August 15, 2022, DBRS Morningstar upgraded the ratings of Truist, including the Long-Term Issuer Rating to “AA (low)” from “A (high).” DBRS Morningstar also upgraded the ratings of Truist Bank, including the Long-Term Issuer Rating to “AA” from “AA (low).” The trend for all ratings was revised to “Stable” from “Positive.” The rating actions reflected the scale, quality, and diversity of Truist’s franchise; the completion of the Merger integration; Truist’s diversified products and geography; and the Company’s sound balance sheet fundamentals and conservative risk profile.

~~Refer to~~

After the end of the third quarter, on October 21, 2022, Fitch Ratings affirmed the ratings of Truist and Truist Bank, including the long-term and short-term issuer default ratings at “A+” and “F1,” respectively, for both entities. Fitch Ratings also maintained a “stable” ratings outlook for all ratings. In affirming the ratings, Fitch cited Truist’s diverse business model, conservative credit culture, and the completion of the Merger integration.

See Item 1A, “Risk Factors” in Truist’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 for ~~discussion with respect to Truist’s quantitative~~additional information regarding factors that influence credit ratings and ~~qualitative disclosures about its fixed and determinable contractual obligations. Truist’s commitments include investments~~potential risks that could materialize in affordable housing projects throughout its market area, renewable energy credits, private equity funds, derivative contracts to manage various financial risks, as well as other commitments. Refer to “Note 14. Commitments and Contingencies,” “Note 15. Fair Value Disclosures,” and “Note 16. Derivative Financial Instruments”the event of downgrade in ~~this Form 10-Q, and “Note 16. Commitments and Contingencies” of~~ the ~~Annual Report on Form 10-K for further discussion of these commitments.~~Company’s credit ratings.

Capital

The maintenance of appropriate levels of capital is a management priority and is monitored on a regular basis. 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. Risk-based capital ratios, which include CET1 capital, Tier 1 capital, and Total capital are calculated based on regulatory guidance related to the measurement of capital and risk-weighted assets.

Truist regularly performs stress testing on its capital levels and is required to periodically submit the Company’s capital plans and stress testing results to the banking regulators. Management regularly monitors the capital position of Truist on both a consolidated and bank-level basis. In this regard, management’s ~~overriding policy~~objective is to maintain capital at levels that are in excess of internal capital targets, which are above the regulatory “well capitalized” minimums. Management ~~evaluates~~has implemented stress capital ratio minimum targets to evaluate whether capital ratios calculated after the effect of alternative capital actions are likely to remain above minimums specified by the FRB for the annual CCAR process. Breaches of stressed minimum targets prompt a review of the planned capital actions included in Truist’s capital plan.


Table 25: Capital Requirements
Table 22: Capital Requirements														Table 22: Capital Requirements
		Minimum Capital		Well Capitalized				Minimum Capital Plus Stress Capital Buffer (1)			Minimum Capital					Well Capitalized					Minimum Capital Plus Stress Capital Buffer (1)
				Truist		Truist Bank				Minimum Capital			Truist				Truist Bank			Minimum Capital Plus Stress Capital Buffer (1)
CET1	CET1	4.5	%	NA		6.5	%	7.2	%			CET1	4.5		%		NA	6.5	%			7.0	%
Tier 1 capital	Tier 1 capital	6.0		6.0	%	8.0		8.7						Tier 1 capital		6.0		6.0	%		8.0			8.5
Total capital	Total capital	8.0		10.0		10.0		10.7						Total capital		8.0		10.0			10.0			10.5
Leverage ratio	Leverage ratio	4.0		NA		5.0		NA						Leverage ratio		4.0		NA			5.0			NA
Supplementary leverage ratio	Supplementary leverage ratio	3.0		NA		NA		NA						Supplementary leverage ratio		3.0		NA			NA			NA

(1)Reflects a SCB of ~~2.7%~~2.5% applicable to Truist ~~through~~as of September 30, ~~2021.~~

~~Truist completed~~2022. Truist’s SCB, received in the 2021 CCAR process, ~~and received a SCB of 2.5% for the period~~is effective from October 1, 2021 to September 30, 2022. Under the 2022 CCAR process, Truist increased the common dividend 7% during the third quarter of 2021 to $0.48 per share. Truist continues to target a CET1 ratio of approximately 9.75% over the near-term. As previously communicated, the Company expects to be able to, with appropriate approvalswas notified its SCB requirement would remain 2.5% from its Board of Directors, deploy approximately $4 billion to $5 billion of capital (either in the form of share repurchases or acquisitions) between 3Q21 and 3Q22. During the third quarter of 2021, Truist completed the acquisition of Constellation Affiliated Partners and announced the acquisition of Service Finance, LLC, reducing the amount of capital deployment available for acquisitions or share repurchases to approximately $1 billion to $2 billionOctober 1, 2022 through 3Q22. Truist resumed repurchasing shares and expects to consume approximately $500 million of this capacity via share repurchases in the fourth quarter of 2021 reflecting the Company’s strong capital position, and the reduced integration risk with successful migration of heritage BB&T retail and commercial clients to the Truist ecosystem.September 30, 2023.

Truist Financial Corporation 6765

Truist’s capital ratios are presented in the following table:


Table 26: Capital Ratios - Truist Financial Corporation

Table 23: Capital Ratios - Truist Financial Corporation								Table 23: Capital Ratios - Truist Financial Corporation
(Dollars in millions, except per share data, shares in thousands)	(Dollars in millions, except per share data, shares in thousands)	Sep 30, 2021			Dec 31, 2020			(Dollars in millions, except per share data, shares in thousands)	Sep 30, 2022			Dec 31, 2021
Risk-based:	Risk-based:	(preliminary)						Risk-based:	(preliminary)
CET1 capital to risk-weighted assets	CET1 capital to risk-weighted assets	10.1		%	10.0		%	CET1 capital to risk-weighted assets	9.1		%	9.6		%
Tier 1 capital to risk-weighted assets	Tier 1 capital to risk-weighted assets	11.9			12.1			Tier 1 capital to risk-weighted assets	10.7			11.3
Total capital to risk-weighted assets	Total capital to risk-weighted assets	13.9			14.5			Total capital to risk-weighted assets	12.6			13.2
Leverage ratio	Leverage ratio	9.0			9.6			Leverage ratio	8.5			8.7
Supplementary leverage ratio	Supplementary leverage ratio	7.8			8.7			Supplementary leverage ratio	7.3			7.4
Non-GAAP capital measure (1):	Non-GAAP capital measure (1):							Non-GAAP capital measure (1):
Tangible common equity per common share	Tangible common equity per common share	$	26.34		$	26.78		Tangible common equity per common share	$	18.36		$	25.47
Calculation of tangible common equity (1):	Calculation of tangible common equity (1):							Calculation of tangible common equity (1):
Total shareholders’ equity	Total shareholders’ equity	$	68,900		$	70,912		Total shareholders’ equity	$	60,811		$	69,271
Less:	Less:							Less:
Preferred stock	Preferred stock	6,673			8,048			Preferred stock	6,673			6,673
Noncontrolling interests	Noncontrolling interests	—			105			Noncontrolling interests	23			—
Goodwill and intangible assets, net of deferred taxes	Goodwill and intangible assets, net of deferred taxes	27,066			26,629			Goodwill and intangible assets, net of deferred taxes	29,752			28,772
Tangible common equity	Tangible common equity	$	35,161		$	36,130		Tangible common equity	$	24,363		$	33,826
Risk-weighted assets	Risk-weighted assets	$	383,073		$	379,153		Risk-weighted assets	$	421,873		$	390,886
Common shares outstanding at end of period	Common shares outstanding at end of period	1,334,892			1,348,961			Common shares outstanding at end of period	1,326,766			1,327,818

(1)Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Truist’s management uses these measures to assess the quality of capital and returns relative to balance sheet risk. These capital measures are not necessarily comparable to similar capital measures that may be presented by other companies.

Capital ratios remained strong compared to the regulatory requirements for well capitalized banks. ~~For~~Truist declared common dividends of $0.52 per share during the ~~nine months ended~~third quarter of 2022, an increase of 8% compared to the prior quarter. The dividend payout ratio for the third quarter of 2022 was 45%. Truist did not repurchase any shares in the third quarter of 2022.

Truist CET1 ratio was 9.1% as of September 30, ~~2021,Truist paid $1.8 billion in common stock dividends or $1.38 per share,~~2022. The decline compared to the June 30, 2022 CET1 ratio primarily reflects the BenefitMall acquisition and completed $1.1 billion in common share repurchases. The dividend and total payout ratios for the nine months ended September 30, 2021 were 41% and 66%, respectively. Truist also redeemed $1.4 billion of preferred stock to optimize the Company’s capital position.strong loan growth.

Share Repurchase Activity

Table ~~27:~~24: Share Repurchase Activity

(Dollars in millions, except per share data, shares in thousands)

Total Number of Shares ~~Repurchased~~Purchased (1)

Average Price Paid Per Share (2)

Total Number of Shares ~~Repurchased Pursuant to Publicly-Announced Plan~~Purchased as part of Publicly Announced Plans (3)

~~Maximum Remaining~~Approximate Dollar Value of Shares ~~Available for Repurchase Pursuant to Publicly-Announced Plan~~that may yet be Purchased Under the Plans (3)

July ~~2021~~1, 2022 to July 31, 2022

—

~~3,065~~2,315

August ~~2021~~1, 2022 to August 31, 2022

—

~~3,065~~2,315

September ~~2021~~1, 2022 to September 30, 2022

—

~~3,065~~2,315

Total

—

(1)Includes shares exchanged or surrendered in connection with the exercise of equity-based awards under equity-based compensation plans.

(2)Excludes commissions.

(3)Pursuant to the 2020 Repurchase Plan, announced in December 2020 and amended in June 2021, authorizing up to ~~$2.0~~$4.2 billion of share repurchases ~~beginning in~~through September 30, 2022; the ~~first quarter~~unused capacity of ~~2021.~~$2.3 billion expired September 30, 2022. In ~~June 2021,~~July 2022, the Board of Directors ~~increased,~~approved, effective ~~July~~October 1, ~~2021, the previous~~2022, new repurchase authority to effectuate repurchases up to an ~~additional $2.2~~aggregate of $4.1 billion in shares of the Company’s common stock through September 30, ~~2022 (up to $4.2 billion in aggregate amount). With the additional authorization, the Company has $3.1 billion remaining for share repurchases.~~2023.

6866 Truist Financial Corporation

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. Truist’s financial position and results of operations are affected by management’s application of accounting policies, including estimates, assumptions, and judgments made to arrive at the carrying value of assets and liabilities, and amounts reported for revenues and expenses. Different assumptions in the application of these policies could result in material changes in the consolidated financial position and/or consolidated results of operations, and related disclosures. ~~The more critical policies~~Material estimates that are particularly susceptible to significant change include ~~accounting for~~ the ~~ACL, determining~~determination of the ACL; determination of fair value ~~of financial instruments,~~for securities, MSRs, LHFS, trading loans, and derivative assets and liabilities; goodwill and other intangible ~~assets,~~assets; income ~~taxes,~~taxes; and ~~benefit obligations associated with~~ pension and postretirement benefit ~~plans.~~obligations. Understanding Truist’s accounting policies is fundamental to understanding the consolidated financial position and consolidated results of operations. The critical accounting policies are discussed in MD&A in Truist’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. Significant accounting policies and changes in accounting principles and effects of new accounting pronouncements are discussed in “Note 1. Basis of Presentation” in Form 10-K for the year ended December 31, ~~2020.~~2021. Disclosures regarding the effects of new accounting pronouncements are included in ~~the~~ “Note 1. Basis of Presentation” in this report. ~~Except for the item noted below, there~~There have been no ~~other~~ changes to the significant accounting policies during ~~2021.~~2022.

~~Intangible Assets~~

The Company performed a qualitative assessment of current events and circumstances, including macroeconomic and market factors, industry and banking sector events, Truist specific performance indicators, and a comparison of management’s forecast and assumptions to those used in its October 1, 2020 quantitative impairment test, concluding that it was not more-likely-than-not that the fair value of one or more of its reporting units is below its respective carrying amount as of September 30, 2021, and therefore no triggering event occurred that required a quantitative goodwill impairment test. If economic conditions deteriorate, or the COVID-19 pandemic’s effects prolong or worsen, it may be more-likely-than-not that the fair value of one or more of Truist’s reporting units falls below its respective carrying amount, which would require a quantitative goodwill impairment test.

~~Truist Financial Corporation 69~~

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, the management of the Company, under the supervision and with the participation of the Company’s CEO and CFO, carried out an evaluation of the effectiveness of the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were ~~effective.~~effective as of the end of the period covered by the report.

Changes in Internal Control over Financial Reporting

Management of Truist is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) of the Exchange Act. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarter ended September 30, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Refer to the Litigation and Regulatory Matters section in “Note 14. Commitments and Contingencies,” which is incorporated by reference into this item.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors disclosed in Truist’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. Additional risks and uncertainties not currently known to Truist or that management has deemed to be immaterial also may materially adversely affect Truist’s business, financial condition, or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Refer to the Share Repurchase Activity section in the MD&A, which is incorporated by reference into this item.

70 Truist Financial Corporation 67

ITEM 6. EXHIBITS

Exhibit No.

Description

Location

3.1

Amended and Restated Bylaws of Truist Financial ~~Corporation.~~

~~Incorporated herein by reference to Exhibit 3.1 of the Current Report on Form 8-K, filed August 17, 2021.~~

~~3.2~~

~~Amended and Restated Bylaws of Truist Financial Corporation.~~Corporation

Incorporated herein by reference to Exhibit 3.1 of the Current Report on Form 8-K, filed October 26, ~~2021.~~2022.

10.1

~~Employment Agreement by~~Form of Executive Severance and ~~between BB&T Insurance Holdings, Inc. and John Howard.~~

~~Filed herewith.~~

~~10.2~~

~~First Amendment to Employment Agreement with John Howard.~~Noncompetition Agreement.

Filed herewith.

Statement re computation of earnings per share.

Filed herewith as Computation of EPS note to the consolidated financial statements.

31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Filed herewith.

31.2

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Filed herewith.

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Filed herewith.

101.INS

XBRL Instance Document – the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

Filed herewith.

101.SCH

XBRL Taxonomy Extension Schema.

Filed herewith.

101.CAL

XBRL Taxonomy Extension Calculation Linkbase.

Filed herewith.

101.LAB

XBRL Taxonomy Extension Label Linkbase.

Filed herewith.

101.PRE

XBRL Taxonomy Extension Presentation Linkbase.

Filed herewith.

101.DEF

XBRL Taxonomy Definition Linkbase.

Filed herewith.

104

Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits101).

Filed herewith.

68 Truist Financial Corporation 71

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

TRUIST FINANCIAL CORPORATION

(Registrant)

Date:

~~November 1, 2021~~October 31, 2022

By:

/s/ ~~Daryl N. Bible~~Michael B. Maguire

~~Daryl N. Bible~~Michael B. Maguire

Senior Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

Date:

~~November 1, 2021~~October 31, 2022

By:

/s/ Cynthia B. Powell

Cynthia B. Powell

Executive Vice President and Corporate Controller

(Principal Accounting Officer)

72 Truist Financial Corporation 69









(Dollars in millions)	Balance at Jul 1, 2020		Charge-Offs		Recoveries		Provision (Benefit)		Other (2)		Balance at Sep 30, 2020
Commercial:
Commercial and industrial	$	2,137	$	(112)	$	20	$	140	$	—	$	2,185
CRE	391		(44)		—		155		—		502
Commercial construction	134		(19)		2		17		—		134
Lease financing	59		(44)		4		34		—		53
Consumer:
Residential mortgage	431		(4)		3		(6)		—		424
Residential home equity and direct	697		(52)		16		43		—		704
Indirect auto	1,190		(72)		22		49		—		1,189
Indirect other	213		(8)		4		13		—		222
Student	123		(6)		—		11		2		130
Credit card	327		(44)		8		29		—		320

ALLL	5,702		(405)		79		485		2		5,863
RUFC	431		—		—		(64)		(1)		366
ACL	$	6,133	$	(405)	$	79	$	421	$	1	$	6,229

(Dollars in millions)	Balance at Jul 1, 2021		Charge-Offs		Recoveries		Provision (Benefit)		Other (2)		Balance at Sep 30, 2021
Commercial:
Commercial and industrial	$	1,757	$	(57)	$	21	$	(180)	$	—	$	1,541
CRE	440		(1)		1		(70)		—		370
Commercial construction	69		—		1		(11)		—		59
Lease financing	47		—		21		(37)		—		31
Consumer:
Residential mortgage	321		(7)		3		(6)		—		311
Residential home equity and direct	694		(51)		20		(18)		—		645
Indirect auto	1,116		(73)		22		6		—		1,071
Indirect other	181		(13)		5		21		—		194
Student	129		(6)		1		1		1		126
Credit card	367		(31)		9		9		—		354

ALLL	5,121		(239)		104		(285)		1		4,702
RUFC	315		—		—		(39)		—		276
ACL	$	5,436	$	(239)	$	104	$	(324)	$	1	$	4,978



















(Dollars in millions)	Balance at Jan 1, 2020 (1)		Charge-Offs		Recoveries		Provision (Benefit)		Other (2)		Balance at Sep 30, 2020
Commercial:
Commercial and industrial	$	560	$	(274)	$	58	$	937	$	904	$	2,185
CRE	150		(59)		4		325		82		502
Commercial construction	52		(22)		10		78		16		134
Lease financing	10		(50)		4		(5)		94		53
Consumer:
Residential mortgage	176		(50)		7		26		265		424
Residential home equity and direct	107		(185)		46		282		454		704
Indirect auto	304		(294)		63		298		818		1,189
Indirect other	60		(46)		18		40		150		222
Student	—		(20)		1		24		125		130
Credit card	122		(147)		22		148		175		320
PCI	8		—		—		—		(8)		—
ALLL	1,549		(1,147)		233		2,153		3,075		5,863
RUFC	340		—		—		5		21		366
ACL	$	1,889	$	(1,147)	$	233	$	2,158	$	3,096	$	6,229




Table 7: Client Accommodations (1)
	Active Accommodations			Exited Accommodations
September 30, 2021 (Dollars in millions)	Total Count	Outstanding Balance		Outstanding Balance		% Paid-off or Current (2)		Types of Accommodations
Commercial	324	$	4	$	17,297	98	%	Clients may elect to defer loan or lease payments for up to 90 days without late fees being incurred but with finance charges continuing to accrue.
Consumer	13,715	553		8,292		87		Clients may elect to defer loan payments for time periods that generally range from 30 to 90 days without late fees being incurred but with finance charges generally continuing to accrue. The Company’s residential mortgage forbearance program generally provides up to 180 days of relief. Additional relief may be provided in certain circumstances.
Credit card	454	2		156		88		Clients may elect to defer payments for up to 90 days without late fees being incurred but with finance charges accruing. In addition, Truist provided credit card clients with 5% cash back on qualifying card purchases for certain important basic needs.
Total	14,493	$	559	$	25,745



Table 9: Selected Credit Exposures
September 30, 2021 (Dollars in billions)	Outstanding Balance		Percentage of Loans HFI
Senior Care	$	6.7	2.4	%
Hotels, Resorts & Cruise Lines	5.7		2.0
Acute Care Facilities	4.9		1.7
Oil & Gas Portfolio	3.8		1.3
Restaurants	2.4		0.8
Sensitive Retail	1.7		0.6
Total	$	25.2	8.8	%



Table 10: Asset Quality

(Dollars in millions)	Sep 30, 2021		Jun 30, 2021		Mar 31, 2021		Dec 31, 2020		Sep 30, 2020
NPAs:
NPLs:
Commercial and industrial	$	411	$	397	$	451	$	532	$	507
CRE	20		25		58		75		52
Commercial construction	7		12		13		14		7
Lease financing	12		5		23		28		32
Residential mortgage	306		302		290		316		205
Residential home equity and direct	146		165		172		205		180
Indirect auto	172		148		158		155		137
Indirect other	6		6		6		5		4

Total NPLs HFI	1,080		1,060		1,171		1,330		1,124
Loans held for sale	76		78		72		5		130
Total nonaccrual loans and leases	1,156		1,138		1,243		1,335		1,254
Foreclosed real estate	9		13		18		20		30
Other foreclosed property	39		41		38		32		30
Total nonperforming assets	$	1,204	$	1,192	$	1,299	$	1,387	$	1,314
TDRs:
Performing TDRs:
Commercial and industrial	$	144	$	144	$	142	$	78	$	84
CRE	8		24		47		47		36
Commercial construction	—		—		—		—		1
Lease financing	56		58		59		60		1
Residential mortgage	712		727		733		648		640
Residential home equity and direct	105		107		109		88		71
Indirect auto	390		389		399		392		336
Indirect other	7		7		7		6		5
Student	23		13		8		5		5
Credit card	30		32		35		37		38
Total performing TDRs	1,475		1,501		1,539		1,361		1,217
Nonperforming TDRs	159		190		207		164		140
Total TDRs	$	1,634	$	1,691	$	1,746	$	1,525	$	1,357
Loans 90 days or more past due and still accruing: (1)
Commercial and industrial	$	2	$	14	$	14	$	13	$	6
CRE	—		—		—		—		8

Lease financing	16		—		—		—		—
Residential mortgage	852		976		975		841		573
Residential home equity and direct	7		7		11		10		5
Indirect auto	2		2		2		2		8
Indirect other	2		1		1		2		3
Student	968		1,046		1,037		1,111		570
Credit card	23		22		32		29		24

Total loans 90 days or more past due and still accruing	$	1,872	$	2,068	$	2,072	$	2,008	$	1,197
Loans 30-89 days past due and still accruing: (1)
Commercial and industrial	$	131	$	128	$	117	$	83	$	155
CRE	4		7		9		14		7
Commercial construction	2		1		4		5		—
Lease financing	4		18		35		6		9
Residential mortgage	495		543		577		782		796
Residential home equity and direct	81		73		82		98		103
Indirect auto	560		428		328		495		321
Indirect other	53		47		45		68		52
Student	456		548		556		618		666
Credit card	37		31		35		51		39

Total loans 30-89 days past due and still accruing	$	1,823	$	1,824	$	1,788	$	2,220	$	2,148


Table 11: Asset Quality Ratios

As of / For the Three Months Ended	Sep 30, 2021		Jun 30, 2021		Mar 31, 2021		Dec 31, 2020		Sep 30, 2020
Loans 30-89 days past due and still accruing as a percentage of loans and leases HFI	0.64	%	0.64	%	0.61	%	0.74	%	0.70	%
Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI	0.66		0.72		0.71		0.67		0.39
NPLs as a percentage of loans and leases HFI	0.38		0.37		0.40		0.44		0.37
NPLs as a percentage of total loans and leases (1)	0.40		0.39		0.42		0.44		0.40
NPAs as a percentage of:
Total assets (1)	0.23		0.23		0.25		0.27		0.26
Loans and leases HFI plus foreclosed property	0.40		0.39		0.42		0.46		0.39
Net charge-offs as a percentage of average loans and leases HFI	0.19		0.20		0.33		0.27		0.42
ALLL as a percentage of loans and leases HFI	1.65		1.79		1.94		1.95		1.91
Ratio of ALLL to:
Net charge-offs	8.79x		8.98x		5.87x		7.15x		4.52x
NPLs	4.35x		4.83x		4.84x		4.39x		5.22x
Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI, excluding PPP and other government guaranteed (2)	0.03	%	0.04	%	0.04	%	0.04	%	0.03	%


Table 21: EVE Simulation Analysis
Change in Interest Rates (bps)	Hypothetical Percentage Change in EVE
		Sep 30, 2021		Sep 30, 2020

Up 100		(5.1)	%	7.4	%
No Change		—		—

Down 100		(3.5)		(6.8)


Table 22: VaR-based Measures
	Three Months Ended September 30,								Nine Months Ended September 30,
	2021				2020				2021				2020

(Dollars in millions)	10-Day Holding Period		1-Day Holding Period		10-Day Holding Period		1-Day Holding Period		10-Day Holding Period		1-Day Holding Period		10-Day Holding Period		1-Day Holding Period
VaR-based Measures:
Maximum	$	6	$	3	$	65	$	11	$	68	$	16	$	65	$	11
Average	5		2		31		6		16		5		23		5
Minimum	3		2		13		3		3		1		3		1
Period-end	6		3		46		8		6		3		46		8
VaR by Risk Class:
Interest Rate Risk			2				1				2				1
Credit Spread Risk			4				10				4				10
Equity Price Risk			2				2				2				2
Foreign Exchange Risk			—				—				—				—
Portfolio Diversification			(5)				(6)				(5)				(6)
Period-end			3				8				3				8


Table 24: Liquidity Sources
(Dollars in millions)	Sep 30, 2021		Dec 31, 2020
Unused borrowing capacity:
FRB	$	51,457	$	52,831
FHLB	52,459		52,274
AFS securities	120,462		93,623
Available secured borrowing capacity	224,378		198,728
Eligible cash at the FRB	14,674		13,437
Total	$	239,052	$	212,165