0000092230us-gaap:IntersegmentEliminationMembertfc:ConsumerBankingAndWealthMember2023-01-012023-03-31

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: March 31, ~~2022~~2023

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 March 31, ~~2022, 1,331,413,896~~2023, 1,331,917,887 shares of the registrant’s common stock, $5 par value, were outstanding.

TABLE OF CONTENTS

TRUIST FINANCIAL CORPORATION

FORM 10-Q

March 31, ~~2022~~2023

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, Divestitures, and Noncontrolling Interests

1011

Note 3. Securities Financing Activities

1011

Note 4. Investment Securities

1112

Note 5. Loans and ACL

1314

Note 6. Goodwill and Other Intangible Assets

1921

Note 7. Loan Servicing

2022

Note 8. Other Assets and Liabilities

2123

Note 9. Borrowings

2224

Note 10. Shareholders’ Equity

2225

Note 11. AOCI

2325

Note 12. Income Taxes

2326

Note 13. Benefit Plans

2326

Note 14. Commitments and Contingencies

2427

Note 15. Fair Value Disclosures

2730

Note 16. Derivative Financial Instruments

3134

Note 17. Computation of EPS

3538

Note 18. Operating Segments

3538

Item 2.

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

Regulatory Considerations

3740

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)

5455

Item 4.

Controls and Procedures

6264

PART II - Other Information

Item 1.

Legal Proceedings

6364

Item 1A.

Risk Factors

6364

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

6364

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

6365

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)
COVID-19			Coronavirus disease 2019

CRE			Commercial real estate
~~CRO~~			~~Chief Risk Officer~~

~~CVA~~DEI			~~Credit valuation adjustment~~Diversity, Equity & Inclusion


DTA

			Deferred tax asset






EPS			Earnings per common share
ESG			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

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
LIBOR Act			Adjustable Interest Rate (LIBOR) Act
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~~MRO			Model Risk ~~Management~~Oversight
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
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

PCD			Purchased credit deteriorated loans


PPP			Paycheck Protection Program, established by the CARES Act



~~ROU assets~~			~~Right-of-use assets~~

Truist Financial Corporation 1


Term			Definition
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.

TBVPS			Tangible book value per common share
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)
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, ~~2021:~~2022:

•~~residual risks and uncertainties relating to~~changes in the ~~Merger of heritage BB&T and heritage SunTrust,~~interest rate environment, including the ~~ability to realize the anticipated benefits~~replacement of ~~the Merger;~~

•~~expenses relating to the Merger and application and 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~~LIBOR as an interest ~~margin, decreased demand for certain types of loans, and increases in the allowance for credit losses; a resurgence of the pandemic, whether due to new variants of the coronavirus or other factors,~~rate benchmark, could ~~reintroduce or prolong these negative impacts and also~~ adversely affect Truist’s ~~capital~~revenue and ~~liquidity position or~~expenses, the value of assets and obligations, including our portfolio of investment securities, and the availability and cost of capital, ~~impair the ability of borrowers to repay outstanding loans, cause an outflow of deposits,~~cash flows, and ~~impair goodwill or other assets;~~liquidity;

•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, which could adversely affect Truist’s revenue~~collateral, and ~~expenses,~~may suffer losses if the value of ~~assets and obligations, and the availability and cost of capital, cash flows, and liquidity;~~collateral declines in stressed market conditions;

•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;~~markets, or negatively affect Truist’s overall liquidity or capitalization;

•Truist may be impacted by actual or perceived soundness of other financial institutions, including as a result of the financial or operational failure of a major financial institution, or concerns about the creditworthiness of such a financial institution or its ability to fulfill its obligations, which can cause substantial and cascading disruption within the financial markets and increased expenses, including FDIC insurance premiums, and could affect our ability to attract and retain depositors and to borrow or raise capital;

•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, including due to an outbreak or escalation of hostilities, 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;

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

•unexpected outflows of uninsured deposits may require us to sell investment securities at a loss;

•a loss of value of our investment portfolio could negatively impact market perceptions of us and could lead to deposit withdrawals;

•the effects of COVID-19 adversely impacted the Company’s operations and financial performance and similar adverse impacts resulting from pandemics could occur in future periods;

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

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

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

•Truist could fail 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 or compliance costs, 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,~~reputation and ~~governance;~~adversely impact business and revenues, including the effects of social media on market perceptions of Truist and banks generally;

•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;

•Truist faces substantial legal and operational risks in safeguarding personal information;

•evolving legislative, accounting and regulatory standards, including with respect to climate, capital, and liquidity requirements, which may become more stringent in light of recent market events, and results of regulatory examinations may adversely affect Truist’s financial condition and results of operations;

•~~the monetary~~increased scrutiny regarding Truist’s consumer sales practices, training practices, incentive compensation design, and ~~fiscal policies of the federal government~~governance could damage its reputation and ~~its agencies, including in response to rising inflation, could have a material adverse effect on profitability;~~adversely impact business and revenues;

•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, 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;

•Truist faces 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;

•there are 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 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 job markets may be less constrained by physical geography;

•Truist’s operations rely on its ability, and the ability of key external parties, to maintain appropriate-staffed workforces, and on the competence, trustworthiness, health and safety of teammates;

•Truist faces the risk of 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,~~cyberattacks, 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)	Mar 31, 2022		Dec 31, 2021		Unaudited (Dollars in millions, except per share data, shares in thousands)	Mar 31, 2023		Dec 31, 2022

Assets	Assets					Assets
Cash and due from banks	Cash and due from banks	$	5,516	$	5,085	Cash and due from banks	$	4,629	$	5,379
Interest-bearing deposits with banks	Interest-bearing deposits with banks	23,606		15,210		Interest-bearing deposits with banks	32,967		16,042
Securities borrowed or purchased under agreements to resell	Securities borrowed or purchased under agreements to resell	2,322		4,028		Securities borrowed or purchased under agreements to resell	3,637		3,181
Trading assets at fair value	Trading assets at fair value	5,920		4,423		Trading assets at fair value	4,601		4,905
AFS securities at fair value	AFS securities at fair value	84,753		153,123		AFS securities at fair value	71,858		71,801
HTM securities (fair value of $59,124 and $1,495 at fair value, respectively)		61,662		1,494
LHFS (including $3,364 and $3,544 at fair value, respectively)		4,167		4,812
Loans and leases (including $21 and $23 at fair value, respectively)		290,081		289,513
HTM securities (fair value of $48,097 and $47,791, respectively)						HTM securities (fair value of $48,097 and $47,791, respectively)	56,932		57,713
LHFS (including $1,911 and $1,065 at fair value, respectively)						LHFS (including $1,911 and $1,065 at fair value, respectively)	2,160		1,444
Loans and leases (including $17 and $18 at fair value, respectively)						Loans and leases (including $17 and $18 at fair value, respectively)	327,673		325,991
ALLL	ALLL	(4,170)		(4,435)		ALLL	(4,479)		(4,377)
Loans and leases, net of ALLL	Loans and leases, net of ALLL	285,911		285,078		Loans and leases, net of ALLL	323,194		321,614
Premises and equipment	Premises and equipment	3,662		3,700		Premises and equipment	3,519		3,605
Goodwill	Goodwill	26,284		26,098		Goodwill	27,014		27,013
CDI and other intangible assets	CDI and other intangible assets	3,693		3,408		CDI and other intangible assets	3,535		3,672
Loan servicing rights at fair value	Loan servicing rights at fair value	3,013		2,633		Loan servicing rights at fair value	3,303		3,758
Other assets (including $3,137 and $3,436 at fair value, respectively)		33,470		32,149
Other assets (including $1,549 and $1,582 at fair value, respectively)						Other assets (including $1,549 and $1,582 at fair value, respectively)	37,005		35,128
Total assets	Total assets	$	543,979	$	541,241	Total assets	$	574,354	$	555,255
Liabilities	Liabilities					Liabilities
Noninterest-bearing deposits	Noninterest-bearing deposits	$	150,446	$	145,892	Noninterest-bearing deposits	$	128,719	$	135,742
Interest-bearing deposits	Interest-bearing deposits	277,882		270,596		Interest-bearing deposits	276,278		277,753
Short-term borrowings (including $1,717 and $1,731 at fair value, respectively)		5,147		5,292
Short-term borrowings (including $1,789 and $1,551 at fair value, respectively)						Short-term borrowings (including $1,789 and $1,551 at fair value, respectively)	23,678		23,422
Long-term debt	Long-term debt	33,773		35,913		Long-term debt	69,895		43,203
Other liabilities (including $1,482 and $586 at fair value, respectively)		11,687		14,277
Other liabilities (including $2,589 and $2,971 at fair value, respectively)						Other liabilities (including $2,589 and $2,971 at fair value, respectively)	13,390		14,598
Total liabilities	Total liabilities	478,935		471,970		Total liabilities	511,960		494,718
Shareholders’ Equity	Shareholders’ Equity					Shareholders’ Equity
Preferred stock	Preferred stock	6,673		6,673		Preferred stock	6,673		6,673
Common stock, $5 par value	Common stock, $5 par value	6,657		6,639		Common stock, $5 par value	6,660		6,634
Additional paid-in capital	Additional paid-in capital	34,539		34,565		Additional paid-in capital	34,582		34,544
Retained earnings	Retained earnings	23,687		22,998		Retained earnings	27,038		26,264
AOCI, net of deferred income taxes	AOCI, net of deferred income taxes	(6,535)		(1,604)		AOCI, net of deferred income taxes	(12,581)		(13,601)
Noncontrolling interests	Noncontrolling interests	23		—		Noncontrolling interests	22		23
Total shareholders’ equity	Total shareholders’ equity	65,044		69,271		Total shareholders’ equity	62,394		60,537
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	543,979	$	541,241	Total liabilities and shareholders’ equity	$	574,354	$	555,255
Common shares outstanding	Common shares outstanding	1,331,414		1,327,818		Common shares outstanding	1,331,918		1,326,829
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		223		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 March 31,
2022 2021
Interest Income
Interest and fees on loans and leases $ 2,644 $ 3,002
Interest on securities 640 443
Interest on other earning assets 73 49
Total interest income 3,357 3,494
Interest Expense
Interest on deposits 32 47
Interest on long-term debt 132 148
Interest on other borrowings 10 14
Total interest expense 174 209
Net Interest Income 3,183 3,285
Provision for credit losses (95) 48
Net Interest Income After Provision for Credit Losses 3,278 3,237
Noninterest Income
Insurance income 727 626
Investment banking and trading income 261 346
Wealth management income 343 341
Service charges on deposits 252 258
Card and payment related fees 212 200
Residential mortgage income 89 100
Lending related fees 85 100
Operating lease income 58 68
Commercial mortgage income 32 33
Income from bank-owned life insurance 51 50
Securities gains (losses) (69) —
Other income 101 75
Total noninterest income 2,142 2,197
Noninterest Expense
Personnel expense 2,051 2,142
Professional fees and outside processing 363 350
Software expense 232 210
Net occupancy expense 208 209
Amortization of intangibles 137 144
Equipment expense 118 113
Marketing and customer development 84 66
Operating lease depreciation 48 50
Loan-related expense 44 54
Regulatory costs 35 25
Merger-related and restructuring charges 216 141
Loss (gain) on early extinguishment of debt — (3)
Other expense 138 109
Total noninterest expense 3,674 3,610
Earnings
Income before income taxes 1,746 1,824
Provision for income taxes 330 351
Net income 1,416 1,473
Noncontrolling interests 1 (4)
Net income available to the bank holding company 1,415 1,477
Preferred stock dividends and other 88 143
Net income available to common shareholders $ 1,327 $ 1,334
Basic EPS $ 1.00 $ 0.99
Diluted EPS 0.99 0.98
Basic weighted average shares outstanding 1,329,037 1,345,666
Diluted weighted average shares outstanding 1,341,563 1,358,932



Unaudited (Dollars in millions, except per share data, shares in thousands)	Three Months Ended March 31,
		2023		2022
Interest Income
Interest and fees on loans and leases		$	4,656	$	2,644
Interest on securities		752		640
Interest on other earning assets		377		73
Total interest income		5,785		3,357
Interest Expense
Interest on deposits		1,125		32
Interest on long-term debt		514		132
Interest on other borrowings		278		10
Total interest expense		1,917		174
Net Interest Income		3,868		3,183
Provision for credit losses		502		(95)
Net Interest Income After Provision for Credit Losses		3,366		3,278
Noninterest Income
Insurance income		813		727
Wealth management income		339		343
Investment banking and trading income		261		261
Service charges on deposits		249		252
Card and payment related fees		230		212
Mortgage banking income		142		121
Lending related fees		106		85
Operating lease income		67		58


Securities gains (losses)		—		(69)
Other income		27		152
Total noninterest income		2,234		2,142
Noninterest Expense
Personnel expense		2,181		2,051
Professional fees and outside processing		314		363
Software expense		214		232
Net occupancy expense		183		208
Amortization of intangibles		136		137
Equipment expense		110		118
Marketing and customer development		78		84
Operating lease depreciation		46		48

Regulatory costs		75		35
Merger-related and restructuring charges		63		216

Other expense		291		182
Total noninterest expense		3,691		3,674
Earnings
Income before income taxes		1,909		1,746
Provision for income taxes		394		330
Net income		1,515		1,416
Noncontrolling interests		2		1

Preferred stock dividends and other		103		88
Net income available to common shareholders		$	1,410	$	1,327
Basic EPS		$	1.06	$	1.00
Diluted EPS		1.05		0.99
Basic weighted average shares outstanding		1,328,602		1,329,037
Diluted weighted average shares outstanding		1,339,480		1,341,563

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 March 31,				Unaudited (Dollars in millions)	Three Months Ended March 31,
		2022		2021				Unaudited (Dollars in millions)		2023			2022

Net income	Net income	$	1,416	$	1,473				Net income		$	1,515		$	1,416
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	8		35					Net change in net pension and postretirement costs		(14)			8
Net change in cash flow hedges	Net change in cash flow hedges	5		36					Net change in cash flow hedges		125			5
Net change in AFS securities	Net change in AFS securities	(4,989)		(2,304)					Net change in AFS securities		853			(4,989)
Net change in HTM securities	Net change in HTM securities	44		—					Net change in HTM securities		55			44
Other, net	Other, net	1		1					Other, net		1			1
Total OCI, net of tax	Total OCI, net of tax	(4,931)		(2,232)					Total OCI, net of tax		1,020			(4,931)
Total comprehensive income		$	(3,515)	$	(759)
Total OCI									Total OCI		$	2,535		$	(3,515)
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	$	2	$	11				Net change in net pension and postretirement costs		$	(3)		$	2
Net change in cash flow hedges	Net change in cash flow hedges	1		11					Net change in cash flow hedges		38			1
Net change in AFS securities	Net change in AFS securities	(1,513)		(707)					Net change in AFS securities		262			(1,513)
Net change in HTM securities	Net change in HTM securities	13		—					Net change in HTM securities		15			13
Other, net		—		—

Total income taxes related to OCI	Total income taxes related to OCI	$	(1,497)	$	(685)				Total income taxes related to OCI		$	312		$	(1,497)

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, January 1, 2021		1,348,961	$	8,048	$	6,745	$	35,843	$	19,455	$	716	$	105	$	70,912
Net income		—	—		—		—		1,477		—		(4)		1,473
OCI		—	—		—		—		—		(2,232)		—		(2,232)

Issued in connection with equity awards, net		5,388	—		27		(111)		—		—		—		(84)

Repurchase of common stock		(9,504)	—		(48)		(458)		—		—		—		(506)
Redemption of preferred stock		—	(924)		—		—		(26)		—		—		(950)
Cash dividends declared on common stock		—	—		—		—		(605)		—		—		(605)
Cash dividends declared on preferred stock		—	—		—		—		(117)		—		—		(117)
Equity-based compensation expense		—	—		—		86		—		—		—		86

Other, net		—	—		—		—		—		—		(101)		(101)
Balance, March 31, 2021		1,344,845	$	7,124	$	6,724	$	35,360	$	20,184	$	(1,516)	$	—	$	67,876
Balance, January 1, 2022	Balance, January 1, 2022	1,327,818	$	6,673	$	6,639	$	34,565	$	22,998	$	(1,604)	$	—	$	69,271	Balance, January 1, 2022	1,327,818	$	6,673	$	6,639	$	34,565	$	22,998	$	(1,604)	$	—	$	69,271
Net income	Net income	—	—		—		—		1,415		—		1		1,416		Net income	—	—		—		—		1,415		—		1		1,416
OCI	OCI	—	—		—		—		—		(4,931)		—		(4,931)		OCI	—	—		—		—		—		(4,931)		—		(4,931)

Issued in connection with equity awards, net	Issued in connection with equity awards, net	3,596	—		18		(106)		(1)		—		—		(89)		Issued in connection with equity awards, net	3,596	—		18		(106)		(1)		—		—		(89)

Cash dividends declared on common stock	Cash dividends declared on common stock	—	—		—		—		(637)		—		—		(637)		Cash dividends declared on common stock	—	—		—		—		(637)		—		—		(637)
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	—	—		—		80		—		—		—		80		Equity-based compensation expense	—	—		—		80		—		—		—		80

Other, net	Other, net	—	—		—		—		—		—		22		22		Other, net	—	—		—		—		—		—		22		22
Balance, March 31, 2022	Balance, March 31, 2022	1,331,414	$	6,673	$	6,657	$	34,539	$	23,687	$	(6,535)	$	23	$	65,044	Balance, March 31, 2022	1,331,414	$	6,673	$	6,657	$	34,539	$	23,687	$	(6,535)	$	23	$	65,044
Balance, January 1, 2023																	Balance, January 1, 2023	1,326,829	$	6,673	$	6,634	$	34,544	$	26,264	$	(13,601)	$	23	$	60,537
Net income																	Net income	—	—		—		—		1,513		—		2		1,515
OCI																	OCI	—	—		—		—		—		1,020		—		1,020

Issued in connection with equity awards, net																	Issued in connection with equity awards, net	5,089	—		26		(45)		(1)		—		—		(20)

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	—	—		—		—		(103)		—		—		(103)
Equity-based compensation expense																	Equity-based compensation expense	—	—		—		83		—		—		—		83

Other, net																	Other, net	—	—		—		—		56		—		(3)		53
Balance, March 31, 2023																	Balance, March 31, 2023	1,331,918	$	6,673	$	6,660	$	34,582	$	27,038	$	(12,581)	$	22	$	62,394

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 (Dollars in millions)	Unaudited (Dollars in millions)	Three Months Ended March 31,				Unaudited (Dollars in millions)	Three Months Ended March 31,
		2022		2021			2023		2022
Cash Flows From Operating Activities:	Cash Flows From Operating Activities:					Cash Flows From Operating Activities:
Net income	Net income	$	1,416	$	1,473	Net income	$	1,515	$	1,416
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	(95)		48		Provision for credit losses	502		(95)

Depreciation	Depreciation	195		201		Depreciation	180		195

Amortization of intangibles	Amortization of intangibles	137		144		Amortization of intangibles	136		137

Securities (gains) losses	Securities (gains) losses	69		—		Securities (gains) losses	—		69
Net change in operating assets and liabilities:	Net change in operating assets and liabilities:					Net change in operating assets and liabilities:
LHFS	LHFS	180		(510)		LHFS	(846)		180
Loan servicing rights	Loan servicing rights	(380)		(342)		Loan servicing rights	27		(380)
Pension asset	Pension asset	(410)		(452)		Pension asset	(1,346)		(410)
Derivative assets and liabilities	Derivative assets and liabilities	986		1,060		Derivative assets and liabilities	(12)		986
Trading assets	Trading assets	(1,497)		(1,222)		Trading assets	304		(1,497)
Other assets and other liabilities	Other assets and other liabilities	(558)		(915)		Other assets and other liabilities	(490)		(558)

Other, net	Other, net	(231)		482		Other, net	148		(231)
Net cash from operating activities	Net cash from operating activities	(188)		(33)		Net cash from operating activities	118		(188)
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	3,127		60		Proceeds from sales of AFS securities	4		3,127
Proceeds from maturities, calls and paydowns of AFS securities	Proceeds from maturities, calls and paydowns of AFS securities	5,259		8,862		Proceeds from maturities, calls and paydowns of AFS securities	1,279		5,259
Purchases of AFS securities	Purchases of AFS securities	(7,219)		(15,601)		Purchases of AFS securities	(140)		(7,219)
Proceeds from maturities, calls and paydowns of HTM securities	Proceeds from maturities, calls and paydowns of HTM securities	857		—		Proceeds from maturities, calls and paydowns of HTM securities	858		857
Purchases of HTM securities	Purchases of HTM securities	(3,020)		—		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	(134)		8,249		Originations and purchases of loans and leases, net of sales and principal collected	(1,835)		(134)

Net cash received (paid) for FHLB stock						Net cash received (paid) for FHLB stock	(1,147)		(1)
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	1,706		396		Net cash received (paid) for securities borrowed or purchased under agreements to resell	(456)		1,706

Net cash received (paid) for asset acquisitions, business combinations, and divestitures	Net cash received (paid) for asset acquisitions, business combinations, and divestitures	(488)		1,130		Net cash received (paid) for asset acquisitions, business combinations, and divestitures	—		(488)

Other, net	Other, net	(122)		23		Other, net	(613)		(121)
Net cash from investing activities	Net cash from investing activities	(34)		3,119		Net cash from investing activities	(2,050)		(34)
Cash Flows From Financing Activities:	Cash Flows From Financing Activities:					Cash Flows From Financing Activities:
Net change in deposits	Net change in deposits	11,842		14,489		Net change in deposits	(8,498)		11,842
Net change in short-term borrowings	Net change in short-term borrowings	(145)		(203)		Net change in short-term borrowings	224		(145)
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	66		1,299		Proceeds from issuance of long-term debt	35,029		66
Repayment of long-term debt	Repayment of long-term debt	(1,699)		(3,032)		Repayment of long-term debt	(8,444)		(1,699)
Repurchase of common stock		—		(506)

Redemption of preferred stock		—		(950)

Cash dividends paid on common stock	Cash dividends paid on common stock	(637)		(605)		Cash dividends paid on common stock	(691)		(637)
Cash dividends paid on preferred stock	Cash dividends paid on preferred stock	(88)		(117)		Cash dividends paid on preferred stock	(103)		(88)
Net cash received (paid) for hedge unwinds	Net cash received (paid) for hedge unwinds	(198)		—		Net cash received (paid) for hedge unwinds	(378)		(198)
Other, net	Other, net	(92)		(197)		Other, net	(32)		(92)
Net cash from financing activities	Net cash from financing activities	9,049		10,178		Net cash from financing activities	17,107		9,049
Net Change in Cash and Cash Equivalents	Net Change in Cash and Cash Equivalents	8,827		13,264		Net Change in Cash and Cash Equivalents	15,175		8,827
Cash and Cash Equivalents, January 1	Cash and Cash Equivalents, January 1	20,295		18,868		Cash and Cash Equivalents, January 1	21,421		20,295
Cash and Cash Equivalents, March 31	Cash and Cash Equivalents, March 31	$	29,122	$	32,132	Cash and Cash Equivalents, March 31	$	36,596	$	29,122
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	$	156	$	248	Interest expense	$	1,667	$	156
Income taxes	Income taxes	40		28		Income taxes	23		40

Noncash investing activities:	Noncash investing activities:					Noncash investing activities:

Transfer of AFS securities to HTM	Transfer of AFS securities to HTM	59,436		—		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, ~~2021~~2022 should be referred to in connection with these unaudited interim consolidated financial statements. The Company updated its accounting policies in connection with recently adopted accounting standards. There were no other 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, ~~2021~~2022 that could have a material effect on the Company’s financial statements.

Reclassifications

In the first quarter of 2023, the Company reclassified certain portfolios within the consumer portfolio segment to delineate home equity from other consumer portfolios. Additionally, during the first quarter of 2023, Truist reorganized Prime Rate Premium Finance Corporation, which includes AFCO Credit Corporation and CAFO Holding Company, into the C&CB segment from the IH segment. Prior periods were revised to conform to the current presentation. Certain other 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 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 securities, MSRs, LHFS, trading loans, and derivative assets and liabilities; goodwill and other intangible assets; income taxes; and pension and postretirement benefit obligations.

Loan Modifications

In certain circumstances, the Company enters into agreements to modify the terms of loans to borrowers that are experiencing financial difficulty. The scope of these loan modifications varies from portfolio to portfolio but generally falls into one of the following categories:

•Renewals: represent the renewal of a loan where the Company has concluded that the borrower is experiencing financial difficulty. Commercial renewals result in an extension of the maturity date of the loan (or in some cases a contraction of the loan term), and other significant terms of the loan (e.g., interest rate, collateral, guarantor support, etc.) are re-evaluated in connection with the renewal event.

•Term extensions: represent an adjustment to the maturity date of the loan that typically results in a reduction to the borrower’s scheduled payment over the remainder of the loan.

•Capitalizations: represents the capitalization of forborne loan payments and/or other amounts advanced on behalf of the borrower into the principal balance of a residential mortgage loan.

•Payment delays: provide the borrower with a temporary postponement of loan payments that is considered other-than-insignificant, which has been defined as a payment delay that exceeds 90 days, or three payment cycles, over a rolling 12-month period. These postponed loan payments may result in an extension of the ultimate maturity date of the loan or may be capitalized into the principal balance of the loan in certain circumstances.

•Combinations: in certain circumstances more than one type of a modification is provided to a borrower (e.g., interest rate reduction and term extension).

•Other: represents other types of loan modifications that are not considered significant for disclosure purposes.

The Company has identified borrowers that are included in the Loan Modifications disclosures in “Note 5. Loans and ACL” as follows:

•Commercial: the Company evaluates all modifications of loans to commercial borrowers that are rated substandard or worse and includes the modifications in its disclosure to the extent that the modification is considered other-than-insignificant.

•Consumer and credit card: loan modifications to consumer and credit borrowers are generally limited to borrowers that are experiencing financial difficulty. As a result, the Company evaluates all modifications of consumer and credit card loans and includes them in the disclosure to the extent that they are considered other-than insignificant.

Truist Financial Corporation 9

Refer to the Annual Report on Form 10-K for the year ended December 31, 2022 for accounting policies related to prior period, including the Company’s TDR policies.

ALLL

The ALLL represents management’s best estimate of expected future credit losses related to its loan and lease portfolio at the balance sheet date. The Company’s ALLL estimation process gives consideration to relevant available information from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts. The quantitative models used to forecast expected credit losses use portfolio balances, macroeconomic forecast data, portfolio composition and loan attributes as the primary inputs. Loss estimates are informed by historical loss experience that includes losses incurred on loans that were previously modified by the Company. As a result, the Company has concluded that aside from the limited circumstances where principal forgiveness is granted to a borrower, the financial effect of loan modifications is already inherently included in the ALLL.

Income Taxes

The Company’s provision for income taxes is based on income and expense reported for financial statement purposes after adjustments for permanent differences such as interest income from lending to tax-exempt entities, tax credits, and amortization expense related to qualified tax credit investments. In computing the provision for income taxes, the Company evaluates the technical merits of its income tax positions based on current legislative, judicial, and regulatory guidance. The proportional amortization method of accounting is used on affordable housing and other qualified tax credit investments, such that the initial cost of the investment giving rise to tax credits is amortized in proportion to the allocation of tax credits in each period as a component of the provision for income taxes. Truist includes the initial investment cash flows and subsequent credits within operating activities in the Consolidated Statement of Cash Flows.

Changes in Accounting Principles and Effects of New Accounting Pronouncements


Standard / Adoption Date	Description	Effects on the Financial Statements


		Standards Adopted During the Current Year
~~Standards Not Yet Adopted~~
Troubled Debt Restructurings and Vintage Disclosures January 1, 2023	Eliminates ~~the accounting guidance for~~ 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 evaluating~~adopted this ~~standard.~~standard on a modified-retrospective basis. Upon adoption, ~~Truist expects~~ the ~~newly required~~Company eliminated the separate ACL estimation process for loans classified as TDRs. The adoption of this standard did not have a material impact on the financial statements. The Company’s revised disclosures ~~to be~~in accordance with the new standard are included in ~~the~~“Note 5. Loans and ~~ACL footnote.~~ACL.”
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 under the method (previously named, last-of-layer method).~~ 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 and specifies how hedge basis adjustments should be considered when determining credit losses for the assets included in the closed portfolio.	The adoption of this standard did not have a material impact on the Company’s active last-of-layer hedges.
Investments in Tax Credit Structures January 1, 2023	Allows reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. Previously, reporting entities were only permitted to apply the proportional amortization method only to qualifying tax equity investments in low-income housing tax credit structures.	Truist ~~is evaluating~~early adopted this standard on a modified-retrospective basis. The adoption of this standard did not have a material impact on the ~~use of the portfolio layer method in its hedging programs.~~financial statements. Refer to “Note 14. Commitments and Contingencies” for additional information regarding tax credit investments.

10 Truist Financial Corporation 9

NOTE 2. Business Combinations, Divestitures, and Noncontrolling Interests

Noncontrolling Interest

On ~~March 1, 2022, Truist acquired Kensington Vanguard National Land Services, one~~April 3, 2023, the Company completed its sale of a 20% stake of the ~~country's largest independent full-service national title insurance agencies,~~common equity in Truist Insurance Holdings, LLC to an investor group led by Stone Point Capital, LLC for $1.95 billion, with the proceeds, net of tax, recognized as an increase to shareholders’ equity. In connection with the transaction, the noncontrolling interest holder received profit interests representing 3.75% coverage on Truist Insurance Holdings’ fully diluted equity value at transaction close, and certain consent and exit rights commensurate with a noncontrolling investor. The transaction allows Truist to maintain strategic flexibility and future upside in Truist Insurance Holdings, which ~~resulted~~will continue to benefit from Truist’s operations, access to capital, and client relationships, while creating additional opportunities for growth of Truist Insurance Holdings through the support of a strong blue-chip investor in approximately $187 million of goodwill and $148 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 over a term of 15 years based upon the estimated economic benefits received. Goodwill of $129 million and identifiable intangible assets of $110 million are deductible for tax purposes.Stone Point Capital.

NOTE 3. Securities Financing Activities

Securities purchased under 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. The following table presents securities borrowed or purchased under agreements to resell:


(Dollars in millions)	(Dollars in millions)	Mar 31, 2022		Dec 31, 2021		(Dollars in millions)	Mar 31, 2023		Dec 31, 2022

Securities purchased under agreements to resell	Securities purchased under agreements to resell	$	1,678	$	3,460	Securities purchased under agreements to resell	$	2,685	$	2,415
Securities borrowed	Securities borrowed	644		568		Securities borrowed	952		766
Total securities borrowed or purchased under agreements to resell	Total securities borrowed or purchased under agreements to resell	$	2,322	$	4,028	Total securities borrowed or purchased under agreements to resell	$	3,637	$	3,181

Fair value of collateral held available to be resold or repledged		$	2,316	$	4,005
Fair value of securities repledged		342		1,141
Fair value of collateral permitted to be resold or repledged						Fair value of collateral permitted to be resold or repledged	$	3,520	$	3,058
Fair value of securities resold or repledged						Fair value of securities resold or repledged	657		864

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:


		March 31, 2022				December 31, 2021						March 31, 2023						December 31, 2022
(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	$	439	$	41	$	480	$	749	$	409		$	1,158	U.S. Treasury	$	631	$	10	$	641	$	318	$	—	$	318
State and Municipal															State and Municipal	297		—		297		272		—		272
GSE	GSE	81		31		112		53		25			78		GSE	23		—		23		74		—		74
Agency MBS - residential	Agency MBS - residential	973		338		1,311		720		141			861		Agency MBS - residential	666		6		672		1,019		26		1,045
Corporate and other debt securities	Corporate and other debt securities	150		314		464		213		125			338		Corporate and other debt securities	185		304		489		369		50		419
Total securities sold under agreements to repurchase	Total securities sold under agreements to repurchase	$	1,643	$	724	$	2,367	$	1,735	$	700		$	2,435	Total securities sold under agreements to repurchase	$	1,802	$	320	$	2,122	$	2,052	$	76	$	2,128

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 11

NOTE 4. Investment Securities

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


March 31, 2022 (Dollars in millions)		Amortized Cost			Gross Unrealized					Fair Value
				Gains			Losses
March 31, 2023 (Dollars in millions)												March 31, 2023 (Dollars in millions)	Amortized Cost				Gross Unrealized							Fair Value
																Gains				Losses
AFS securities:	AFS securities:															AFS securities:
U.S. Treasury	U.S. Treasury	$	9,891		$	—		$	479	$	9,412	U.S. Treasury		$	11,083			$	2			$	644			$	10,441
GSE	GSE	257			—			12		245		GSE	332				—				31				301
Agency MBS - residential	Agency MBS - residential	71,956			37			3,755		68,238		Agency MBS - residential	64,382				1				9,208			55,175
Agency MBS - commercial	Agency MBS - commercial	2,831			2			174		2,659		Agency MBS - commercial	2,872				—				474			2,398
States and political subdivisions	States and political subdivisions	366			19			15		370		States and political subdivisions	425				17				17			425
Non-agency MBS	Non-agency MBS	4,149			—			346		3,803		Non-agency MBS	3,884				—				786			3,098
Other	Other	26			—			—		26		Other	20				—				—			20
Total AFS securities	Total AFS securities	$	89,476		$	58		$	4,781	$	84,753	Total AFS securities	$	82,998			$	20			$	11,160		$	71,858
HTM securities:	HTM securities:											HTM securities:

Agency MBS - residential	Agency MBS - residential	$	61,662		$	—		$	2,538	$	59,124	Agency MBS - residential	$	56,932			$	—			$	8,835		$	48,097

December 31, 2021 (Dollars in millions)		Amortized Cost			Gross Unrealized					Fair Value
				Gains			Losses
December 31, 2022 (Dollars in millions)												December 31, 2022 (Dollars in millions)	Amortized Cost				Gross Unrealized							Fair Value
																Gains				Losses
AFS securities:	AFS securities:															AFS securities:
U.S. Treasury	U.S. Treasury	$	9,892		$	9		$	106	$	9,795	U.S. Treasury		$	11,080			$	—			$	785			$	10,295
GSE	GSE	1,667			33			2		1,698		GSE	339				—				36				303
Agency MBS - residential	Agency MBS - residential	135,886			656			2,500		134,042		Agency MBS - residential	65,377				—				10,152			55,225
Agency MBS - commercial	Agency MBS - commercial	2,928			18			64		2,882		Agency MBS - commercial	2,887				—				463			2,424
States and political subdivisions	States and political subdivisions	382			39			1		420		States and political subdivisions	425				15				24			416
Non-agency MBS	Non-agency MBS	4,305			—			47		4,258		Non-agency MBS	3,927				—				810			3,117
Other	Other	28			—			—		28		Other	21				—				—			21
Total AFS securities	Total AFS securities	$	155,088		$	755		$	2,720	$	153,123	Total AFS securities	$	84,056			$	15			$	12,270		$	71,801
HTM securities:	HTM securities:											HTM securities:

Agency MBS - residential	Agency MBS - residential	$	1,494		$	1		$	—	$	1,495	Agency MBS - residential	$	57,713			$	—			$	9,922		$	47,791

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. Management determined that it has both the positive intentThe amortized cost and ~~ability to hold these securities to maturity. On the date of transfer, the difference between the par value and the~~estimated 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~~certain MBS securities issued by FNMA and FHLMC that exceeded 10% of shareholders’ equity at March 31, 2022. The FNMA investments had total amortized cost and fair value of $45.2 billion and $43.0 billion, respectively. The FHLMC investments had total amortized cost and fair value of $45.7 billion and $43.4 billion, respectively.are shown in the table below:


	March 31, 2023
(Dollars in millions)	Amortized Cost		Fair Value
FNMA	$	41,783	$	35,517
FHLMC	42,308		35,747

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
March 31, 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
March 31, 2023 (Dollars in millions)																						March 31, 2023 (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	$	309	$	8,602	$	980	$	—	$	9,891	$	307	$	8,188	$	917	$	—	$	9,412		U.S. Treasury		$	2,587		$	8,448		$	19		$	29		$	11,083		$	2,528		$	7,869		$	18		$	26		$	10,441
GSE	GSE	—		—		—		257		257		—		—		—		245		245			GSE		—			7			11			314			332			—			7			10			284			301
Agency MBS - residential	Agency MBS - residential	—		1		633		71,322		71,956		—		1		624		67,613		68,238			Agency MBS - residential		—			65			580			63,737			64,382			—			62			547			54,566			55,175
Agency MBS - commercial	Agency MBS - commercial	—		8		15		2,808		2,831		—		8		14		2,637		2,659			Agency MBS - commercial		1			7			71			2,793			2,872			1			7			68			2,322			2,398
States and political subdivisions	States and political subdivisions	15		76		124		151		366		15		76		129		150		370			States and political subdivisions		3			94			139			189			425			3			93			148			181			425
Non-agency MBS	Non-agency MBS	—		—		—		4,149		4,149		—		—		—		3,803		3,803			Non-agency MBS		—			—			—			3,884			3,884			—			—			—			3,098			3,098
Other	Other	—		6		—		20		26		—		6		—		20		26			Other		6			—			14			—			20			6			—			14			—			20
Total AFS securities	Total AFS securities	$	324	$	8,693	$	1,752	$	78,707	$	89,476	$	322	$	8,279	$	1,684	$	74,468	$	84,753		Total AFS securities		$	2,597		$	8,621		$	834		$	70,946		$	82,998		$	2,538		$	8,038		$	805		$	60,477		$	71,858
HTM securities:	HTM securities:																						HTM securities:

Agency MBS - residential	Agency MBS - residential	$	—	$	—	$	—	$	61,662	$	61,662	$	—	$	—	$	—	$	59,124	$	59,124		Agency MBS - residential		$	—		$	—		$	—		$	56,932		$	56,932		$	—		$	—		$	—		$	48,097		$	48,097

12 Truist Financial Corporation 11

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
March 31, 2022 (Dollars in millions)		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

March 31, 2023 (Dollars in millions)														March 31, 2023 (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	$	8,793	$	431	$	602	$	48	$	9,395	$	479	U.S. Treasury	$	1,267	$	27	$	8,977	$	617	$	10,244	$	644
GSE	GSE	209		12		—		—		209		12		GSE	112		5		175		26		287		31
Agency MBS - residential	Agency MBS - residential	54,565		2,940		9,386		815		63,951		3,755		Agency MBS - residential	1,267		65		53,717		9,143		54,984		9,208
Agency MBS - commercial	Agency MBS - commercial	909		40		1,672		134		2,581		174		Agency MBS - commercial	318		24		2,066		450		2,384		474
States and political subdivisions	States and political subdivisions	206		13		21		2		227		15		States and political subdivisions	42		1		210		16		252		17
Non-agency MBS	Non-agency MBS	3,803		346		—		—		3,803		346		Non-agency MBS	—		—		3,098		786		3,098		786
Other	Other	21		—		—		—		21		—		Other	5		—		15		—		20		—
Total	Total	$	68,506	$	3,782	$	11,681	$	999	$	80,187	$	4,781	Total	$	3,011	$	122	$	68,258	$	11,038	$	71,269	$	11,160
HTM securities:	HTM securities:													HTM securities:

Agency MBS - residential	Agency MBS - residential	$	39,486	$	1,388	$	19,638	$	1,150	$	59,124	$	2,538	Agency MBS - residential	$	—	$	—	$	48,097	$	8,835	$	48,097	$	8,835

		Less than 12 months				12 months or more				Total					Less than 12 months				12 months or more				Total
December 31, 2021 (Dollars in millions)		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
December 31, 2022 (Dollars in millions)														December 31, 2022 (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	$	8,412	$	88	$	582	$	18	$	8,994	$	106	U.S. Treasury	$	2,069	$	49	$	8,186	$	736	$	10,255	$	785
GSE	GSE	104		2		—		—		104		2		GSE	180		14		114		22		294		36
Agency MBS - residential	Agency MBS - residential	101,262		2,377		2,638		123		103,900		2,500		Agency MBS - residential	25,041		3,263		30,050		6,889		55,091		10,152
Agency MBS - commercial	Agency MBS - commercial	1,749		50		413		14		2,162		64		Agency MBS - commercial	790		92		1,631		371		2,421		463
States and political subdivisions	States and political subdivisions	—		—		22		1		22		1		States and political subdivisions	251		21		20		3		271		24
Non-agency MBS	Non-agency MBS	4,258		47		—		—		4,258		47		Non-agency MBS	—		—		3,117		810		3,117		810
Other	Other	6		—		—		—		6		—		Other	21		—		—		—		21		—
Total	Total	$	115,791	$	2,564	$	3,655	$	156	$	119,446	$	2,720	Total	$	28,352	$	3,439	$	43,118	$	8,831	$	71,470	$	12,270
HTM securities:														HTM securities:

Agency MBS - residential														Agency MBS - residential	$	29,369	$	5,613	$	18,422	$	4,309	$	47,791	$	9,922

At March 31, ~~2022~~2023 and December 31, ~~2021, 0~~2022, 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 ~~consists~~consist of residential agency MBS. Accordingly, the Company does not expect to incur any credit losses on ~~HTM~~ investment securities.

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


(Dollars in millions)	(Dollars in millions)	Three Months Ended March 31,				(Dollars in millions)		Three Months Ended March 31,
		2022		2021			(Dollars in millions)			2023			2022

Gross realized gains	Gross realized gains	$	13	$	—				Gross realized gains		$	—		$	13
Gross realized losses	Gross realized losses	(82)		—					Gross realized losses		—			(82)

Securities gains (losses), net	Securities gains (losses), net	$	(69)	$	—				Securities gains (losses), net		$	—		$	(69)

12 Truist Financial Corporation 13

NOTE 5. Loans and ACL

In the first quarter of 2023, the Company adopted the Troubled Debt Restructurings and Vintage Disclosures accounting standard. Certain newly required disclosures in this footnote are presented as of and for the period ended March 31, 2023 only as the adoption of this guidance did not impact the prior periods. As such, disclosures were provided related to TDRs as of December 31, 2022 and for the three months ended March 31, 2022 under prior accounting standards. Refer to “Note 1. Basis of Presentation” for additional information.

The following tables present loans and leases HFI by aging category. Government guaranteed loans are not placed on 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
March 31, 2022 (Dollars in millions)		Current		30-89 Days Past Due		90 Days Or More Past Due (1)		Nonperforming		Total
March 31, 2023 (Dollars in millions)												March 31, 2023 (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	$	140,428	$	280	$	22	$	330	$	141,060	Commercial and industrial	$	166,663	$	125	$	35	$	394	$	167,217
CRE	CRE	22,734		13		—		27		22,774		CRE	22,519		34		—		117		22,670
Commercial construction	Commercial construction	5,219		1		—		—		5,220		Commercial construction	5,947		3		—		1		5,951

Consumer:	Consumer:											Consumer:
Residential mortgage	Residential mortgage	46,287		542		1,027		315		48,171		Residential mortgage	55,057		491		674		233		56,455
Residential home equity and direct		24,558		142		12		141		24,853
Home equity												Home equity	10,370		65		10		132		10,577
Indirect auto	Indirect auto	24,999		529		1		227		25,756		Indirect auto	26,498		511		—		270		27,279
Indirect other		10,972		65		2		4		11,043
Other consumer												Other consumer	27,523		164		10		45		27,742
Student	Student	5,210		482		822		—		6,514		Student	4,046		356		594		—		4,996
Credit card	Credit card	4,615		47		28		—		4,690		Credit card	4,692		56		38		—		4,786

Total	Total	$	285,022	$	2,101	$	1,914	$	1,044	$	290,081	Total	$	323,315	$	1,805	$	1,361	$	1,192	$	327,673
(1)Includes government guaranteed loans of $996 million in the residential mortgage portfolio and $818 million in the student portfolio.
(1)Includes government guaranteed loans of $649 million in the residential mortgage portfolio and $590 million in the student portfolio.												(1)Includes government guaranteed loans of $649 million in the residential mortgage portfolio and $590 million in the student portfolio.

		Accruing											Accruing
December 31, 2021 (Dollars in millions)		Current		30-89 Days Past Due		90 Days Or More Past Due (1)		Nonperforming		Total
December 31, 2022 (Dollars in millions)												December 31, 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	$	138,225	$	130	$	13	$	394	$	138,762	Commercial and industrial	$	163,604	$	256	$	49	$	398	$	164,307
CRE	CRE	23,902		20		—		29		23,951		CRE	22,568		25		1		82		22,676
Commercial construction	Commercial construction	4,962		2		—		7		4,971		Commercial construction	5,844		5		—		—		5,849

Consumer:	Consumer:											Consumer:
Residential mortgage	Residential mortgage	46,033		514		1,009		296		47,852		Residential mortgage	55,005		614		786		240		56,645
Residential home equity and direct		24,809		107		9		141		25,066
Home equity												Home equity	10,661		68		12		135		10,876
Indirect auto	Indirect auto	25,615		607		1		218		26,441		Indirect auto	27,015		646		1		289		27,951
Indirect other		10,811		64		3		5		10,883
Other consumer												Other consumer	27,289		187		13		44		27,533
Student	Student	5,357		555		868		—		6,780		Student	4,179		402		706		—		5,287
Credit card	Credit card	4,735		45		27		—		4,807		Credit card	4,766		64		37		—		4,867

Total	Total	$	284,449	$	2,044	$	1,930	$	1,090	$	289,513	Total	$	320,931	$	2,267	$	1,605	$	1,188	$	325,991
(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 $759 million in the residential mortgage portfolio and $702 million in the student portfolio.												(1)Includes government guaranteed loans of $759 million in the residential mortgage portfolio and $702 million in the student portfolio.

14 Truist Financial Corporation 13

The following tables present the amortized cost basis of loans by origination year and credit quality indicator:


March 31, 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
March 31, 2023 (Dollars in millions)																							March 31, 2023 (Dollars in millions)	Amortized Cost Basis by Origination Year													Revolving Credit				Loans Converted to Term				Other(1)
																								2023			2022		2021		2020		2019		Prior								Total
Commercial:	Commercial:																									Commercial:
Commercial and industrial:	Commercial and industrial:																						Commercial and industrial:
Pass	Pass	$	10,993	$	30,955	$	15,100	$	11,947	$	7,874	$	13,160	$	46,584	$	—		$	(65)	$	136,548	Pass	$	9,673		$	41,280	$	19,702	$	10,213	$	7,556	$	13,686			$	59,715			$	—			$	(217)			$	161,608
Special mention	Special mention	104		227		303		212		279		100		530		—			—		1,755		Special mention	56			585		357		113		83		137		643				—				—				1,974
Substandard	Substandard	98		334		361		375		238		256		765		—			—		2,427		Substandard	65			745		375		166		452		440		998				—				—				3,241
Nonperforming	Nonperforming	4		42		11		62		10		43		158		—			—		330		Nonperforming	1			55		50		41		22		57		168				—				—				394
Total	Total	11,199		31,558		15,775		12,596		8,401		13,559		48,037		—			(65)		141,060		Total	9,795			42,665		20,484		10,533		8,113		14,320		61,524				—				(217)				167,217
Gross charge-offs																							Gross charge-offs	—			9		15		1		3		15		32				—				—				75
CRE:	CRE:																						CRE:
Pass	Pass	971		4,396		2,744		4,951		3,093		3,405		882		—			(50)		20,392		Pass	1,042			5,649		3,269		2,302		3,426		3,902		834				—				(74)				20,350
Special mention	Special mention	9		37		93		140		164		99		—		—			—		542		Special mention	6			273		113		74		289		208		—				—				—				963
Substandard	Substandard	64		212		207		463		450		417		—		—			—		1,813		Substandard	38			223		47		33		526		372		1				—				—				1,240
Nonperforming	Nonperforming	1		1		1		11		1		12		—		—			—		27		Nonperforming	—			37		3		2		—		75		—				—				—				117
Total	Total	1,045		4,646		3,045		5,565		3,708		3,933		882		—			(50)		22,774		Total	1,086			6,182		3,432		2,411		4,241		4,557		835				—				(74)				22,670
Gross charge-offs																							Gross charge-offs	—			2		—		—		—		4		—				—				—				6
Commercial construction:	Commercial construction:																						Commercial construction:
Pass	Pass	417		1,219		1,124		896		346		164		832		—			—		4,998		Pass	219			1,628		1,618		636		219		157		1,021				—				—				5,498
Special mention	Special mention	4		—		14		66		—		—		—		—			—		84		Special mention	37			84		36		176		—		—		1				—				—				334
Substandard	Substandard	1		4		22		33		61		17		—		—			—		138		Substandard	1			39		6		19		—		53		—				—				—				118
Nonperforming	Nonperforming	—		—		—		—		—		—		—		—			—		—		Nonperforming	—			—		—		—		1		—		—				—				—				1
Total	Total	422		1,223		1,160		995		407		181		832		—			—		5,220		Total	257			1,751		1,660		831		220		210		1,022				—				—				5,951

Consumer:	Consumer:																						Consumer:
Residential mortgage:	Residential mortgage:																						Residential mortgage:

Current	Current	$	2,066	$	17,749	$	6,519	$	3,238	$	1,621	$	15,094	$	—	$	—		$	—	$	46,287	Current	649			13,827		17,194		6,076		3,037		14,274		—				—				—				55,057
30 - 89 days past due	30 - 89 days past due	10		66		43		35		35		353		—		—			—		542		30 - 89 days past due	2			33		57		25		29		345		—				—				—				491
90 days or more past due	90 days or more past due	1		4		52		93		128		749		—		—			—		1,027		90 days or more past due	—			11		29		50		56		528		—				—				—				674
Nonperforming	Nonperforming	—		4		7		21		27		256		—		—			—		315		Nonperforming	—			6		11		9		12		195		—				—				—				233
Total	Total	2,077		17,823		6,621		3,387		1,811		16,452		—		—			—		48,171		Total	651			13,877		17,291		6,160		3,134		15,342		—				—				—				56,455
Residential home equity and direct:
Gross charge-offs																							Gross charge-offs	—			—		1		—		—		—		—				—				—				1
Home equity:																							Home equity:

Current	Current	1,481		4,361		2,268		1,447		560		476		10,534		3,446			(15)		24,558		Current														6,506				3,864				—				10,370
30 - 89 days past due	30 - 89 days past due	1		12		8		9		3		4		67		38			—		142		30 - 89 days past due														44				21				—				65
90 days or more past due	90 days or more past due	—		1		—		—		—		—		6		5			—		12		90 days or more past due														6				4				—				10
Nonperforming	Nonperforming	—		3		3		4		1		7		42		81			—		141		Nonperforming														46				86				—				132
Total	Total	1,482		4,377		2,279		1,460		564		487		10,649		3,570			(15)		24,853		Total	—			—		—		—		—		—		6,602				3,975				—				10,577
Gross charge-offs																							Gross charge-offs	—			—		—		—		—		—		2				—				—				2
Indirect auto:	Indirect auto:																						Indirect auto:

Current																							Current	2,077			10,757		6,504		3,667		2,147		1,339		—				—				7				26,498
30 - 89 days past due																							30 - 89 days past due	6			147		130		82		70		76		—				—				—				511

Nonperforming																							Nonperforming	—			57		71		49		48		45		—				—				—				270
Total																							Total	2,083			10,961		6,705		3,798		2,265		1,460		—				—				7				27,279
Gross charge-offs																							Gross charge-offs	—			39		34		17		16		21		—				—				—				127
Other consumer:																							Other consumer:

Current	Current	2,369		9,794		5,938		3,775		1,860		1,263		—		—			—		24,999		Current	2,915			10,324		5,181		2,777		1,563		1,690		3,053				20				—				27,523
30 - 89 days past due	30 - 89 days past due	5		139		116		116		75		78		—		—			—		529		30 - 89 days past due	4			71		36		20		16		12		4				1				—				164
90 days or more past due	90 days or more past due	—		1		—		—		—		—		—		—			—		1		90 days or more past due	—			8		1		—		—		—		1				—				—				10
Nonperforming	Nonperforming	—		42		51		60		39		35		—		—			—		227		Nonperforming	—			4		15		10		6		9		—				1				—				45
Total	Total	2,374		9,976		6,105		3,951		1,974		1,376		—		—			—		25,756		Total	2,919			10,407		5,233		2,807		1,585		1,711		3,058				22				—				27,742
Indirect other:

Current		1,433		3,869		2,405		1,424		812		1,029		—		—			—		10,972
30 - 89 days past due		2		18		16		13		8		8		—		—			—		65
90 days or more past due		—		1		1		—		—		—		—		—			—		2
Nonperforming		—		—		—		3		—		1		—		—			—		4
Total		1,435		3,888		2,422		1,440		820		1,038		—		—			—		11,043
Gross charge-offs																							Gross charge-offs	—			45		25		14		10		5		6				—				—				105
Student:	Student:																						Student:
Current	Current	—		—		20		82		66		5,041		—		—			1		5,210		Current	—			—		—		16		66		3,964		—				—				—				4,046
30 - 89 days past due	30 - 89 days past due	—		—		—		—		1		481		—		—			—		482		30 - 89 days past due	—			—		—		—		1		355		—				—				—				356
90 days or more past due	90 days or more past due	—		—		—		—		1		821		—		—			—		822		90 days or more past due	—			—		—		—		1		593		—				—				—				594

Total	Total	—		—		20		82		68		6,343		—		—			1		6,514		Total	—			—		—		16		68		4,912		—				—				—				4,996
Gross charge-offs																							Gross charge-offs	—			—		—		—		—		5		—				—				—				5
Credit card:	Credit card:																						Credit card:
Current	Current	0		0		0		0		0		0		4,591		21			3		4,615		Current														4,675				17				—				4,692
30 - 89 days past due	30 - 89 days past due	0		0		0		0		0		0		45		2			—		47		30 - 89 days past due														54				2				—				56
90 days or more past due	90 days or more past due	0		0		0		0		0		0		27		1			—		28		90 days or more past due														36				2				—				38

Total	Total	—		—		—		—		—		—		4,663		24			3		4,690		Total	—			—		—		—		—		—		4,765				21				—				4,786
Gross charge-offs																							Gross charge-offs	—			—		—		—		—		—		50				1				—				51
Total	Total	$	20,034	$	73,491	$	37,427	$	29,476	$	17,753	$	43,369	$	65,063	$	3,594		$	(126)	$	290,081	Total	$	16,791		$	85,843	$	54,805	$	26,556	$	19,626	$	42,512	$	77,806			$	4,018			$	(284)			$	327,673
Gross charge-offs																							Gross charge-offs	$	—		$	95	$	75	$	32	$	29	$	50	$	90			$	1			$	—			$	372

14 Truist Financial Corporation 15


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
December 31, 2022 (Dollars in millions)																									December 31, 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:																								Commercial:
Commercial and industrial:	Commercial and industrial:																								Commercial and industrial:
Pass	Pass	$	35,530	$	17,430	$	14,105	$	8,994	$	5,633	$	9,424			$	43,035				$	—	$	(169)	$	133,982			Pass	$	45,890	$	21,642	$	11,219	$	8,258	$	4,977			$	9,686				$	57,854	$	—	$	(199)	$	159,327
Special mention	Special mention	195		221		326		317		46		70		691				—			—		1,866		Special mention		243			302		143		160		61		88		721				—			—		1,718
Substandard	Substandard	352		356		395		197		91		335		794				—			—		2,520		Substandard		518			387		113		413		249		187		997				—			—		2,864
Nonperforming	Nonperforming	50		19		49		42		16		34		184				—			—		394		Nonperforming		47			53		10		28		46		27		187				—			—		398
Total	Total	36,127		18,026		14,875		9,550		5,786		9,863		44,704				—			(169)		138,762		Total		46,698			22,384		11,485		8,859		5,333		9,988		59,759				—			(199)		164,307
CRE:	CRE:																								CRE:
Pass	Pass	4,836		2,946		5,109		3,201		1,774		2,131		762				—			(61)		20,698		Pass		6,141			3,595		2,220		3,846		2,092		2,265		757				—			(70)		20,846
Special mention	Special mention	13		118		483		247		44		83		—				—			—		988		Special mention		106			118		74		229		281		5		18				—			—		831
Substandard	Substandard	321		264		523		528		321		279		—				—			—		2,236		Substandard		106			99		35		422		121		134		—				—			—		917
Nonperforming	Nonperforming	1		1		11		—		9		7		—				—			—		29		Nonperforming		—			3		—		—		77		2		—				—			—		82
Total	Total	5,171		3,329		6,126		3,976		2,148		2,500		762				—			(61)		23,951		Total		6,353			3,815		2,329		4,497		2,571		2,406		775				—			(70)		22,676
Commercial construction:	Commercial construction:																								Commercial construction:
Pass	Pass	1,113		1,179		1,259		419		44		95		558				—			12		4,679		Pass		1,501			1,500		825		290		212		71		1,056				—			—		5,455
Special mention	Special mention	—		14		72		50		—		—		—				—			—		136		Special mention		80			—		93		—		—		—		35				—			—		208
Substandard	Substandard	7		13		45		67		17		—		—				—			—		149		Substandard		114			—		18		1		53		—		—				—			—		186
Nonperforming		—		—		1		��		5		—		—				—			1		7

Total	Total	1,120		1,206		1,377		536		66		95		558				—			13		4,971		Total		1,695			1,500		936		291		265		71		1,091				—			—		5,849

Consumer:	Consumer:																								Consumer:
Residential mortgage:	Residential mortgage:																								Residential mortgage:

Current	Current	17,271		6,798		3,642		1,753		2,237		14,240		—				—			92		46,033		Current		13,824			17,340		6,167		3,084		1,384		13,206		—				—			—		55,005
30 - 89 days past due	30 - 89 days past due	58		31		32		40		31		322		—				—			—		514		30 - 89 days past due		55			61		32		37		43		386		—				—			—		614
90 or more days past due	90 or more days past due	3		44		91		133		95		643		—				—			—		1,009		90 or more days past due		5			31		62		62		91		535		—				—			—		786
Nonperforming	Nonperforming	1		5		18		27		20		226		—				—			(1)		296		Nonperforming		4			6		10		12		17		191		—				—			—		240
Total	Total	17,333		6,878		3,783		1,953		2,383		15,431		—				—			91		47,852		Total		13,888			17,438		6,271		3,195		1,535		14,318		—				—			—		56,645
Residential home equity and direct:
Home equity:																									Home equity:

Current	Current	4,962		2,630		1,717		691		189		425		10,757				3,388			50		24,809		Current															6,843				3,818			—		10,661
30 - 89 days past due	30 - 89 days past due	8		8		10		3		1		3		53				21			—		107		30 - 89 days past due															48				20			—		68
90 days or more past due	90 days or more past due	—		—		—		—		—		—		5				4			—		9		90 days or more past due															9				3			—		12
Nonperforming	Nonperforming	2		3		4		1		—		7		48				75			1		141		Nonperforming															44				91			—		135
Total	Total	4,972		2,641		1,731		695		190		435		10,863				3,488			51		25,066		Total		—			—		—		—		—		—		6,944				3,932			—		10,876
Indirect auto:	Indirect auto:																								Indirect auto:

Current	Current	10,699		6,691		4,293		2,158		1,081		504		—				—			189		25,615		Current		11,646			7,141		4,105		2,461		1,096		559		—				—			7		27,015
30 - 89 days past due	30 - 89 days past due	119		138		145		97		56		52		—				—			—		607		30 - 89 days past due		147			174		111		100		60		54		—				—			—		646
90 days or more past due	90 days or more past due	—		—		—		—		—		1		—				—			—		1		90 days or more past due		1			—		—		—		—		—		—				—			—		1
Nonperforming	Nonperforming	28		48		61		41		21		19		—				—			—		218		Nonperforming		41			77		56		56		34		25		—				—			—		289
Total	Total	10,846		6,877		4,499		2,296		1,158		576		—				—			189		26,441		Total		11,835			7,392		4,272		2,617		1,190		638		—				—			7		27,951
Indirect other:
Other consumer:																									Other consumer:

Current	Current	4,333		2,724		1,638		937		455		691		—				—			33		10,811		Current		11,270			5,805		3,167		1,814		865		1,061		3,278				29			—		27,289
30 - 89 days past due	30 - 89 days past due	14		15		15		12		4		4		—				—			—		64		30 - 89 days past due		68			44		26		20		10		7		10				2			—		187
90 days or more past due	90 days or more past due	1		1		1		—		—		—		—				—			—		3		90 days or more past due		8			1		1		1		—		—		2				—			—		13
Nonperforming	Nonperforming	1		1		1		—		—		2		—				—			—		5		Nonperforming		4			11		8		9		2		8		2				—			—		44
Total	Total	4,349		2,741		1,655		949		459		697		—				—			33		10,883		Total		11,350			5,861		3,202		1,844		877		1,076		3,292				31			—		27,533
Student:	Student:																								Student:
Current	Current	—		21		88		73		61		5,122		—				—			(8)		5,357		Current		—			—		17		71		57		4,034		—				—			—		4,179
30 - 89 days past due	30 - 89 days past due	—		—		1		1		1		552		—				—			—		555		30 - 89 days past due		—			—		—		1		1		400		—				—			—		402
90 days or more past due	90 days or more past due	—		—		—		—		1		867		—				—			—		868		90 days or more past due		—			—		—		1		1		704		—				—			—		706

Total	Total	—		21		89		74		63		6,541		—				—			(8)		6,780		Total		—			—		17		73		59		5,138		—				—			—		5,287
Credit card:	Credit card:																								Credit card:
Current	Current	0		0		0		0		0		0		4,711				24			—		4,735		Current															4,750				16			—		4,766
30 - 89 days past due	30 - 89 days past due	0		0		0		0		0		0		43				2			—		45		30 - 89 days past due															63				1			—		64
90 days or more past due	90 days or more past due	0		0		0		0		0		0		26				1			—		27		90 days or more past due															36				1			—		37

Total	Total	—		—		—		—		—		—		4,780				27			—		4,807		Total		—			—		—		—		—		—		4,849				18			—		4,867
Total	Total	$	79,918	$	41,719	$	34,135	$	20,029	$	12,253	$	36,138	$	61,667			$	3,515		$	139	$	289,513	Total		$	91,819		$	58,390	$	28,512	$	21,376	$	11,830	$	33,635	$	76,710			$	3,981		$	(262)	$	325,991

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

16 Truist Financial Corporation 15

ACL

The following tables present activity in the ACL:


(Dollars in millions)	Balance at Jan 1, 2021		Charge-Offs		Recoveries		Provision (Benefit)		Other (1)		Balance at Mar 31, 2021
Commercial:
Commercial and industrial	$	2,204	$	(79)	$	19	$	(8)	$	—	$	2,136
CRE	573		(4)		1		(26)		—		544
Commercial construction	81		(2)		1		(3)		—		77

Consumer:
Residential mortgage	368		(11)		2		(16)		—		343
Residential home equity and direct	714		(55)		18		30		—		707
Indirect auto	1,198		(105)		22		61		—		1,176
Indirect other	208		(17)		6		(10)		—		187
Student	130		(3)		—		2		2		131
Credit card	359		(40)		9		33		—		361

ALLL	5,835		(316)		78		63		2		5,662
RUFC	364		—		—		(15)		—		349
ACL	$	6,199	$	(316)	$	78	$	48	$	2	$	6,011

(Dollars in millions)	Balance at Jan 1, 2022		Charge-Offs		Recoveries		Provision (Benefit)		Other (1)		Balance at Mar 31, 2022
Commercial:
Commercial and industrial	$	1,426	$	(31)	$	17	$	(93)	$	—	$	1,319
CRE	350		(1)		1		(67)		—		283
Commercial construction	52		(1)		1		1		—		53

Consumer:
Residential mortgage	308		(2)		6		(2)		—		310
Residential home equity and direct	615		(58)		20		(3)		—		574
Indirect auto	1,022		(102)		23		14		—		957
Indirect other	195		(19)		6		29		—		211
Student	117		(6)		—		3		1		115
Credit card	350		(41)		9		30		—		348

ALLL	4,435		(261)		83		(88)		1		4,170
RUFC	260		—		—		(7)		—		253
ACL	$	4,695	$	(261)	$	83	$	(95)	$	1	$	4,423

(Dollars in millions)													(Dollars in millions)	Balance at Jan 1, 2022		Charge-Offs		Recoveries		Provision (Benefit)		Other(1)		Balance at Mar 31, 2022
Commercial:													Commercial:
Commercial and industrial													Commercial and industrial	$	1,426	$	(31)	$	17	$	(93)	$	—	$	1,319
CRE													CRE	350		(1)		1		(67)		—		283
Commercial construction													Commercial construction	52		(1)		1		1		—		53

Consumer:													Consumer:
Residential mortgage													Residential mortgage	308		(2)		6		(2)		—		310
Home equity													Home equity	96		(1)		5		(12)		—		88
Indirect auto													Indirect auto	1,022		(102)		23		14		—		957
Other consumer													Other consumer	714		(76)		21		38		—		697
Student													Student	117		(6)		—		3		1		115
Credit card													Credit card	350		(41)		9		30		—		348

ALLL													ALLL	4,435		(261)		83		(88)		1		4,170
RUFC													RUFC	260		—		—		(7)		—		253
ACL													ACL	$	4,695	$	(261)	$	83	$	(95)	$	1	$	4,423

(Dollars in millions)													(Dollars in millions)	Balance at Jan 1, 2023		Charge-Offs		Recoveries		Provision (Benefit)		Other(1)		Balance at Mar 31, 2023
Commercial:													Commercial:
Commercial and industrial													Commercial and industrial	$	1,409	$	(75)	$	13	$	151	$	(1)	$	1,497
CRE													CRE	224		(6)		1		32		—		251
Commercial construction													Commercial construction	46		—		1		40		—		87

Consumer:													Consumer:
Residential mortgage													Residential mortgage	399		(1)		2		13		(81)		332
Home equity													Home equity	90		(2)		6		(7)		—		87
Indirect auto													Indirect auto	981		(127)		26		100		13		993
Other consumer													Other consumer	770		(105)		17		98		(1)		779
Student													Student	98		(5)		—		5		—		98
Credit card													Credit card	360		(51)		9		40		(3)		355

ALLL													ALLL	4,377		(372)		75		472		(73)		4,479
RUFC													RUFC	272		—		—		10		—		282
ACL													ACL	$	4,649	$	(372)	$	75	$	482	$	(73)	$	4,761

(1)Includes the amounts for the ALLL for PCD acquisitions, the impact of adopting the Troubled Debt Restructurings and Vintage Disclosures accounting standard, and other activity.

The commercial ALLL ~~decreased $173~~increased $156 million and the consumer ALLL decreased ~~$90~~$49 million for the three months ended March 31, ~~2022.~~2023. The increase in the commercial ALLL primarily reflects loan growth and increased economic uncertainty. The decrease ~~reflects a continued favorable credit environment tempered~~in the consumer ALLL was primarily driven by the impact of the Troubled Debt Restructurings and Vintage Disclosures accounting standard, under which reasonable expectations of TDRs are no longer considered, partially offset by increased economic uncertainty. Considerations for the increased economic uncertainty include the potential impacts related to the risks associated with inflation, ~~supply chain disruption,~~ rising rates, geopolitical events, and ~~geopolitical events.~~

~~The RUFC decreased $7 million for the three months ended March 31, 2022. The decrease reflects a continued favorable credit environment.~~recession.

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, USU.S. 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 March 31, ~~2022~~2023 ACL, unchanged since December 31, ~~2021.~~2022. While the scenario weightings were unchanged, each forecast scenario reflected 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 March 31, ~~2022~~2023 included GDP growth in the ~~mid-single digits followed by a decline to the~~ low-single digits ~~through the end of 2022~~ and an unemployment rate ~~starting in the low-single digits with improvement through the end of the reasonable and supportable period.~~near mid-single digits.

16 Truist Financial Corporation 17

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 March 31, ~~2022~~2023 ACL estimate includes adjustments to consider the impact of current and expected events or risks not captured by the loss forecasting models, the outcomes of which are uncertain and may not be completely considered by quantitative models. Refer to “Note 1. Basis of Presentation” in Truist’s Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 for additional information.

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 three months ended March 31, 2022 and 2021, respectively.~~LHFS:


		March 31, 2022				December 31, 2021										March 31, 2023						December 31, 2022
		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	$	139	$	191	$	125	$	269					Commercial and industrial		$	68		$	326		$	120		$	278
CRE	CRE	18		9		12		17						CRE		11			106			75			7
Commercial construction	Commercial construction	—		—		—		7						Commercial construction		—			1			—			—

Consumer:	Consumer:													Consumer:
Residential mortgage	Residential mortgage	5		310		4		292						Residential mortgage		—			233			4			236
Residential home equity and direct		3		138		3		138
Home equity													Home equity		1			131			2			171
Indirect auto	Indirect auto	3		224		1		217						Indirect auto		—			270			3			286
Indirect other		—		4		—		5
Other consumer													Other consumer		—			45			—			6

Total	Total	$	168	$	876	$	145	$	945					Total		$	80		$	1,112		$	204		$	984

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)	Mar 31, 2022		Dec 31, 2021		(Dollars in millions)	Mar 31, 2023		Dec 31, 2022
Nonperforming loans and leases HFI						Nonperforming loans and leases HFI	$	1,192	$	1,188

Nonperforming loans and leases HFI		$	1,044	$	1,090
Nonperforming LHFS		39		22
Foreclosed real estate	Foreclosed real estate	3		8		Foreclosed real estate	3		4
Other foreclosed property	Other foreclosed property	49		43		Other foreclosed property	66		58
Total nonperforming assets	Total nonperforming assets	$	1,135	$	1,163	Total nonperforming assets	$	1,261	$	1,250

Residential mortgage loans in the process of foreclosure	Residential mortgage loans in the process of foreclosure	$	208	$	135	Residential mortgage loans in the process of foreclosure	$	226	$	248

Loan Modifications

The following table summarizes the period-end amortized cost basis of loans to borrowers experiencing financial difficulty that were modified during the period, disaggregated by class of financing receivable and type of modification granted. This table includes modification activity that occurred on or after January 1, 2023. The volume of payment delay modifications is expected to increase throughout 2023 as the cumulative period over which such modifications are evaluated gradually extends to a full 12-month rolling period:


March 31, 2023 (Dollars in millions)	Renewals		Term Extensions		Capitalizations		Payment Delays		Combination - Interest Rate Reduction and Term Extension		Combination - Capitalization and Term Extension		Combination - Capitalization, Interest Rate and Term Extension		Other		Total Modified Loans		Percentage of Total Class of Financing Receivable
Commercial:
Commercial and industrial	$	390	$	51	$	—	$	—	$	—	$	—	$	—	$	—	$	441	0.26	%
CRE	103		—		—		71		—		—		—		—		174		0.77
Commercial construction	1		—		—		—		—		—		—		—		1		0.02
Consumer:
Residential mortgage	—		29		32		25		1		92		20		4		203		0.36
Home equity	—		—		—		—		2		—		—		1		3		0.03
Indirect auto	—		5		—		5		5		—		—		6		21		0.08
Other consumer	—		5		—		—		1		—		—		1		7		0.03

Credit card	—		—		—		—		—		—		—		5		5		0.10
Total	$	494	$	90	$	32	$	101	$	9	$	92	$	20	$	17	$	855	0.26

18 Truist Financial Corporation

The table above excludes trial modifications totaling $64 million as of March 31, 2023. Such modifications will be included in the modification activity disclosure if the borrower successfully completes the trial period and the loan modification is finalized.

As of March 31, 2023, Truist had $353 million in unfunded lending commitments related to the modified obligations summarized in the table above.

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty:

For the Three Months Ended March 31, 2023

Loan Type

Financial Effect

Renewals

Commercial and industrial

Extended weighted average term by 4 months and increased the weighted average interest rate by 0.4%.

CRE

Extended weighted average term by 9 months and increased the weighted average interest rate by 0.1%.

Commercial construction

Extended weighted average term by 5 months.

Term Extensions

Commercial and industrial

Extended weighted average term by 3 months.

Residential mortgage

Extended weighted average term by 158 months.

Indirect auto

Extended weighted average term by 25 months.

Other Consumer

Extended weighted average term by 25 months.

Capitalizations

Residential mortgage

Capitalized $19 thousand on a weighted average basis into the outstanding balance of the loan.

Payment Delays

CRE

Provided 233 days of payment deferral on a weighted average basis.

Residential mortgage

Provided 195 days of payment deferral on a weighted average basis.

Indirect auto

Provided 129 days of payment deferral on a weighted average basis.

Combination - Interest Rate Adjustment and Term Extension

Residential mortgage

Extended weighted average term by 97 months and decreased the weighted average interest rate by 0.8%.

Home equity

Extended weighted average term by 318 months and decreased the weighted average interest rate by 2.3%.

Indirect auto

Extended weighted average term by 11 months and decreased the weighted average interest rate by 7%.

Other consumer

Extended weighted average term by 101 months and decreased the weighted average interest rate by 3%.

Combination - Capitalization and Term Extension

Residential mortgage

Extended weighted average term by 111 months and capitalized $31 thousand on a weighted average basis into the outstanding loan balance.

Combination - Capitalization, Interest Rate and Term Extension

Residential mortgage

Extended weighted average term by 82 months, decreased weighted average interest rate by 0.3% and capitalized $23 thousand on a weighted average basis into the outstanding loan balance.

Upon Truist’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.

Truist Financial Corporation 19

Truist closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table summarizes the delinquency status of loans that were modified during the quarter:


	Payment Status (Amortized Cost Basis)
March 31, 2023 (Dollars in millions)	Current		30-89 Days Past Due		90 Days or More Past Due		Total
Commercial:
Commercial and industrial	$	406	$	1	$	34	$	441
CRE	174		—		—		174
Commercial construction	1		—		—		1
Consumer:
Residential mortgage	153		33		17		203
Home equity	3		—		—		3
Indirect auto	19		1		1		21
Other consumer	7		—		—		7

Credit card	3		1		1		5
Total	$	766	$	36	$	53	$	855
Total nonaccrual loans included above	$	131	$	10	$	39	$	180

The following table provides the amortized cost basis of financing receivables that were modified during the quarter that were in payment default:


March 31, 2023 (Dollars in millions)	Renewals		Term Extensions		Capitalizations		Payment Delays		Combination - Capitalization and Term Extension		Combination - Capitalization, Interest Rate and Term Extension		Other		Total
Commercial:
Commercial and industrial	$	34	$	—	$	—	$	—	$	—	$	—	$	—	34


Consumer:
Residential mortgage	—		2		1		5		6		2		1		17

Indirect auto	—		—		—		—		—		—		1		1


Credit card	—		—		—		—		—		—		1		1
Total	$	34	$	2	$	1	$	5	$	6	$	2	$	3	$	53

TDRs

The following table presents a summary of TDRs:
(Dollars in millions) Mar 31, 2022 Dec 31, 2021
Performing TDRs:
Commercial:
Commercial and industrial $ 104 $ 147
CRE 5 5
Commercial construction 1 —
Consumer:
Residential mortgage 866 692
Residential home equity and direct 91 98
Indirect auto 392 389
Indirect other 6 7
Student 25 25
Credit card 25 27
Total performing TDRs 1,515 1,390
Nonperforming TDRs 189 152
Total TDRs $ 1,704 $ 1,542
ALLL attributable to TDRs $ 87 $ 102


(Dollars in millions)	Dec 31, 2022
Performing TDRs:
Commercial:
Commercial and industrial	$	136
CRE	5
Commercial construction	1

Consumer:
Residential mortgage	1,252
Home equity	51
Indirect auto	462
Other consumer	31
Student	30
Credit card	18
Total performing TDRs	1,986
Nonperforming TDRs	214
Total TDRs	$	2,200
ALLL attributable to TDRs	$	152

~~Truist Financial Corporation 17~~

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 March 31, 2022
(Dollars in millions) Type of Modification Prior Quarter Loan Balance ALLL at Period End
Rate Structure
Newly designated TDRs:
Commercial $ — $ 8 $ 10 $ —
Consumer 148 191 329 15
Credit card 2 — 2 1
Re-modification of previously designated TDRs 21 11
As of / For the Three Months Ended March 31, 2021
Type of Modification Prior Quarter Loan Balance ALLL at Period End
(Dollars in millions) Rate Structure
Newly designated TDRs:
Commercial $ 27 $ 103 $ 147 $ 13
Consumer 75 155 233 13
Credit card 4 — 4 2
Re-modification of previously designated TDRs 14 14

20 Truist Financial Corporation

Charge-offs and forgiveness of principal and interest for TDRs were immaterial for all periods presented. The amount of modified loans that were classified as TDRs during the previous 12 months and experienced a payment default for three months ended March 31, 2022 and 2021 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 March 31, 2022
		Type of Modification			Prior Quarter Loan Balance		Related ALLL at Period End
(Dollars in millions)		Rate	Structure
Newly designated TDRs:
Commercial			$	—	$	8	$	10	$	—




Consumer			148		191		329		15





Credit card			2		—		2		1
Re-modification of previously designated TDRs			21		11

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)	Mar 31, 2022		Dec 31, 2021		(Dollars in millions)	Mar 31, 2023		Dec 31, 2022

Unearned income, discounts, and net deferred loan fees and costs	Unearned income, discounts, and net deferred loan fees and costs	$	537	$	849	Unearned income, discounts, and net deferred loan fees and costs	$	299	$	269

~~18 Truist Financial Corporation~~

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, ~~2021 quantitative~~2022 qualitative impairment ~~test, concluding~~test. Truist concluded 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 March 31, ~~2022,~~2023, and therefore no triggering event occurred that required a quantitative goodwill impairment test. Refer to “Note 1. Basis of Presentation” in Truist’s Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 for additional information.

The changes in the carrying amount of goodwill attributable to operating segments are reflected in the table below. Activity during 2023 relates to the reorganization of Prime Rate Premium Finance Corporation. Activity during 2022 reflects the acquisition of BankDirect Capital Finance, 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~~2022 for additional information on the acquisitions and “Note 18. Operating Segments” for additional information on segments.
(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 — — 187 187
Adjustments and other (1) — — (1)
Goodwill, March 31, 2022 $ 16,869 $ 6,149 $ 3,266 $ 26,284



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



Goodwill, January 1, 2022	$	16,870	$	6,149	$	3,079	$	26,098
Mergers and acquisitions	—		—		912		912
Adjustments and other	(5)		5		3		3
Goodwill, December 31, 2022	16,865		6,154		3,994		27,013

Adjustments and other	—		216		(215)		1
Goodwill, March 31, 2023	$	16,865	$	6,370	$	3,779	$	27,014

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


			March 31, 2022									December 31, 2021										March 31, 2023						December 31, 2022
(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		$	(1,267)		$	1,296		$	2,563		$	(1,190)		$	1,373		CDI	$	2,473	$	(1,465)	$	1,008	$	2,473	$	(1,403)	$	1,070
Other, primarily client relationship intangibles	Other, primarily client relationship intangibles		3,531			(1,134)			2,397			3,116			(1,081)			2,035			Other, primarily client relationship intangibles	3,802		(1,275)		2,527		3,812		(1,210)		2,602
Total	Total		$	6,094		$	(2,401)		$	3,693		$	5,679		$	(2,271)		$	3,408		Total	$	6,275	$	(2,740)	$	3,535	$	6,285	$	(2,613)	$	3,672

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 relations, including relations 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 economic benefits received.

Truist Financial Corporation 1921

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 other consumer loans. Servicing rights are capitalized by the Company as Loan servicing rights on the Consolidated Balance Sheets. Income earned by the Company on its 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)	(Dollars in millions)	Mar 31, 2022			Dec 31, 2021			(Dollars in millions)	Mar 31, 2023			Dec 31, 2022
UPB of residential mortgage loan servicing portfolio	UPB of residential mortgage loan servicing portfolio	$	246,664		$	246,727		UPB of residential mortgage loan servicing portfolio	$	272,323		$	274,028
UPB of residential mortgage loans serviced for others, primarily agency conforming fixed rate	UPB of residential mortgage loans serviced for others, primarily agency conforming fixed rate	195,737			196,011			UPB of residential mortgage loans serviced for others, primarily agency conforming fixed rate	214,830			217,046
Mortgage loans sold with recourse	Mortgage loans sold with recourse	221			244			Mortgage loans sold with recourse	200			200
Maximum recourse exposure from mortgage loans sold with recourse liability	Maximum recourse exposure from mortgage loans sold with recourse liability	137			155			Maximum recourse exposure from mortgage loans sold with recourse liability	128			127
Indemnification, recourse and repurchase reserves	Indemnification, recourse and repurchase reserves	73			74			Indemnification, recourse and repurchase reserves	55			56

As of / For the Three Months Ended March 31, (Dollars in millions)	As of / For the Three Months Ended March 31, (Dollars in millions)	2022			2021			As of / For the Three Months Ended March 31, (Dollars in millions)	2023			2022
UPB of residential mortgage loans sold from LHFS	UPB of residential mortgage loans sold from LHFS	$	8,818		$	9,489		UPB of residential mortgage loans sold from LHFS	$	2,507		$	8,818
Pre-tax gains recognized on mortgage loans sold and held for sale	Pre-tax gains recognized on mortgage loans sold and held for sale	39			119			Pre-tax gains recognized on mortgage loans sold and held for sale	16			39
Servicing fees recognized from mortgage loans serviced for others	Servicing fees recognized from mortgage loans serviced for others	145			141			Servicing fees recognized from mortgage loans serviced for others	163			145
Approximate weighted average servicing fee on the outstanding balance of residential mortgage loans serviced for others	Approximate weighted average servicing fee on the outstanding balance of residential mortgage loans serviced for others	0.31		%	0.31		%	Approximate weighted average servicing fee on the outstanding balance of residential mortgage loans serviced for others	0.27		%	0.31		%
Weighted average interest rate on mortgage loans serviced for others	Weighted average interest rate on mortgage loans serviced for others	3.41			3.76			Weighted average interest rate on mortgage loans serviced for others	3.52			3.41

The following table presents a roll forward of the carrying value of residential MSRs recorded at fair value:
Three Months Ended March 31,
(Dollars in millions) 2022 2021
Residential MSRs, carrying value, January 1 $ 2,305 $ 1,778
Additions 147 174
Change in fair value due to changes in valuation inputs or assumptions:
Prepayment speeds 376 219
OAS (26) 141
Realization of expected net servicing cash flows, passage of time and other (110) (209)
Residential MSRs, carrying value, March 31 $ 2,692 $ 2,103



Three Months Ended March 31,
(Dollars in millions)	2023		2022
Residential MSRs, carrying value, January 1	$	3,428	$	2,305

Additions	44		147
Sales	(428)		—
Change in fair value due to changes in valuation inputs or assumptions(1)	(1)		350


Realization of expected net servicing cash flows, passage of time, and other	(57)		(110)
Residential MSRs, carrying value, March 31	$	2,986	$	2,692

(1)The first quarter of 2023 includes realized gains on the portfolio sale of excess servicing.

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


		March 31, 2022									December 31, 2021												March 31, 2023														December 31, 2022
		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	10.0	%	12.8	%				11.1	%			11.4	%			15.3	%					13.8		%	Prepayment speed	7.7		%			14.0		%		8.3		%		8.6		%		12.5		%		9.0	%
Effect on fair value of a 10% increase	Effect on fair value of a 10% increase					$	(104)												$	(113)		Effect on fair value of a 10% increase												$	(87)											$	(110)
Effect on fair value of a 20% increase	Effect on fair value of a 20% increase					(199)													(216)			Effect on fair value of a 20% increase											(167)												(211)
OAS	OAS	1.2	%	11.2	%	4.3		%			1.5	%			10.7	%			4.2		%	OAS	1.7		%			12.1		%			4.6		%		1.2		%		11.4		%		4.0		%
Effect on fair value of a 10% increase	Effect on fair value of a 10% increase					$	(44)												$	(37)		Effect on fair value of a 10% increase											$	(57)											$	(55)
Effect on fair value of a 20% increase	Effect on fair value of a 20% increase					(87)													(73)			Effect on fair value of a 20% increase											(111)												(108)
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					99.3		%											99.3		%	Fixed-rate residential mortgage loans											99.5		%										99.5		%
Adjustable-rate residential mortgage loans	Adjustable-rate residential mortgage loans					0.7													0.7			Adjustable-rate residential mortgage loans											0.5												0.5
Total	Total					100.0		%											100.0		%	Total											100.0		%										100.0		%
Weighted average life	Weighted average life					6.0 years													5.2 years			Weighted average life											7.1 years												6.8 years

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.

2022 Truist Financial Corporation

Commercial Mortgage Activities

The following table summarizes commercial mortgage servicing activities:
As of/Year-to-Date Ended
(Dollars in millions) Mar 31, 2022 Dec 31, 2021
UPB of CRE mortgages serviced for others $ 37,397 $ 37,960
CRE mortgages serviced for others covered by recourse provisions 9,938 10,243
Maximum recourse exposure from CRE mortgages sold with recourse liability 2,861 2,958
Recorded reserves related to recourse exposure 15 16
CRE mortgages originated during the year-to-date period 1,557 9,380
Commercial MSRs at fair value 280 280

~~Other Servicing Activities~~

~~The Company had $41 million and $48 million of other loan servicing rights at fair value as of March 31, 2022 and December 31, 2021, respectively.~~



(Dollars in millions)	Mar 31, 2023		Dec 31, 2022
UPB of CRE mortgages serviced for others	$	36,245	$	36,622
CRE mortgages serviced for others covered by recourse provisions	9,829		9,955
Maximum recourse exposure from CRE mortgages sold with recourse liability	2,820		2,861
Recorded reserves related to recourse exposure	16		17
CRE mortgages originated during the year-to-date period	1,041		7,779
Commercial MSRs at fair value	291		301

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:


	March 31, 2022						December 31, 2021
(Dollars in millions)	Operating Leases			Finance Leases			Operating Leases			Finance Leases
ROU assets	$	1,126		$	22		$	1,168		$	22
Lease liabilities	1,529			26			1,600			26
Weighted average remaining term	6.5 years			6.2 years			6.6 years			6.4 years
Weighted average discount rate	2.3		%	3.4		%	2.3		%	3.5		%

														March 31, 2023						December 31, 2022

(Dollars in millions)													(Dollars in millions)	Operating Leases			Finance Leases			Operating Leases			Finance Leases
ROU assets													ROU assets	$	1,151		$	19		$	1,193		$	20

Total lease liabilities													Total lease liabilities	1,498			22			1,545			23
Weighted average remaining term													Weighted average remaining term	6.4 years			5.4 years			6.6 years			5.6 years
Weighted average discount rate													Weighted average discount rate	2.8		%	3.4		%	2.7		%	3.4		%


		Three Months Ended March 31,					Three Months Ended March 31,
(Dollars in millions)	(Dollars in millions)		2022		2021			(Dollars in millions)	2023		2022

Operating lease costs	Operating lease costs		$	85	$	85		Operating lease costs	$	82	$	85

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)	Mar 31, 2022		Dec 31, 2021		(Dollars in millions)	Mar 31, 2023		Dec 31, 2022

Assets held under operating leases (1)	Assets held under operating leases (1)	$	2,034	$	2,110	Assets held under operating leases(1)	$	2,090	$	2,090

Accumulated depreciation	Accumulated depreciation	(524)		(539)		Accumulated depreciation	(554)		(550)
Net	Net	$	1,510	$	1,571	Net	$	1,536	$	1,540

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

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 ~~$7.5~~$7.7 billion at March 31, ~~2022~~2023 and ~~$7.3~~$7.6 billion at December 31, ~~2021.~~2022.

Truist Financial Corporation 2123

NOTE 9. Borrowings

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


(Dollars in millions)	(Dollars in millions)	Mar 31, 2022		Dec 31, 2021	(Dollars in millions)		Mar 31, 2023		Dec 31, 2022

FHLB advances								FHLB advances		$	18,900	$	18,900
Securities sold under agreements to repurchase	Securities sold under agreements to repurchase	$	2,367		$	2,435		Securities sold under agreements to repurchase		2,122		2,128

Securities sold short								Securities sold short		1,789		1,551
Collateral in excess of derivative exposures	Collateral in excess of derivative exposures	380			318			Collateral in excess of derivative exposures		455		403
Master notes	Master notes	683			808			Master notes		310		370
Securities sold short		1,717			1,731

Other short-term borrowings								Other short-term borrowings		102		70
Total short-term borrowings	Total short-term borrowings	$	5,147		$	5,292		Total short-term borrowings		$	23,678	$	23,422

The following table presents a summary of long-term debt:
(Dollars in millions) Mar 31, 2022 Dec 31, 2021
Truist Financial Corporation:
Fixed rate senior notes (1) $ 12,038 $ 13,271
Floating rate senior notes (1) 999 1,348
Fixed rate subordinated notes (2) 927 1,254
Capital notes (2) 621 620
Structured notes (3) 11 11
Truist Bank:
Fixed rate senior notes (1) 9,442 9,545
Floating rate senior notes (1) 2,398 2,399
Fixed rate subordinated notes (2) 4,908 5,043
FHLB advances 860 863
Other long-term debt (4) 1,275 1,263
Nonbank subsidiaries:
Other long-term debt (5) 294 296
Total long-term debt $ 33,773 $ 35,913


(Dollars in millions)	Mar 31, 2023		Dec 31, 2022


Truist Financial Corporation:
Fixed rate senior notes	$	16,059	$	14,107
Floating rate senior notes	999		999
Fixed rate subordinated notes(1)	1,895		1,882
Capital notes(1)	626		625
Structured notes(2)	12		12
Truist Bank:
Fixed rate senior notes	5,246		6,982
Floating rate senior notes	1,249		1,749
Fixed rate subordinated notes(1)	4,795		4,767
Fixed rate FHLB advances	2		2
Floating rate FHLB advances	37,800		10,800
Other long-term debt(3)	1,212		1,278


Total long-term debt	$	69,895	$	43,203

(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)~~(2)Consist of notes with various terms that include fixed or floating rate interest or returns that are linked to an equity index.

~~(4)~~(3)Includes debt associated with finance leases, tax credit investments, and other.

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

24 Truist Financial Corporation

NOTE 10. Shareholders’ Equity

Common Stock

The following table presents total dividends declared per share of common stock:
Three Months Ended March 31,
2022 2021
Cash dividends declared per share $ 0.48 $ 0.45


	Three Months Ended March 31,
		2023		2022
Cash dividends declared per share		$	0.52	$	0.48

~~Share Repurchase Activity~~

The Board of Directors has authorized the repurchase of up to $4.2 billion of the Company’s common stock through September 30, 2022. At March 31, 2022, Truist had remaining authorization to repurchase $2.6 billion of common stock under the Board approved repurchase plan. The amount of share repurchases is dependent on capital deployment through organic growth and acquisitions, giving consideration to economic and regulatory conditions.

~~22 Truist Financial Corporation~~

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 March 31, 2022 and 2021 (Dollars in millions)		Pension and OPEB Costs		Cash Flow Hedges		AFS Securities		HTM Securities		Other, net		Total
AOCI balance, January 1, 2021		$	(875)	$	(64)	$	1,654	$	—	$	1	$	716
OCI before reclassifications, net of tax		28		—		(2,408)		—		1		(2,379)
Amounts reclassified from AOCI:
Before tax		9		47		136		—		—		192
Tax effect		2		11		32		—		—		45
Amounts reclassified, net of tax		7		36		104		—		—		147
Total OCI, net of tax		35		36		(2,304)		—		1		(2,232)
AOCI balance, March 31, 2021		$	(840)	$	(28)	$	(650)	$	—	$	2	$	(1,516)

(Dollars in millions)														(Dollars in millions)	Pension and OPEB Costs		Cash Flow Hedges		AFS Securities		HTM Securities		Other, net		Total
AOCI balance, January 1, 2022	AOCI balance, January 1, 2022	$	(86)	$	(9)	$	(1,510)	$	—	$	1	$	(1,604)	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		—		(5,036)		—		1		(5,033)		OCI before reclassifications, net of tax	2		—		(5,036)		—		1		(5,033)
AFS Securities transferred to HTM, net of tax	AFS Securities transferred to HTM, net of tax	—		—		2,872		(2,872)		—		—		AFS Securities transferred to HTM, net of tax	—		—		2,872		(2,872)		—		—
Amounts reclassified from AOCI:	Amounts reclassified from AOCI:													Amounts reclassified from AOCI:
Before tax	Before tax	8		6		61		57		—		132		Before tax	8		6		61		57		—		132
Tax effect	Tax effect	2		1		14		13		—		30		Tax effect	2		1		14		13		—		30
Amounts reclassified, net of tax	Amounts reclassified, net of tax	6		5		47		44		—		102		Amounts reclassified, net of tax	6		5		47		44		—		102
Total OCI, net of tax	Total OCI, net of tax	8		5		(4,989)		44		1		(4,931)		Total OCI, net of tax	8		5		(4,989)		44		1		(4,931)
AOCI balance, March 31, 2022	AOCI balance, March 31, 2022	$	(78)	$	(4)	$	(3,627)	$	(2,828)	$	2	$	(6,535)	AOCI balance, March 31, 2022	$	(78)	$	(4)	$	(3,627)	$	(2,828)	$	2	$	(6,535)
AOCI balance, January 1, 2023														AOCI balance, January 1, 2023	$	(1,535)	$	(78)	$	(9,395)	$	(2,588)	$	(5)	$	(13,601)
OCI before reclassifications, net of tax														OCI before reclassifications, net of tax	(26)		125		903		—		1		1,003

Amounts reclassified from AOCI:														Amounts reclassified from AOCI:
Before tax														Before tax	16		—		(65)		70		—		21
Tax effect														Tax effect	4		—		(15)		15		—		4
Amounts reclassified, net of tax														Amounts reclassified, net of tax	12		—		(50)		55		—		17
Total OCI, net of tax														Total OCI, net of tax	(14)		125		853		55		1		1,020
AOCI balance, March 31, 2023														AOCI balance, March 31, 2023	$	(1,549)	$	47	$	(8,542)	$	(2,533)	$	(4)	$	(12,581)

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		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

Truist Financial Corporation 25

NOTE 12. Income Taxes

For the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, the provision for income taxes was ~~$330~~$394 million and ~~$351~~$330 million, respectively, representing effective tax rates of ~~18.9%~~20.6% and ~~19.2%~~18.9%, respectively. The ~~lower~~higher effective tax rate for the three months ended March 31, ~~2022~~2023 was primarily due to higher income before taxes, discrete tax ~~expenses resulting from the divestiture of certain businesses~~expense recognized in the ~~prior year.~~current quarter compared to discrete tax benefits recognized in the three months ended March 31, 2022, and the adoption of the Investments in Tax Credit Structures accounting standard related to the proportional amortization of tax credit investments in the current quarter. Refer to “Note 1. Basis of Presentation” for additional information on the adoption of this guidance. 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.

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 March 31,				Three Months Ended March 31,
(Dollars in millions)	(Dollars in millions)	Income Statement Location	2022		2021			(Dollars in millions)	Income Statement Location	2023		2022
Service cost	Service cost	Personnel expense	$	139	$	158		Service cost	Personnel expense	$	93	$	139
Interest cost	Interest cost	Other expense	88		79			Interest cost	Other expense	111		88
Estimated return on plan assets	Estimated return on plan assets	Other expense	(269)		(249)			Estimated return on plan assets	Other expense	(228)		(269)
Amortization and other	Amortization and other	Other expense	8		8			Amortization and other	Other expense	20		8
Net periodic (benefit) cost	Net periodic (benefit) cost		$	(34)	$	(4)		Net periodic (benefit) cost		$	(4)	$	(34)

Truist makes contributions to the qualified pension plans up to the maximum amount deductible for federal income tax purposes. Discretionary contributions totaling ~~$351 million~~$1.3 billion were made to the Truist pension plan during the three months ended March 31, ~~2022. There are no required contributions for 2022.~~2023.

26 Truist Financial Corporation 23

NOTE 14. Commitments and Contingencies

Truist utilizes a variety of financial instruments to mitigate exposure to risks and meet the financing needs and provide investment opportunities for clients. These financial instruments include commitments to extend credit, letters of credit and financial guarantees, derivatives, and 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 as a limited partner in certain projects through the New Market Tax Credit program, which is a Federal financial program aimed to stimulate business and real estate investment in underserved communities via a Federal tax credit. Following the first quarter of 2023 adoption of the Investments in Tax Credit Structures accounting standard, these tax credits, referred to as “Other qualified tax credits” below, qualify for the proportional amortization method. Refer to “Note 1. Basis of Presentation” for additional information.

The following table summarizes certain tax credit and certain equity investments:

(Dollars in millions)

Balance Sheet Location

Mar 31, 2022

Dec 31, 2021

(Dollars in millions)

Balance Sheet Location

Mar 31, 2023

Dec 31, 2022

Investments in affordable housing projects:

Investments in affordable housing projects and other qualified tax credits:

Carrying amount

Other assets

4,133

4,107

Carrying amount

Other assets

5,765

5,869

Amount of future funding commitments included in carrying amount

Other liabilities

1,346

1,285

Amount of future funding commitments included in carrying amount

Other liabilities

1,726

1,762

Lending exposure

Loans and leases for funded amounts

942

763

Lending exposure

Loans and leases for funded amounts

1,625

1,547

Renewable energy investments:

Carrying amount

Other assets

199

257

Carrying amount

Other assets

272

264

Amount of future funding commitments not included in carrying amount

444

361

Private equity and certain other equity method investments:

SBIC and certain other equity method investments:

Carrying amount

Other assets

1,925

1,822

Carrying amount

Other assets

597

596

Amount of future funding commitments not included in carrying amount

435

411

Amount of future funding commitments not included in carrying amount

597

532

The following table presents a summary of tax credits and amortization associated with the Company’s tax credit investment ~~activity:~~activity. Activity related to the Company’s renewable energy investments was immaterial.
Three Months Ended March 31,
(Dollars in millions) Income Statement Location 2022 2021
Tax credits:
Investments in affordable housing projects Provision for income taxes $ 127 $ 120
Other community development investments Provision for income taxes 23 23
Renewable energy investments NA (1) 37 39
Amortization and other changes in carrying amount:
Investments in affordable housing projects Provision for income taxes $ 124 $ 119
Other community development investments Other noninterest income 19 19
Renewable energy investments Other noninterest income 4 —


		Three Months Ended March 31,
(Dollars in millions)	Income Statement Location		2023		2022
Tax credits:


Investments in affordable housing projects, other qualified tax credits, and other community development investments	Provision for income taxes		$	157	$	150

Amortization and other changes in carrying amount:
Investments in affordable housing projects and other qualified tax credits(1)	Provision for income taxes		$	148	$	124
Other community development investments(1)	Other noninterest income		2		19

(1)In the first quarter of 2023, the Company adopted the Investments in Tax Credit Structures accounting standard. As a result, amortization related to these tax credits ~~received~~started being recognized in the Provision for ~~these investments are recorded~~income taxes as ~~a reduction~~of the adoption of this standard. This activity was previously recognized in Other income. Refer to ~~the carrying value~~“Note 1. Basis of ~~these investments.~~Presentation” for additional information.

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)	Mar 31, 2022		Dec 31, 2021		(Dollars in millions)	Mar 31, 2023		Dec 31, 2022

Commitments to extend, originate, or purchase credit		$	202,695	$	198,658
Commitments to extend, originate, or purchase credit and other commitments						Commitments to extend, originate, or purchase credit and other commitments	$	215,998	$	216,838
Residential mortgage loans sold with recourse	Residential mortgage loans sold with recourse	221		244		Residential mortgage loans sold with recourse	200		200
CRE mortgages serviced for others covered by recourse provisions	CRE mortgages serviced for others covered by recourse provisions	9,938		10,243		CRE mortgages serviced for others covered by recourse provisions	9,829		9,955
Other loans serviced for others covered by recourse provisions	Other loans serviced for others covered by recourse provisions	594		588		Other loans serviced for others covered by recourse provisions	759		723
Letters of credit	Letters of credit	5,818		5,568		Letters of credit	6,158		6,030

24 Truist Financial Corporation 27

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~~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)	(Dollars in millions)	Mar 31, 2022		Dec 31, 2021		(Dollars in millions)	Mar 31, 2023		Dec 31, 2022
Total return swaps:	Total return swaps:					Total return swaps:
VIE assets	VIE assets	$	1,627	$	1,519	VIE assets	$	1,880	$	1,830
Trading loans and bonds	Trading loans and bonds	1,602		1,491		Trading loans and bonds	1,801		1,790
VIE liabilities	VIE liabilities	104		50		VIE liabilities	118		163

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~~which could potentially be significant. 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~~third-party clients via the TRS contracts. For additional information on TRS contracts and the related VIEs, see “Note 16. Derivative Financial Instruments.”

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 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)	Mar 31, 2022		Dec 31, 2021		(Dollars in millions)	Mar 31, 2023		Dec 31, 2022

Pledged securities	Pledged securities	$	28,614	$	29,678	Pledged securities	$	71,890	$	38,012

Pledged loans:	Pledged loans:					Pledged loans:
FRB	FRB	70,815		73,349		FRB	75,018		71,234
FHLB	FHLB	60,151		64,698		FHLB	70,766		68,988
Unused borrowing capacity:	Unused borrowing capacity:					Unused borrowing capacity:
FRB	FRB	51,876		52,170		FRB	53,291		49,250
FHLB	FHLB	45,961		49,244		FHLB	24,678		20,770

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 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 many class members and can involve claims for substantial 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, 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, 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.

28 Truist Financial Corporation 25

The Company estimates reasonably possible losses, in excess of amounts accrued, of up to approximately $200 million as of March 31, ~~2022.~~2023. This estimate does 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 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.

For certain matters, Truist may be unable to estimate the loss or range of loss, even if it believes that a loss is probable or reasonably possible, until developments in the case provide additional information sufficient to support such an estimate. Such matters are not accrued for and are not reflected in the estimate 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, 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.~~ongoing, is completed. Trial is presently set to commence on April 29, 2024. 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 that it infringes any of the patents at issue in the lawsuit and asserting that USAA’s patents are invalid or unenforceable. On December 30, 2022, the Company filed a motion for leave to amend its answer to assert counterclaims seeking damages as well as injunctive relief against USAA for infringing certain patents owned by the Company and practiced by USAA’s mobile remote deposit capture systems, which motion was granted on April 8, 2023. On March 20, 2023, USAA filed a motion for leave to file an amended complaint which would add a claim that the Company’s mobile remote deposit capture systems infringe an additional USAA patent. On April 14, 2023, USAA filed a motion seeking to sever Truist’s counterclaims from the case. USAA’s motions above are both pending. Discovery in the district court proceedings is ongoing, and trial is presently set to commence on March 18, 2024.

At the Patent Trial and Appeal Board, the Company filed separate petitions for inter partes review on October 11, November 7, and November 15, 2022 challenging the validity of each of the three patents asserted by USAA in the lawsuit. In addition, on April 13, 2023, the Company filed a petition for inter partes review challenging the validity of the fourth patent USAA is seeking to add to the lawsuit. If institution of any of the petitions for inter partes review is granted, the Patent Trial and Appeal Board will review the validity of the claims in the applicable patent(s).

Truist Financial Corporation 29

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~~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:


March 31, 2022 (Dollars in millions)		Total		Level 1		Level 2		Level 3		Netting Adjustments (1)
March 31, 2023 (Dollars in millions)												March 31, 2023 (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	$	965	$	—	$	965	$	—	$	—	U.S. Treasury	$	120	$	—	$	120	$	—	$	—
GSE	GSE	391		—		391		—		—		GSE	112		—		112		—		—
Agency MBS - residential	Agency MBS - residential	1,164		—		1,164		—		—		Agency MBS - residential	797		—		797		—		—
Agency MBS - commercial		52		—		52		—		—

States and political subdivisions	States and political subdivisions	69		—		69		—		—		States and political subdivisions	293		—		293		—		—

Corporate and other debt securities	Corporate and other debt securities	1,023		—		1,023		—		—		Corporate and other debt securities	1,118		—		1,118		—		—
Loans	Loans	1,933		—		1,933		—		—		Loans	1,869		—		1,869		—		—
Other	Other	323		273		50		—		—		Other	292		260		32		—		—
Total trading assets	Total trading assets	5,920		273		5,647		—		—		Total trading assets	4,601		260		4,341		—		—
AFS securities:	AFS securities:											AFS securities:
U.S. Treasury	U.S. Treasury	9,412		—		9,412		—		—		U.S. Treasury	10,441		—		10,441		—		—
GSE	GSE	245		—		245		—		—		GSE	301		—		301		—		—
Agency MBS - residential	Agency MBS - residential	68,238		—		68,238		—		—		Agency MBS - residential	55,175		—		55,175		—		—
Agency MBS - commercial	Agency MBS - commercial	2,659		—		2,659		—		—		Agency MBS - commercial	2,398		—		2,398		—		—
States and political subdivisions	States and political subdivisions	370		—		370		—		—		States and political subdivisions	425		—		425		—		—
Non-agency MBS	Non-agency MBS	3,803		—		3,803		—		—		Non-agency MBS	3,098		—		3,098		—		—
Other	Other	26		—		26		—		—		Other	20		—		20		—		—
Total AFS securities	Total AFS securities	84,753		—		84,753		—		—		Total AFS securities	71,858		—		71,858		—		—
LHFS at fair value	LHFS at fair value	3,364		—		3,364		—		—		LHFS at fair value	1,911		—		1,911		—		—
Loans and leases	Loans and leases	21		—		—		21		—		Loans and leases	17		—		—		17		—
Loan servicing rights at fair value	Loan servicing rights at fair value	3,013		—		—		3,013		—		Loan servicing rights at fair value	3,303		—		—		3,303		—
Other assets:	Other assets:											Other assets:
Derivative assets	Derivative assets	2,113		739		2,989		7		(1,622)		Derivative assets	692		625		1,816		13		(1,762)
Equity securities	Equity securities	1,024		812		212		—		—		Equity securities	857		757		100		—		—

Total assets	Total assets	$	100,208	$	1,824	$	96,965	$	3,041	$	(1,622)	Total assets	$	83,239	$	1,642	$	80,026	$	3,333	$	(1,762)
Liabilities:	Liabilities:											Liabilities:
Derivative liabilities	Derivative liabilities	$	1,482	$	360	$	4,128	$	81	$	(3,087)	Derivative liabilities	$	2,589	$	394	$	3,971	$	31	$	(1,807)
Securities sold short	Securities sold short	1,717		13		1,704		—		—		Securities sold short	1,789		113		1,676		—		—
Total liabilities	Total liabilities	$	3,199	$	373	$	5,832	$	81	$	(3,087)	Total liabilities	$	4,378	$	507	$	5,647	$	31	$	(1,807)

30 Truist Financial Corporation 27


December 31, 2021 (Dollars in millions)		Total		Level 1		Level 2		Level 3		Netting Adjustments (1)
December 31, 2022 (Dollars in millions)												December 31, 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	$	125	$	—	$	125	$	—	$	—	U.S. Treasury	$	137	$	—	$	137	$	—	$	—
GSE	GSE	306		—		306		—		—		GSE	457		—		457		—		—
Agency MBS - residential	Agency MBS - residential	1,016		—		1,016		—		—		Agency MBS - residential	804		—		804		—		—
Agency MBS - commercial	Agency MBS - commercial	13		—		13		—		—		Agency MBS - commercial	62		—		62		—		—
States and political subdivisions	States and political subdivisions	91		—		91		—		—		States and political subdivisions	422		—		422		—		—

Corporate and other debt securities	Corporate and other debt securities	738		—		738		—		—		Corporate and other debt securities	761		—		761		—		—
Loans	Loans	1,791		—		1,791		—		—		Loans	1,960		—		1,960		—		—
Other	Other	343		285		58		—		—		Other	302		261		41		—		—
Total trading assets	Total trading assets	4,423		285		4,138		—		—		Total trading assets	4,905		261		4,644		—		—
AFS securities:	AFS securities:											AFS securities:
U.S. Treasury	U.S. Treasury	9,795		—		9,795		—		—		U.S. Treasury	10,295		—		10,295		—		—
GSE	GSE	1,698		—		1,698		—		—		GSE	303		—		303		—		—
Agency MBS - residential	Agency MBS - residential	134,042		—		134,042		—		—		Agency MBS - residential	55,225		—		55,225		—		—
Agency MBS - commercial	Agency MBS - commercial	2,882		—		2,882		—		—		Agency MBS - commercial	2,424		—		2,424		—		—
States and political subdivisions	States and political subdivisions	420		—		420		—		—		States and political subdivisions	416		—		416		—		—
Non-agency MBS	Non-agency MBS	4,258		—		4,258		—		—		Non-agency MBS	3,117		—		3,117		—		—
Other	Other	28		—		28		—		—		Other	21		—		21		—		—
Total AFS securities	Total AFS securities	153,123		—		153,123		—		—		Total AFS securities	71,801		—		71,801		—		—
LHFS at fair value	LHFS at fair value	3,544		—		3,544		—		—		LHFS at fair value	1,065		—		1,065		—		—
Loans and leases	Loans and leases	23		—		—		23		��		Loans and leases	18		—		—		18		—
Loan servicing rights at fair value	Loan servicing rights at fair value	2,633		—		—		2,633		—		Loan servicing rights at fair value	3,758		—		—		3,758		—
Other assets:	Other assets:											Other assets:
Derivative assets	Derivative assets	2,370		887		3,110		30		(1,657)		Derivative assets	684		472		1,980		1		(1,769)
Equity securities	Equity securities	1,066		967		99		—		—		Equity securities	898		796		102		—		—

Total assets	Total assets	$	167,182	$	2,139	$	164,014	$	2,686	$	(1,657)	Total assets	$	83,129	$	1,529	$	79,592	$	3,777	$	(1,769)
Liabilities:	Liabilities:											Liabilities:
Derivative liabilities	Derivative liabilities	$	586	$	438	$	3,056	$	42	$	(2,950)	Derivative liabilities	$	2,971	$	364	$	4,348	$	37	$	(1,778)
Securities sold short	Securities sold short	1,731		8		1,723		—		—		Securities sold short	1,551		114		1,437		—		—
Total liabilities	Total liabilities	$	2,317	$	446	$	4,779	$	42	$	(2,950)	Total liabilities	$	4,522	$	478	$	5,785	$	37	$	(1,778)

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

At March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, investments totaling ~~$495~~$367 million and ~~$440~~$385 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, ~~2021.~~2022.

~~28 Truist Financial Corporation~~

Activity for Level 3 assets and liabilities is summarized below:


Three Months Ended March 31, 2023 and 2022 (Dollars in millions)							Three Months Ended March 31, 2023 and 2022 (Dollars in millions)	Loans and Leases		Loan Servicing Rights		Net Derivatives
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	—		357		(170)

Issuances							Issuances	—		158		17

Settlements							Settlements	—		(135)		91

Transfers out of level 3 and other							Transfers out of level 3 and other	(2)		—		—
Balance at March 31, 2022							Balance at March 31, 2022	$	21	$	3,013	$	(74)
Balance at January 1, 2023							Balance at January 1, 2023	$	18	$	3,758	$	(36)
Total realized and unrealized gains (losses):							Total realized and unrealized gains (losses):
Included in earnings							Included in earnings	—		(5)		(2)

Issuances							Issuances	—		48		(2)
Sales							Sales	—		(428)		—
Settlements							Settlements	(1)		(70)		22

Balance at March 31, 2023							Balance at March 31, 2023	$	17	$	3,303	$	(18)
Change in unrealized gains (losses) included in earnings for the period, attributable to assets and liabilities still held at March 31, 2023							Change in unrealized gains (losses) included in earnings for the period, attributable to assets and liabilities still held at March 31, 2023	$	—	$	(54)	$	(5)

Three Months Ended March 31, 2022 and 2021 (Dollars in millions)	Loans and Leases		Loan Servicing Rights		Net Derivatives

Balance at January 1, 2021	$	—	$	2,023	$	172
Total realized and unrealized gains (losses):
Included in earnings	—		374		(164)

Issuances	—		192		96

Settlements	—		(224)		(114)

Balance at March 31, 2021	$	—	$	2,365	$	(10)
Balance at January 1, 2022	$	23	$	2,633	$	(12)
Total realized and unrealized gains (losses):
Included in earnings	—		357		(170)

Issuances	—		158		17

Settlements	—		(135)		91

Other	(2)		—		—
Balance at March 31, 2022	$	21	$	3,013	$	(74)
Change in unrealized gains (losses) included in earnings for the period, attributable to assets and liabilities still held at March 31, 2022	$	—	$	357	$	(45)
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

Truist Financial Corporation 31

Fair Value Option

The following table details the fair value and UPB of certain loans that were elected to be measured at fair value:


		March 31, 2022						December 31, 2021							March 31, 2023						December 31, 2022
(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	$	1,933	$	1,944	$	(11)	$	1,791	$	1,784	$	7	Trading loans	$	1,869	$	1,989	$	(120)	$	1,960	$	2,101	$	(141)
Loans and leases	Loans and leases	21		23		(2)		23		35		(12)		Loans and leases	17		19		(2)		18		20		(2)
LHFS at fair value	LHFS at fair value	3,364		3,405		(41)		3,544		3,450		94		LHFS at fair value	1,911		1,883		28		1,065		1,056		9

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)	Mar 31, 2022		Dec 31, 2021		(Dollars in millions)	Mar 31, 2023		Dec 31, 2022
Carrying value:	Carrying value:					Carrying value:
LHFS	LHFS	$	141	$	101	LHFS	$	127	$	271
Loans and leases	Loans and leases	429		443		Loans and leases	434		500
Other	Other	52		100		Other	98		120

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.


		Three Months Ended March 31,					Three Months Ended March 31,
(Dollars in millions)	(Dollars in millions)	2022		2021		(Dollars in millions)	2023		2022
Valuation adjustments:	Valuation adjustments:					Valuation adjustments:
LHFS	LHFS	$	(3)	$	(16)	LHFS	$	—	$	(3)
Loans and leases	Loans and leases	(97)		(154)		Loans and leases	(166)		(97)
Other(1)	Other(1)	(139)		(95)		Other(1)	(44)		(29)

(1)Prior period amounts were revised.

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 LOCOM. The table above excludes ~~$662~~$122 million and ~~$1.2 billion~~$108 million of LHFS carried at cost at March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively, that did not require a valuation adjustment during the period. The remainder of LHFS is carried at fair value. ~~LHFS that were classified as nonperforming and LHFS that were 90 days or more past due and still accruing interest were not material at March 31, 2022 and December 31, 2021.~~

~~Truist Financial Corporation 29~~

Loans and leases ~~consists~~consist of larger commercial loans and leases that 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 primarily recorded in the Provision for credit losses in the Consolidated ~~statement~~Statement of ~~income.~~Income. Refer to “Note 1. Basis of Presentation” in Truist’s Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 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 LOCOM, less costs to sell.

32 Truist Financial Corporation

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:


			March 31, 2022				December 31, 2021						March 31, 2023				December 31, 2022
(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	$	61,662	$	59,124	$	1,494	$	1,495	HTM securities	Level 2	$	56,932	$	48,097	$	57,713	$	47,791
Loans and leases HFI, net of ALLL	Loans and leases HFI, net of ALLL	Level 3	285,890		282,709		285,055		284,914		Loans and leases HFI, net of ALLL	Level 3	323,177		312,107		321,596		308,738
Financial liabilities:	Financial liabilities:										Financial liabilities:
Time deposits	Time deposits	Level 2	14,476		14,582		15,886		16,017		Time deposits	Level 2	32,326		32,140		23,474		23,383
Long-term debt	Long-term debt	Level 2	33,773		33,275		35,913		36,251		Long-term debt	Level 2	69,895		65,114		43,203		40,951

The carrying value of the RUFC, which approximates the fair value of unfunded commitments, was ~~$253~~$282 million and ~~$260~~$272 million at March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively.

30 Truist Financial Corporation 33

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 March 31, 2022 and December 31, 2021.~~Company:


		March 31, 2022						December 31, 2021													March 31, 2023									December 31, 2022
		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	$	19,400		$	—		$	—		$	16,650		$	—		$	—
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	$	7,043	$	—	$	(34)			$	12,690			$	—			$	(6)			Swaps hedging long-term debt	16,018			—			(53)			16,393			—			(68)

Swaps hedging AFS securities	Swaps hedging AFS securities	7,098		—		—		12,711				—				(2)				Swaps hedging AFS securities	7,097			—			—			7,097			—			—

Total	Total	14,141		—		(34)		25,401				—				(8)				Total	23,115			—			(53)			23,490			—			(68)
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	153,378		733		(1,320)		150,223				1,716				(733)				Swaps	160,381			625			(2,169)			155,670			579			(2,665)

Options	Options	30,904		113		(95)		23,659				43				(30)				Options	42,648			171			(166)			29,840			172			(192)
Forward commitments	Forward commitments	4,118		29		(14)		2,404				2				(5)				Forward commitments	791			2			(10)			1,495			8			(2)
Other	Other	2,572		—		(1)		2,927				—				—				Other	3,092			8			(7)			3,823			1			—
Equity contracts	Equity contracts	39,530		1,275		(1,630)		34,232				1,582				(2,089)				Equity contracts	34,979			727			(1,109)			33,185			644			(901)
Credit contracts:	Credit contracts:																			Credit contracts:
Trading assets																				Trading assets	160			—			—			140			—			—
Loans and leases	Loans and leases	630		—		(1)		570				—				(2)				Loans and leases	780			—			(1)			394			—			—
Risk participation agreements	Risk participation agreements	7,330		—		(3)		8,145				—				(4)				Risk participation agreements	7,156			—			(3)			6,824			—			(3)
Total return swaps	Total return swaps	1,515		8		(5)		1,445				3				(19)				Total return swaps	1,793			71			(6)			1,729			81			(2)

Foreign exchange contracts	Foreign exchange contracts	18,663		207		(204)		16,102				160				(156)				Foreign exchange contracts	21,527			300			(304)			19,022			364			(380)
Commodity	Commodity	6,338		1,152		(1,144)		4,641				475				(468)				Commodity	7,534			454			(450)			4,881			444			(447)

Total	Total	264,978		3,517		(4,417)		244,348				3,981				(3,506)				Total	280,841			2,358			(4,225)			257,003			2,293			(4,592)
Mortgage banking:	Mortgage banking:																			Mortgage banking:
Interest rate contracts:	Interest rate contracts:																			Interest rate contracts:
Swaps	Swaps	1,016		3		—		441				—				—				Swaps	227			—			—			115			—			—

Interest rate lock commitments	Interest rate lock commitments	3,911		7		(51)		4,163				30				(7)				Interest rate lock commitments	1,837			12			(12)			999			1			(17)
When issued securities, forward rate agreements and forward commitments	When issued securities, forward rate agreements and forward commitments	7,129		147		(1)		6,913				7				(15)				When issued securities, forward rate agreements and forward commitments	3,470			15			(17)			2,128			25			(6)
Other	Other	357		2		—		424				1				—				Other	243			1			—			140			1			—

Total	Total	12,413		159		(52)		11,941				38				(22)				Total	5,777			28			(29)			3,382			27			(23)
MSRs:	MSRs:																			MSRs:
Interest rate contracts:	Interest rate contracts:																			Interest rate contracts:
Swaps	Swaps	19,634		1		—		12,837				—				—				Swaps	14,329			—			—			14,566			—			—

Options	Options	5,237		39		—		101				1				—				Options	15,089			53			(85)			13,930			122			(48)
When issued securities, forward rate agreements and forward commitments	When issued securities, forward rate agreements and forward commitments	2,856		19		(66)		3,927				7				—				When issued securities, forward rate agreements and forward commitments	2,184			14			(3)			2,459			11			(15)
Other	Other	1,273		—		—		2,017				—				—				Other	2,268			1			(1)			1,532			—			(3)
Total	Total	29,000		59		(66)		18,882				8				—				Total	33,870			68			(89)			32,487			133			(66)
Total derivatives not designated as hedges	Total derivatives not designated as hedges	306,391		3,735		(4,535)		275,171				4,027				(3,528)				Total derivatives not designated as hedges	320,488			2,454			(4,343)			292,872			2,453			(4,681)
Total derivatives	Total derivatives	$	320,532	3,735		(4,569)		$	300,572			4,027				(3,536)				Total derivatives	$	363,003		2,454			(4,396)			$	333,012		2,453			(4,749)
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			(1,290)		1,290						(1,312)				1,312				Amounts subject to master netting arrangements				(1,251)			1,251						(1,223)			1,223
Cash collateral (received) posted for amounts subject to master netting arrangements	Cash collateral (received) posted for amounts subject to master netting arrangements			(332)		1,797						(345)				1,638				Cash collateral (received) posted for amounts subject to master netting arrangements				(511)			556						(546)			555

Net amount	Net amount			$	2,113	$	(1,482)					$	2,370			$	(586)			Net amount				$	692		$	(2,589)					$	684		$	(2,971)

34 Truist Financial Corporation 31

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:


March 31, 2022 (Dollars in millions)		Gross Amount		Amount Offset		Net Amount in Consolidated Balance Sheets		Held/Pledged Financial Instruments		Net Amount
March 31, 2023 (Dollars in millions)												March 31, 2023 (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	$	2,787	$	(1,270)	$	1,517	$	—	$	1,517	Derivatives subject to master netting arrangement or similar arrangement	$	1,722	$	(1,370)	$	352	$	—	$	352
Derivatives not subject to master netting arrangement or similar arrangement	Derivatives not subject to master netting arrangement or similar arrangement	209		—		209		—		209		Derivatives not subject to master netting arrangement or similar arrangement	107		—		107		—		107
Exchange traded derivatives	Exchange traded derivatives	739		(352)		387		—		387		Exchange traded derivatives	625		(392)		233		—		233
Total derivative assets	Total derivative assets	$	3,735	$	(1,622)	$	2,113	$	—	$	2,113	Total derivative assets	$	2,454	$	(1,762)	$	692	$	—	$	692
Derivative liabilities:	Derivative liabilities:											Derivative liabilities:
Derivatives subject to master netting arrangement or similar arrangement	Derivatives subject to master netting arrangement or similar arrangement	$	(3,819)	$	2,735	$	(1,084)	$	64	$	(1,020)	Derivatives subject to master netting arrangement or similar arrangement	$	(3,431)	$	1,415	$	(2,016)	$	95	$	(1,921)
Derivatives not subject to master netting arrangement or similar arrangement	Derivatives not subject to master netting arrangement or similar arrangement	(390)		—		(390)		—		(390)		Derivatives not subject to master netting arrangement or similar arrangement	(572)		—		(572)		—		(572)
Exchange traded derivatives	Exchange traded derivatives	(360)		352		(8)		—		(8)		Exchange traded derivatives	(393)		392		(1)		—		(1)
Total derivative liabilities	Total derivative liabilities	$	(4,569)	$	3,087	$	(1,482)	$	64	$	(1,418)	Total derivative liabilities	$	(4,396)	$	1,807	$	(2,589)	$	95	$	(2,494)

December 31, 2021 (Dollars in millions)		Gross Amount		Amount Offset		Net Amount in Consolidated Balance Sheets		Held/Pledged Financial Instruments		Net Amount
December 31, 2022 (Dollars in millions)												December 31, 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	$	2,752	$	(1,221)	$	1,531	$	(1)	$	1,530	Derivatives subject to master netting arrangement or similar arrangement	$	1,895	$	(1,408)	$	487	$	—	$	487
Derivatives not subject to master netting arrangement or similar arrangement	Derivatives not subject to master netting arrangement or similar arrangement	388		—		388		—		388		Derivatives not subject to master netting arrangement or similar arrangement	86		—		86		—		86
Exchange traded derivatives	Exchange traded derivatives	887		(436)		451		—		451		Exchange traded derivatives	472		(361)		111		—		111
Total derivative assets	Total derivative assets	$	4,027	$	(1,657)	$	2,370	$	(1)	$	2,369	Total derivative assets	$	2,453	$	(1,769)	$	684	$	—	$	684
Derivative liabilities:	Derivative liabilities:											Derivative liabilities:
Derivatives subject to master netting arrangement or similar arrangement	Derivatives subject to master netting arrangement or similar arrangement	$	(2,873)	$	2,514	$	(359)	$	66	$	(293)	Derivatives subject to master netting arrangement or similar arrangement	$	(3,688)	$	1,417	$	(2,271)	$	43	$	(2,228)
Derivatives not subject to master netting arrangement or similar arrangement	Derivatives not subject to master netting arrangement or similar arrangement	(225)		—		(225)		—		(225)		Derivatives not subject to master netting arrangement or similar arrangement	(697)		—		(697)		—		(697)
Exchange traded derivatives	Exchange traded derivatives	(438)		436		(2)		—		(2)		Exchange traded derivatives	(364)		361		(3)		—		(3)
Total derivative liabilities	Total derivative liabilities	$	(3,536)	$	2,950	$	(586)	$	66	$	(520)	Total derivative liabilities	$	(4,749)	$	1,778	$	(2,971)	$	43	$	(2,928)

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


		March 31, 2022						December 31, 2021							March 31, 2023						December 31, 2022
				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)	$	48,429	$	(441)	$	(5)	$	108,758	$	(400)	$	(150)	AFS securities(1)	$	38,761	$	(534)	$	(4)	$	38,773	$	(630)	$	(4)
Loans and leases	Loans and leases	377		—		12		382		—		12		Loans and leases	350		—		9		353		—		10

Long-term debt	Long-term debt	24,562		(355)		361		27,361		(137)		629		Long-term debt	27,385		(303)		(134)		25,378		(780)		218

(1)The amortized cost of AFS securities was ~~$51.3~~$45.5 billion at March 31, ~~2022~~2023 and ~~$110.6~~$46.2 billion at December 31, ~~2021.~~2022.

32 Truist Financial Corporation 35

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 March 31,
(Dollars in millions) 2022 2021
Pre-tax gain (loss) reclassified from AOCI into interest expense:
Deposits $ — $ (1)
Short-term borrowings — (5)
Long-term debt (6) (5)
Total $ (6) $ (11)
Pre-tax gain (loss) reclassified from AOCI into other expense: (1)
Deposits $ — $ (12)
Short-term borrowings — (20)
Long-term debt — (4)
Total $ — $ (36)

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


	Three Months Ended March 31,
(Dollars in millions)		2023		2022
Pre-tax gain (loss) recognized in OCI:
Commercial loans		$	163	$	—




Pre-tax gain (loss) reclassified from AOCI into interest expense:



Long-term debt		$	—	$	(6)

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


		Three Months Ended March 31,					Three Months Ended March 31,
(Dollars in millions)	(Dollars in millions)		2022		2021			(Dollars in millions)	2023		2022

AFS securities:
Investment securities:								Investment securities:
Amounts related to interest settlements	Amounts related to interest settlements		$	(5)	$	(11)		Amounts related to interest settlements	$	76	$	(5)
Recognized on derivatives	Recognized on derivatives		414		524			Recognized on derivatives	(95)		414
Recognized on hedged items	Recognized on hedged items		(402)		(526)			Recognized on hedged items	106		(402)
Net income (expense) recognized			7		(13)
Net income (expense) recognized(1)								Net income (expense) recognized(1)	87		7
Loans and leases:	Loans and leases:							Loans and leases:
Amounts related to interest settlements			—		—
Recognized on derivatives			—		—

Recognized on hedged items	Recognized on hedged items		(1)		(1)			Recognized on hedged items	(1)		(1)
Net income (expense) recognized	Net income (expense) recognized		(1)		(1)			Net income (expense) recognized	(1)		(1)

Long-term debt:	Long-term debt:							Long-term debt:
Amounts related to interest settlements	Amounts related to interest settlements		16		—			Amounts related to interest settlements	(46)		16
Recognized on derivatives	Recognized on derivatives		(429)		—			Recognized on derivatives	156		(429)
Recognized on hedged items	Recognized on hedged items		486		79			Recognized on hedged items	(142)		486
Net income (expense) recognized	Net income (expense) recognized		73		79			Net income (expense) recognized	(32)		73
Net income (expense) recognized, total	Net income (expense) recognized, total		$	79	$	65		Net income (expense) recognized, total	$	54	$	79

(1)Includes $10 million and $8 million of income recognized for the three months ended March 31, 2023 and 2022, respectively, from securities with terminated hedges that were reclassified to HTM. The income recognized was offset by the amortization of the fair value mark.

36 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)	Mar 31, 2022		Dec 31, 2021		(Dollars in millions)	Mar 31, 2023		Dec 31, 2022

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)		$	(4)	$	(9)
Estimated portion of net after-tax gain (loss) on terminated hedges to be reclassified from AOCI into earnings during the next 12 months		(4)		(9)

Net unrecognized after-tax gain (loss) on active hedges recorded in AOCI						Net unrecognized after-tax gain (loss) on active hedges recorded in AOCI	$	6	$	(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)	41		40
Estimated portion of net after-tax gain (loss) on active and terminated hedges to be reclassified from AOCI into earnings during the next 12 months						Estimated portion of net after-tax gain (loss) on active and terminated hedges to be reclassified from AOCI into earnings during the next 12 months	(54)		(31)
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	6 years		6 years
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 2030) (1)		$	856	$	767
Unrecognized pre-tax net gain (loss) on terminated hedges (to be recognized as interest primarily through 2033)(1)						Unrecognized pre-tax net gain (loss) on terminated hedges (to be recognized as interest primarily through 2033)(1)	$	308	$	669
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	216		231		Portion of pre-tax net gain (loss) on terminated hedges to be recognized as a change in interest during the next 12 months	52		163

(1)Includes deferred gains that are recorded in AOCI as a result of the reclassification to HTM of previously hedged securities of ~~$502~~$447 million at March 31, 2023 and $457 million at December 31, 2022.

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.

~~Truist Financial Corporation 33~~

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


			Three Months Ended March 31,					Three Months Ended March 31,
(Dollars in millions)	(Dollars in millions)	Income Statement Location		2022		2021			(Dollars in millions)	Income Statement Location	2023		2022

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		$	56	$	102		Interest rate contracts	Investment banking and trading income and other income	$	34	$	56
Foreign exchange contracts	Foreign exchange contracts	Investment banking and trading income and other income		32		26			Foreign exchange contracts	Investment banking and trading income and other income	(3)		32
Equity contracts	Equity contracts	Investment banking and trading income and other income		5		(8)			Equity contracts	Investment banking and trading income and other income	2		5
Credit contracts	Credit contracts	Investment banking and trading income and other income		8		(34)			Credit contracts	Investment banking and trading income and other income	(33)		8
Commodity contracts	Commodity contracts	Investment banking and trading income		5		2			Commodity contracts	Investment banking and trading income	10		5
Mortgage banking:	Mortgage banking:								Mortgage banking:
Interest rate contracts		Residential mortgage income		261		91
Interest rate contracts		Commercial mortgage income		(1)		(1)
Interest rate contracts - residential									Interest rate contracts - residential	Mortgage banking income	(1)		261
Interest rate contracts - commercial									Interest rate contracts - commercial	Mortgage banking income	1		(1)
MSRs:	MSRs:								MSRs:
Interest rate contracts		Residential mortgage income		(349)		(333)
Interest rate contracts		Commercial mortgage income		(9)		(12)
Interest rate contracts - residential									Interest rate contracts - residential	Mortgage banking income	1		(349)
Interest rate contracts - commercial									Interest rate contracts - commercial	Mortgage banking income	3		(9)
Total	Total			$	8	$	(167)		Total		$	14	$	8

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 March 31, ~~2022,~~2023, the remaining terms on these risk participations ranged from less than one year to 1615 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.

The Company has also entered into TRS contracts on 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.”

Truist Financial Corporation 37

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)

Mar 31, 2022

Dec 31, 2021

(Dollars in millions)

Mar 31, 2023

Dec 31, 2022

Risk participation agreements:

Maximum potential amount of exposure

327

521

Maximum potential amount of exposure

618

575

Total return swaps:

Cash collateral held

323

290

Cash collateral held

473

453

~~34 Truist Financial Corporation~~

The following table summarizes collateral positions with counterparties:


(Dollars in millions)	(Dollars in millions)	Mar 31, 2022		Dec 31, 2021		(Dollars in millions)	Mar 31, 2023		Dec 31, 2022

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	$	332	$	346	Cash and other collateral received from counterparties	$	511	$	542
Derivatives in a net gain position secured by collateral received	Derivatives in a net gain position secured by collateral received	450		506		Derivatives in a net gain position secured by collateral received	586		618
Unsecured positions in a net gain with counterparties after collateral postings	Unsecured positions in a net gain with counterparties after collateral postings	79		143		Unsecured positions in a net gain with counterparties after collateral postings	75		76
Cash collateral posted to counterparties	Cash collateral posted to counterparties	1,861		1,704		Cash collateral posted to counterparties	636		590
Derivatives in a net loss position secured by collateral	Derivatives in a net loss position secured by collateral	2,196		2,591		Derivatives in a net loss position secured by collateral	809		692
Additional collateral that would have been posted had the Company’s credit ratings dropped below investment grade		2		3

Central counterparties clearing:	Central counterparties clearing:					Central counterparties clearing:
Cash collateral, including initial margin, received from central clearing parties						Cash collateral, including initial margin, received from central clearing parties	—		4
Cash collateral, including initial margin, posted to central clearing parties	Cash collateral, including initial margin, posted to central clearing parties	—		31		Cash collateral, including initial margin, posted to central clearing parties	85		45
Derivatives in a net loss position	Derivatives in a net loss position	7		18		Derivatives in a net loss position	19		13
Derivatives in a net gain position	Derivatives in a net gain position	86		—		Derivatives in a net gain position	1		12
Securities pledged to central counterparties clearing	Securities pledged to central counterparties clearing	797		904		Securities pledged to central counterparties clearing	933		639

NOTE 17. Computation of EPS

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


		Three Months Ended March 31,					Three Months Ended March 31,
(Dollars in millions, except per share data, shares in thousands)	(Dollars in millions, except per share data, shares in thousands)		2022		2021			(Dollars in millions, except per share data, shares in thousands)	2023		2022

Net income available to common shareholders	Net income available to common shareholders		$	1,327	$	1,334		Net income available to common shareholders	$	1,410	$	1,327
Weighted average number of common shares	Weighted average number of common shares		1,329,037		1,345,666			Weighted average number of common shares	1,328,602		1,329,037
Effect of dilutive outstanding equity-based awards	Effect of dilutive outstanding equity-based awards		12,526		13,266			Effect of dilutive outstanding equity-based awards	10,878		12,526
Weighted average number of diluted common shares	Weighted average number of diluted common shares		1,341,563		1,358,932			Weighted average number of diluted common shares	1,339,480		1,341,563
Basic EPS	Basic EPS		$	1.00	$	0.99		Basic EPS	$	1.06	$	1.00
Diluted EPS	Diluted EPS		$	0.99	$	0.98		Diluted EPS	$	1.05	$	0.99
Anti-dilutive awards	Anti-dilutive awards		—		376			Anti-dilutive awards	621		—

NOTE 18. Operating Segments

Truist operates and measures business activity across 3three segments: CB&W, C&CB, and IH, with functional activities included in 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, ~~2021.~~2022.

During the first quarter of 2023, Truist reorganized Prime Rate Premium Finance Corporation, which includes AFCO Credit Corporation and CAFO Holding Company, into the C&CB segment from the IH segment. Prior period results have been revised to conform to the current presentation.

38 Truist Financial Corporation 35

The following table presents results by segment:


Three Months Ended March 31, (Dollars in millions)	Three Months Ended March 31, (Dollars in millions)	CB&W				C&CB				IH				OT&C (1)				Total				Three Months Ended March 31, (Dollars in millions)	CB&W				C&CB				IH				OT&C(1)				Total
		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021			2023		2022		2023		2022		2023		2022		2023		2022		2023		2022
Net interest income (expense)	Net interest income (expense)	$	1,529	$	1,753	$	1,093	$	1,208	$	24	$	24	$	537	$	300	$	3,183	$	3,285	Net interest income (expense)	$	1,601	$	1,528	$	2,308	$	1,118	$	1	$	1	$	(42)	$	536	$	3,868	$	3,183
Net intersegment interest income (expense)	Net intersegment interest income (expense)	649		231		156		72		—		—		(805)		(303)		—		—		Net intersegment interest income (expense)	1,139		656		(556)		171		13		2		(596)		(829)		—		—
Segment net interest income	Segment net interest income	2,178		1,984		1,249		1,280		24		24		(268)		(3)		3,183		3,285		Segment net interest income	2,740		2,184		1,752		1,289		14		3		(638)		(293)		3,868		3,183
Allocated provision for credit losses	Allocated provision for credit losses	74		100		(150)		(35)		—		1		(19)		(18)		(95)		48		Allocated provision for credit losses	274		74		232		(150)		—		—		(4)		(19)		502		(95)
Segment net interest income after provision	Segment net interest income after provision	2,104		1,884		1,399		1,315		24		23		(249)		15		3,278		3,237		Segment net interest income after provision	2,466		2,110		1,520		1,439		14		3		(634)		(274)		3,366		3,278
Noninterest income	Noninterest income	950		920		619		692		737		633		(164)		(48)		2,142		2,197		Noninterest income	873		910		630		656		817		733		(86)		(157)		2,234		2,142
Amortization of intangibles	Amortization of intangibles	73		79		33		38		31		27		—		—		137		144		Amortization of intangibles	69		73		31		33		36		30		—		1		136		137
Other noninterest expense	Other noninterest expense	1,846		1,836		724		737		529		453		438		440		3,537		3,466		Other noninterest expense	1,900		1,812		812		755		648		516		195		454		3,555		3,537
Income (loss) before income taxes	Income (loss) before income taxes	1,135		889		1,261		1,232		201		176		(851)		(473)		1,746		1,824		Income (loss) before income taxes	1,370		1,135		1,307		1,307		147		190		(915)		(886)		1,909		1,746
Provision (benefit) for income taxes	Provision (benefit) for income taxes	271		208		276		266		49		43		(266)		(166)		330		351		Provision (benefit) for income taxes	326		274		273		284		36		47		(241)		(275)		394		330
Segment net income (loss)	Segment net income (loss)	$	864	$	681	$	985	$	966	$	152	$	133	$	(585)	$	(307)	$	1,416	$	1,473	Segment net income (loss)	$	1,044	$	861	$	1,034	$	1,023	$	111	$	143	$	(674)	$	(611)	$	1,515	$	1,416

Identifiable assets (period end)	Identifiable assets (period end)	$	160,220	$	159,541	$	184,834	$	183,241	$	10,292	$	8,062	$	188,633	$	166,693	$	543,979	$	517,537	Identifiable assets (period end)	$	168,701	$	159,939	$	213,143	$	188,806	$	7,263	$	6,494	$	185,247	$	188,740	$	574,354	$	543,979

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

36 Truist Financial Corporation 39

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, ~~2021.~~2022.

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, 2022.

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, ~~2021~~2022 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, ~~2021~~2022 for additional disclosures.

In March ~~2022,~~2023, the FRB created the Bank Term Funding Program to support American businesses and households by making additional funding available to eligible depository institutions. This program offers loans up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging any collateral eligible for purchase by the FRB in open market operations, such as U.S. ~~enacted federal legislation~~Treasuries, U.S. agency securities, and U.S. agency mortgage-backed securities. These assets will be valued at par.

In the aftermath of the recent bank failures, we expect that the banking agencies will propose certain actions, including reforms that may impose different capital and liquidity requirements, including increased requirements to issue long term debt. In addition, there may be special assessments to repay losses to the FDIC’s Deposit Insurance Fund. It is ~~intended~~not yet possible 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 inquantify the ~~statute. While some states have already adopted LIBOR legislation, the federal legislation expressly preempts any provision~~impact of ~~any state or local law, statute, rule, regulation, or standard.~~these potential actions.

Executive Overview

~~The~~In a challenging and unique quarter for the banking industry, Truist demonstrated strength and leadership that reflects our diverse business model, granular and relationship-oriented deposit base, and strong capital and liquidity position. Truist has significant access to liquidity and a very robust liquidity management process that includes internal and external stress testing, as well as real-time monitoring of our liquidity position. We also closed on the sale of a 20% minority stake in Truist Insurance Holdings, LLC on April 3, 2023, which provides strategic and financial flexibility for both Truist and Truist Insurance Holdings.

We continued to experience the benefits of our shift from integrating to operating, including improving organic production and integrated relationship management momentum, although these benefits were offset by higher-than-expected funding costs. Asset quality metrics remain strong, and we prudently increased our ALLL ratio by three basis points to reflect increased economic uncertainty.

Our focus on clients was unwavering during the first quarter of ~~2022 marked~~2023. Our teammates continue to care for our clients and stakeholders and live our purpose to inspire and build better lives and communities. Truist continues to be a ~~pivotal turning point~~source of strength and stability for our clients and communities.

Truist asmade a $1 billion uninsured time deposit in First Republic Bank during the first quarter joining the nation’s largest financial intuitions to show support for the U.S. banking system and the economy. On Monday, May 1, 2023, JPMorgan Chase Bank, National Association assumed all of the deposits and purchased the substantial majority of assets of First Republic Bank from the FDIC. JPMorgan Chase Bank, National Association has indicated that the deposit Truist made at First Republic Bank will be repaid post-closing of the transaction.

Detailed below are actions that we ~~completed~~have taken to fulfill our ~~final core bank conversion~~purpose to inspire and ~~are positioned to focus on executional excellence. Our~~build better lives and communities, followed by a discussion of our financial results for the first quarter of 2022 were solid, though underlying results were mixed in light of market volatility and geopolitical uncertainty. The continued favorable credit environment also led to a strong credit performance and a benefit from the provision for credit losses. Revenues were lower as a result of a challenging environment for investment banking and mortgage, but we remain confident in our outlook given expectations for higher interest rates, our diverse business model, and continued expense discipline. At the same time, we acknowledge the increasing uncertainty presented by a range of geopolitical and economic risks. See below for further updates on our final integration and ESG efforts and a more detailed discussion of our first quarter financial performance.

~~Merger Integration~~

Truist completed our largest conversion event during the first quarter of 2022, transitioning nearly seven million clients to the Truist ecosystem and rebranding more than 6,000 signs at branches, ATMs, and other locations. We now operate officially as one brand and one bank to our clients. This accomplishment was possible because of the expertise, purposeful commitment, and hard work of thousands of teammates. We remain guided by our purpose as we continue supporting our clients through the transition and look forward to shifting our focus to executional excellence and purposeful growth throughout this year.

~~ESG~~

~~Environmental~~2023.

•Made meaningful improvement in our client experience, with Voice of the Client metrics rising since the second quarter of 2022, and continued positive momentum with branch satisfaction scores in the first quarter of 2023

•Opened T3 Accelerator Lab in the Innovation & Technology Center where we’re redefining the client and teammate experience, putting feedback and ideas to the test in real-world scenarios before rolling out to clients

40 Truist ~~has joined the Partnership~~Financial Corporation

•Continued growth for ~~Carbon Accounting Financials,~~Truist Momentum, Truist’s financial wellness program

•Published 2022 Corporate Responsibility Report, TCFD Report, and ~~set 2030 goals to reduce~~ESG Disclosure Summary, highlighting our progress across multiple dimensions including community, financial inclusion, DEI, and climate and energy

◦We made important progress on our sustainability commitments through 2022, including our goal of achieving a 35% reduction in both Scope 1 and Scope 2 emissions by ~~35% each,~~2030 from our baseline year of 2019. We reduced Scope 1 emissions by 17% and Scope 2 emissions by 26%.

•Successfully migrated certain consumer and small business credit cards to ~~reduce water consumption~~a new processing platform

•Announced a new goal to increase female and ethnically diverse representation in leadership roles by ~~25%~~15% and 20%, ~~relative~~respectively, by 2025

•Committed $282 million from Truist Community Capital to ~~2019.~~support affordable housing and job creation in underserved communities and $22 million through Truist Foundation for a multiyear program to strengthen small businesses and create career pathways for ethnically diverse individuals and entrepreneurs

•We ~~announced~~are also in the process of realigning our LightStream platforms with our broader consumer business, with the goal ~~to achieve net zero greenhouse gas emissions by 2050, supporting our clients’ transition to a low-carbon economy.~~

~~Truist Financial Corporation 37~~

~~Social~~

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

•~~In January 2022, Truist announced Truist One Banking, a first-of-its-kind approach~~bringing the innovation, digital capabilities, efficiencies, and certain cloud-based infrastructure of LightStream to the ~~checking account experience, designed to address clients’ direct feedback.~~broader Truist One Banking will be available to clients beginning in the summer of 2022. The Truist One checking account features will include: no overdraft fees; a $100 negative balance buffer for qualifying clients; an easily accessible, deposit-based line of credit of up to $750; and premium rewards that instantly recognize relationships and honor loyalty. In addition, Truist will offer an alternative checking account product created for clients who are new to credit and want simplicity and control without overdraft fees. It will help clients avoid high fees from check-cashing and payday lenders, bring many more households into mainstream banking, and create a pathway to upgrade to a Truist One checking account.

•~~In March 2022, Truist issued its first Social Bond Impact Report, which details the investments made from the bond proceeds and underscores the Company's commitment to advancing its ESG goals.~~

•~~In March 2022, Truist partnered with Connect Humanity to provide internet connectivity to historically marginalized communities.~~

~~Governance~~

•Truist made several leadership changes during 2022 as we continued to execute on the strategy first agreed upon in the Merger. Effective March 12, 2022, William H. Rogers, Jr. was appointed chairman of the board and Thomas E. Skains was appointed lead independent director. Rogers succeeds Kelly S. King, who stepped down from the role of chairman as previously announced. Skains succeeds David M. Ratcliffe. Both King and Ratcliffe remain on the board.

•In March 2022, Truist appointed Dontá L. Wilson to lead Retail and Small Business Banking. In his new role, Wilson will oversee Truist's branches across the Southeast, Mid-Atlantic, and Texas; ATMs; mortgage; card-based services; retail payments; deposit and loan products; small business delivery; retail loan approval channels; and brand, sports, performance, and digital marketing. Wilson assumes these responsibilities from Brant J. Standridge, who left Truist to pursue a new opportunity.

•In January 2022, Truist appointed Denise M. DeMaio as Chief Audit Officer, effective February 28, 2022. Denise joined the Executive Leadership team, leading Truist’s internal audit function, and providing counsel to senior management on emerging risk trends from the vantage points of governance, processes, technologies and reporting.client base

Financial Results

Net income available to common shareholders for the first quarter of ~~2022~~2023 of ~~$1.3~~$1.4 billion was ~~relatively stable~~up 6.3% compared with the first quarter of ~~2021.~~2022. On a diluted per common share basis, earnings for the first quarter of ~~2022~~2023 were ~~$0.99,~~$1.05, an increase of ~~$0.01~~$0.06, or 6.1%, compared to the first quarter of ~~2021.~~2022. Truist’s results of operations for the first quarter of ~~2022~~2023 produced an annualized return on average assets of ~~1.07%~~1.10% and an annualized return on average common shareholders’ equity of ~~9.0%~~10.3% compared to prior year returns of ~~1.17%~~1.07% and ~~8.7%~~9.0%, respectively.

•Results for the first quarter of 2023 included merger-related and restructuring charges of $63 million ($48 million after-tax, or $0.04 per share).

•Results for the first quarter of 2022 included ~~merger-related and restructuring charges of~~ $216 million ($166 million ~~after-tax),~~after-tax, or $0.12 per share) of merger-related and restructuring charges, $202 million ($155 million after-tax, or $0.12 per share) of incremental operating expenses related to the Merger, ~~of $202 million ($155 million after-tax),~~ a gain on the redemption of noncontrolling equity interest of $74 million($ ($57 million ~~after-tax)~~after-tax, or $0.04 per share) related to the acquisition of certain merchant services relationships, and net losses on the sales of securities of $69 million ($53 million after-tax). Results for the first quarter of 2021 included $141 million ($108 million after-tax) of merger-related and restructuring charges, $175 million ($134 million after-tax) of incremental operating expenses related to the Merger, and an acceleration of loss recognition related to certain terminated cash flow hedges of $36 million ($28 million after-tax)after-tax, or $0.04 per share).

~~On a TE basis, revenue was $5.4 billion for the first quarter of 2022, a decrease of $159 million, or 2.9%, compared to the same period in 2021. TE~~Taxable-equivalent net interest income for the first quarter of ~~2022~~2023 was ~~down $104~~up $710 million, or ~~3.1%~~22%, compared to the ~~earlier~~first quarter of 2022 primarily due to higher short-term interest rates and strong loan growth, alongside well controlled deposit costs. These increases were partially offset by lower purchase accounting accretion ~~lower~~and PPP fees, and a decrease in loan balances. These decreases were partially offset by growth in the securities portfolio and lower funding costs. Average earning assets increased $26.0 billion, or 5.9%, compared to the earlier quarter. The increase in average earning assets reflects a $30.4 billion, or 25%, increase in average securities, a $1.5 billion, or 8.7%, increase in average other earning assets, and a $1.1 billion, or 23%, increase in average interest earning trading assets, while average total loans and leases decreased $7.1 billion, or 2.4%. The growth in average earning assets is a result of the deployment of strong deposit growth resulting from fiscal and monetary stimulus. Average deposits increased $32.1 billion, or 8.4%, compared to the earlier quarter, while average long-term debt decreased $2.5 billion, or 6.6%.

revenue. Net interest margin was ~~2.76%~~3.17%, ~~down 25~~up 41 basis ~~points compared to the earlier quarter.~~ points.

•The yield on the total loan portfolio ~~for the first quarter of 2022~~ was ~~3.69%~~5.81%, ~~down 40~~up 212 basis points, ~~compared to the earlier quarter,~~primarily reflecting ~~the impact of~~higher market interest rates, partially offset by lower purchase accounting accretion ~~lower~~and PPP ~~fees, and the ongoing impact of the lower rate environment.~~revenue. The yield on the average securities portfolio was ~~1.68%~~2.14%, up 2346 basis points ~~compared to the earlier quarter~~ primarily due to the higher ~~yields~~rate environment. The average cost of total deposits was 1.12%, up 109 basis points.

•The average cost of short-term borrowings was 4.69%, up 409 basis points. The average cost of long-term debt was 4.05%, up 255 basis points. The increase in rates on ~~new purchases~~deposits and ~~lower premium amortization.~~other funding sources was largely attributable to the higher rate environment.

~~38 Truist Financial Corporation~~

~~The provision for credit losses~~Noninterest income was ~~a benefit of $95~~up $92 million, or 4.3%, compared to ~~a cost of $48 million for the earlier quarter. The current quarter includes a reserve release due to the continued favorable credit environment. Net charge-offs for~~ the first quarter of 2022 ~~totaled $178 million compared~~due to ~~$238 million~~12% growth in ~~the earlier quarter. The net charge-off ratio for the current quarter of 0.25% was down eight basis points compared to the earlier quarter.~~

~~Noninterest~~insurance income, ~~for the first quarter of 2022 decreased $55 million, or 2.5%, compared to the earlier quarter.~~higher mortgage banking income, higher fees from lending-related activities and card and payment related activities. These items were partially offset by lower other income. The first quarter of 2022 ~~includes net~~included $69 million of securities losses ~~of $69~~and a $74 million ~~and the~~ gain on the redemption of noncontrolling equity interest ~~(other~~(included in other income) ~~of $74 million. The earlier quarter included a gain of $37 million from the divestiture of certain businesses (other income)~~. Excluding the aforementioned items, noninterest income was down $23 million, or 1.1%. Insurance income increased $101 million, or 16%, due to continued organic growth and acquisitions. Investment banking and trading income decreased $85 million, or 25%, due to lower high yield bond and equity originations fees, lower core trading income, and lower CVA gains, partially offset by higher structured real estate fees. Residential mortgage income decreased $11 million, or 11%, as lower production income (due to margins and refinance volumes) was largely offset by higher servicing income (due to lower prepayments). Excluding the gain on the redemption of noncontrolling equity interest, the gain in the earlier quarter from the divestiture of certain businesses and a $67 million decrease for assets held for certain post-retirement benefits, which is primarily offset by lower personnel expense, other income increased $56 million, due to higher investment income from the Company's SBIC and other investments.

Noninterest expense ~~for~~was up $17 million, or 0.5%, compared to the first quarter of 2022 ~~was up $64 million, or 1.8%, compared~~due to ~~the earlier quarter.~~higher personnel expense, other expense, and regulatory costs. These increases were partially offset by lower merger-related and restructuring charges and professional fees and outside processing expenses. Merger-related and restructuring charges ~~increased $75 million due to costs for client day one conversions. Incremental~~and incremental operating expenses related to the ~~Merger increased $27~~merger decreased $153 million ~~primarily reflected in net occupancy expense in connection with updating~~and $202 million, respectively, due to the ~~branch network to incorporate the Truist brand. The prior quarter also includes $36 million~~completion of ~~expense associated with an acceleration of loss recognition related to certain terminated cash flow hedges and a small gain on the extinguishment of debt. Excluding the aforementioned items~~integration-related activities. Adjusted noninterest expenses, which exclude merger-related costs and the amortization of intangibles ~~adjusted noninterest expense was relatively stable compared to the earlier quarter. Personnel expense decreased $91~~increased $373 million, or 4.2%, due to lower other employee benefits as a result of the decrease in noninterest income for post-retirement benefits, lower incentives (due to declines in noninterest income), and lower salaries driven by fewer FTEs. Additionally, other expense increased $29 million due to increased operational losses, software expense increased $22 million, and marketing and customer development expense increased $18 million due to increased branding efforts.12%.

The provision for income taxes was ~~$330~~$394 million for the first quarter of ~~2022,~~2023, compared to ~~$351~~$330 million for the earlier quarter. The effective tax rate for the first quarter of ~~2022~~2023 was ~~18.9%~~20.6%, compared to ~~19.2%~~18.9% for the earlier ~~quarter, primarily due to discrete tax expenses resulting from the divestiture of certain businesses in the prior year.~~

Truist’s total assets at March 31, 2022 were $544.0 billion, an increase of $2.7 billion, or 0.5%, compared to December 31, 2021. Total deposits at March 31, 2022 were $428.3 billion, an increase of $11.8 billion, or 2.8%, compared to December 31, 2021. In April 2022, Truist redeemed $800 million notional of FHLB advances, which resulted in a gain on early extinguishment of long-term debt of $39 million.

~~Truist transferred $59.4 billion of AFS securities to HTM as the Company continues to execute upon its asset-liability management strategies.~~quarter.

Asset quality remains excellent, reflecting Truist’s prudent risk culture and diverse ~~portfolio,~~portfolio. Nonperforming loans and ~~the continued favorable credit environment.~~leases held for investment were 0.36% of loans and leases held for investment at March 31, 2023, flat compared to December 31, 2022.

Truist ~~maintained~~Financial Corporation 41

•The allowance for credit losses was $4.8 billion and includes $4.5 billion for the allowance for loan and lease losses and $282 million for the reserve for unfunded commitments. The ALLL ratio was 1.37%, up three basis points compared with December 31, 2022 primarily due to increased economic uncertainty.

•The provision for credit losses was $502 million compared to a benefit of $95 million for the first quarter of 2022. The increase in the current quarter provision expense primarily reflects increased economic uncertainty in the current period, whereas the earlier quarter included a reserve release due to the improving credit environment during that period.

•The net charge-off ratio was 37 basis points, up 12 basis points compared to the first quarter of 2022 driven by higher charge-offs in the indirect auto and other consumer portfolios due to normalizing trends, as well as an increase in the commercial and industrial portfolio.

Capital and liquidity remained strong ~~capital and liquidity. As~~compared to the regulatory requirements for well capitalized banks.

•Truist CET1 ratio was 9.1% as of March 31, 2023. The increase since December 31, 2022 represents organic capital generation, partially offset by the ~~CET1 ratio was 9.4% and~~CECL phase-in.

•Truist closed the ~~average LCR was 111%. The 20~~sale of the minority stake in TIH on April 3, 2023, which adds 30 basis ~~point decline compared~~points to the ~~fourth quarter 2021 CET1 ratio reflects~~risk-based regulatory capital deployed through the acquisition of Kensington Vanguard National Land Services, the acquisition of certain merchant services relationships, an increase in risk-weighted assets, and the impact from the phase-in of the CECL transition relief. Additionally, the Company had $1.7 billion of senior long-term debt maturities and redemptions. ratios.

•Truist declared common dividends of ~~$0.48~~$0.52 per share during the first quarter of 2023. The dividend payout ratio for the first quarter of 2023 was 49%. Truist did not repurchase any shares in the first quarter of ~~2022, resulting~~2023.

•Truist’s average consolidated LCR was 113% for the three months ended March 31, 2023, compared to the regulatory minimum of 100%.

•Truist has significant and strong access to liquidity with $166 billion of available liquidity as of March 31, 2023.

•Truist increased its cash position in ~~dividend and total payout ratios of 48%.~~response to market events.

~~Truist Financial Corporation 39~~•AOCI improved by $1.0 billion, or 7.5%, since December 31, 2022.

Analysis of Results of Operations

Net Interest Income and NIM

~~First Quarter 2022 compared to First Quarter 2021~~

~~Net~~Taxable-equivalent net interest income for the first quarter of ~~2022~~2023 was ~~down $104~~up $710 million, or ~~3.1%~~22%, compared to the ~~earlier~~first quarter of 2022 primarily due to higher short-term interest rates and strong loan growth, alongside well controlled deposit costs. These increases were partially offset by lower purchase accounting accretion ~~lower~~and PPP ~~fees, and a decrease in loan balances. These decreases were partially offset by growth in the securities portfolio and lower funding costs.~~ revenue. Net interest margin was 3.17%, up 41 basis points.

•Average earning assets increased ~~$26.0~~$29.2 billion, or ~~5.9%~~6.2%, ~~compared~~primarily due to ~~the earlier quarter. The~~growth in average total loans of $35.1 billion, or 12%, and growth in other earning assets of $6.7 billion, or 35%, primarily due to an increase in ~~average earning assets reflects~~balances held at the Federal Reserve to support liquidity build, partially offset by a ~~$30.4 billion, or 25%, increase~~decrease in average securities ~~a $1.5~~of $12.1 billion, or ~~8.7%, increase in average other earning assets, and a $1.1 billion, or 23%, increase in average interest earning trading assets, while average total loans and leases decreased $7.1 billion, or 2.4%~~7.9%. The growth in average earning assets is a result of the deployment of strong deposit growth resulting from fiscal and monetary stimulus. Average deposits increased $32.1 billion, or 8.4%, compared to the earlier quarter, while average long-term debt decreased $2.5 billion, or 6.6%.

•

~~Net interest margin was 2.76%, down 25 basis points compared to the earlier quarter.~~ The yield on the total loan portfolio ~~for the first quarter of 2022~~ was ~~3.69%~~5.81%, ~~down 40~~up 212 basis points, ~~compared to the earlier quarter,~~primarily reflecting ~~the impact of~~higher market interest rates, partially offset by lower purchase accounting accretion ~~lower~~and PPP ~~fees, and the ongoing impact of the lower rate environment.~~revenue. The yield on the average securities portfolio was ~~1.68%~~2.14%, up 2346 basis points ~~compared to the earlier quarter~~ primarily due to the higher ~~yields on new purchases and lower premium amortization.~~rate environment.

•Average deposits decreased $6.8 billion, or 1.6%, average short-term borrowings increased $17.1 billion, and average long-term debt increased $15.7 billion, or 44.5%.

•The average cost of total deposits was ~~0.03%~~1.12%, ~~down two~~up 109 basis ~~points compared to the earlier quarter.~~points. The average cost of short-term borrowings was ~~0.60%~~4.69%, ~~down 22~~up 409 basis ~~points compared to the earlier quarter.~~points. The average cost of long-term debt was ~~1.50%~~4.05%, ~~down seven~~up 255 basis ~~points compared~~points. The increase in rates on deposits and other funding sources was largely attributable to the ~~earlier quarter. The lower rates on interest-bearing liabilities reflect the impact of repricing of liabilities at lower rates.~~higher rate environment.

As of March 31, 2023, the remaining unamortized fair value marks on the loan and lease portfolio and long-term debt were $673 million and $69 million, respectively. As of December 31, 2022, the remaining unamortized fair value marks on the loan and lease portfolio ~~deposits,~~ and long-term debt were ~~$1.1 billion, $5~~$741 million and ~~$122 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 $1.3 billion, $7 million, and $139~~$81 million, respectively.

The remaining unamortized purchase accounting fair value mark on loans and leases ~~consist~~consists of ~~$624~~$447 million for consumer loans and leases, and ~~$495~~$226 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


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

Table 1: Taxable-Equivalent Net Interest Income and Rate / Volume Analysis																						Table 1: Taxable-Equivalent Net Interest Income and Rate / Volume Analysis
Three Months Ended March 31, (Dollars in millions)	Three Months Ended March 31, (Dollars in millions)	Average Balances (5)				Annualized Yield/Rate				Income/Expense				Incr. (Decr.)			Change due to					Three Months Ended March 31, (Dollars in millions)	Average Balances(1)						Annualized Yield/Rate(2)						Income/Expense					Incr. (Decr.)			Change due to
		2022		2021		2022		2021		2022		2021				Rate			Volume	2023					2022			2023			2022			2023			2022					Rate			Volume
Assets	Assets																							Assets
Total securities, at amortized cost: (2)
AFS and HTM securities at amortized cost:																						AFS and HTM securities at amortized cost:
U.S. Treasury	U.S. Treasury	$	9,890	$	1,759	0.72	%	0.89	%	$	18	$	4	$	14		$	(1)		$	15	U.S. Treasury	$	11,117		$	9,890		1.07	%		0.72	%		$	30		$	18	$	12		$	10		$	2
GSE	GSE	1,120		1,839		2.13		2.33		6		11		(5)			(1)			(4)		GSE	335			1,120			2.86			2.13			2			6		(4)			2			(6)
Agency MBS	Agency MBS	137,052		118,171		1.72		1.44		590		426		164			90			74		Agency MBS	124,746			137,052			2.23			1.72			694			590		104			160			(56)
States and political subdivisions	States and political subdivisions	374		444		3.72		3.52		3		4		(1)			—			(1)		States and political subdivisions	425			374			4.07			3.72			4			3		1			—			1
Non-agency MBS	Non-agency MBS	4,224		—		2.25		—		24		—		24			—			24		Non-agency MBS	3,907			4,224			2.34			2.25			23			24		(1)			1			(2)
Other	Other	27		33		2.04		1.92		—		—		—			—			—		Other	21			27			5.30			2.04			—			—		—			—			—

Total securities	Total securities	152,687		122,246		1.68		1.45		641		445		196			88			108		Total securities	140,551			152,687			2.14			1.68			753			641		112			173			(61)
Interest earning trading assets	Interest earning trading assets	5,837		4,742		3.04		2.79		43		32		11			3			8		Interest earning trading assets	5,462			5,837			6.09			3.04			83			43		40			43			(3)
Other earning assets (3)	Other earning assets (3)	18,932		17,417		0.63		0.37		30		16		14			13			1		Other earning assets(3)	25,589			18,932			4.67			0.63			295			30		265			251			14
Loans and leases, net of unearned income: (4)
Loans and leases, net of unearned income:																						Loans and leases, net of unearned income:

Commercial and industrial	Commercial and industrial	138,872		141,026		2.88		3.14		987		1,093		(106)			(90)			(16)		Commercial and industrial	165,095			138,872			5.98			2.88			2,436			987		1,449			1,233			216
CRE	CRE	23,555		26,211		2.84		2.90		168		189		(21)			(4)			(17)		CRE	22,689			23,555			6.32			2.84			355			168		187			193			(6)
Commercial Construction	Commercial Construction	5,046		6,557		3.05		3.04		35		48		(13)			—			(13)		Commercial Construction	5,863			5,046			7.14			3.05			101			35		66			59			7

Residential mortgage	Residential mortgage	47,976		45,823		3.57		4.42		428		507		(79)			(102)			23		Residential mortgage	56,422			47,976			3.73			3.57			526			428		98			20			78
Residential home equity and direct		24,883		25,658		5.38		5.81		330		368		(38)			(27)			(11)
Home equity																						Home equity	10,735			10,822			6.80			4.33			180			116		64			65			(1)
Indirect auto	Indirect auto	26,088		26,363		5.56		6.56		357		426		(69)			(65)			(4)		Indirect auto	27,743			26,088			5.82			5.56			398			357		41			17			24
Indirect other		10,860		10,848		6.32		6.98		169		187		(18)			(18)			—
Other consumer																						Other consumer	27,559			24,921			6.76			6.24			459			383		76			33			43
Student	Student	6,648		7,519		3.86		3.96		63		73		(10)			(2)			(8)		Student	5,129			6,648			7.04			3.86			89			63		26			43			(17)
Credit card	Credit card	4,682		4,645		8.97		9.24		104		106		(2)			(3)			1		Credit card	4,785			4,682			11.43			8.97			136			104		32			30			2

Total loans and leases HFI	Total loans and leases HFI	288,610		294,650		3.70		4.11		2,641		2,997		(356)			(311)			(45)		Total loans and leases HFI	326,020			288,610			5.81			3.70			4,680			2,641		2,039			1,693			346
LHFS	LHFS	3,874		4,891		2.87		2.59		28		32		(4)			3			(7)		LHFS	1,527			3,874			6.71			2.87			25			28		(3)			21			(24)
Total loans and leases	Total loans and leases	292,484		299,541		3.69		4.09		2,669		3,029		(360)			(308)			(52)		Total loans and leases	327,547			292,484			5.81			3.69			4,705			2,669		2,036			1,714			322
Total earning assets	Total earning assets	469,940		443,946		2.90		3.20		3,383		3,522		(139)			(204)			65		Total earning assets	499,149			469,940			4.72			2.90			5,836			3,383		2,453			2,181			272
Nonearning assets	Nonearning assets	66,041		64,887																		Nonearning assets	60,478			66,041
Total assets	Total assets	$	535,981	$	508,833																	Total assets	$	559,627		$	535,981
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	$	112,159	$	104,744	0.05		0.06		14		15		(1)			(2)			1		Interest-checking	$	108,886		$	112,159		1.60			0.05			430			14		416			416			—
Money market and savings	Money market and savings	141,500		129,303		0.03		0.03		11		10		1			—			1		Money market and savings	139,802			141,500			1.38			0.03			476			11		465			465			—
Time deposits	Time deposits	15,646		20,559		0.18		0.44		7		22		(15)			(11)			(4)		Time deposits	28,671			15,646			3.10			0.18			219			7		212			202			10

Total interest-bearing deposits (6)		269,305		254,606		0.05		0.07		32		47		(15)			(13)			(2)
Total interest-bearing deposits																						Total interest-bearing deposits	277,359			269,305			1.64			0.05			1,125			32		1,093			1,083			10
Short-term borrowings	Short-term borrowings	6,944		6,731		0.60		0.82		10		14		(4)			(4)			—		Short-term borrowings	24,056			6,944			4.69			0.60			278			10		268			197			71
Long-term debt	Long-term debt	35,337		37,820		1.50		1.57		132		148		(16)			(6)			(10)		Long-term debt	51,057			35,337			4.05			1.50			514			132		382			303			79
Total interest-bearing liabilities	Total interest-bearing liabilities	311,586		299,157		0.22		0.28		174		209		(35)			(23)			(12)		Total interest-bearing liabilities	352,472			311,586			2.20			0.22			1,917			174		1,743			1,583			160
Noninterest-bearing deposits (6)		145,933		128,579
Noninterest-bearing deposits																						Noninterest-bearing deposits	131,099			145,933
Other liabilities	Other liabilities	11,664		11,050																		Other liabilities	13,979			11,664
Shareholders’ equity	Shareholders’ equity	66,798		70,047																		Shareholders’ equity	62,077			66,798
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	535,981	$	508,833																	Total liabilities and shareholders’ equity	$	559,627		$	535,981
Average interest-rate spread	Average interest-rate spread					2.68	%	2.92	%													Average interest-rate spread							2.52	%		2.68	%
NIM/net interest income - taxable equivalent	NIM/net interest income - taxable equivalent					2.76	%	3.01	%	$	3,209	$	3,313	$	(104)		$	(181)		$	77	NIM/net interest income - taxable equivalent							3.17	%		2.76	%		$	3,919		$	3,209	$	710		$	598		$	112
Taxable-equivalent adjustment	Taxable-equivalent adjustment									$	26	$	28									Taxable-equivalent adjustment													$	51		$	26
Memo: Total deposits																						Memo: Total deposits	$	408,458		$	415,238		1.12	%		0.03	%		$	1,125		$	32	$	1,093

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

(2)Yields are stated on a TE basis utilizing federal tax rate. The change in interest not solely due to changes in rate or volume has been allocated based on the pro-rata absolute dollar amount of each. Interest income includes certain fees, deferred costs, and dividends.

~~(2) 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% and 0.05% for the three months ended March 31, 2022 and 2021, respectively.~~

Truist Financial Corporation 4143

Provision for Credit Losses

~~First Quarter 2022 compared to First Quarter 2021~~

The provision for credit losses was $502 million compared to a benefit of $95 million for the first quarter of 2022. The net charge-off ratio was 37 basis points, up 12 basis points compared to ~~a cost~~the first quarter of ~~$48 million for~~2022.

•The increase in the current quarter provision expense primarily reflects increased economic uncertainty in the current period, whereas the earlier ~~quarter. The current~~ quarter ~~includes~~included a reserve release due to the ~~continued favorable~~improving credit ~~environment. Net charge-offs for~~environment during that period.

•The net charge-off ratio was up compared to the first quarter of 2022 ~~totaled $178 million compared to $238 million~~driven by higher charge-offs in the ~~earlier quarter. The net charge-off ratio for~~indirect auto and other consumer portfolios due to normalizing trends, as well as an increase in the ~~current quarter of 0.25% was down eight basis points compared to the earlier quarter.~~commercial and industrial portfolio.

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


Table 2: Noninterest Income	Table 2: Noninterest Income		Table 2: Noninterest Income
		Three Months Ended March 31,					Three Months Ended March 31,

(Dollars in millions)	(Dollars in millions)		2022		2021			% Change		(Dollars in millions)	2023		2022		% Change

Insurance income	Insurance income		$	727	$	626		16.1	%	Insurance income	$	813	$	727	11.8	%
Wealth management income										Wealth management income	339		343		(1.2)
Investment banking and trading income	Investment banking and trading income		261		346			(24.6)		Investment banking and trading income	261		261		—
Wealth management income			343		341			0.6
Service charges on deposits	Service charges on deposits		252		258			(2.3)		Service charges on deposits	249		252		(1.2)
Card and payment related fees	Card and payment related fees		212		200			6.0		Card and payment related fees	230		212		8.5
Residential mortgage income			89		100			(11.0)
Mortgage banking income										Mortgage banking income	142		121		17.4
Lending related fees	Lending related fees		85		100			(15.0)		Lending related fees	106		85		24.7
Operating lease income	Operating lease income		58		68			(14.7)		Operating lease income	67		58		15.5
Commercial mortgage income			32		33			(3.0)
Income from bank-owned life insurance			51		50			2.0
Securities gains (losses)	Securities gains (losses)		(69)		—			NM		Securities gains (losses)	—		(69)		NM
Other income	Other income		101		75			34.7		Other income	27		152		(82.2)
Total noninterest income	Total noninterest income		$	2,142	$	2,197		(2.5)		Total noninterest income	$	2,234	$	2,142	4.3

~~First Quarter 2022~~Noninterest income was up $92 million, or 4.3%, compared to ~~First Quarter 2021~~

~~Noninterest income for~~ the first quarter of 2022 ~~decreased $55 million, or 2.5%, compared~~due to ~~the earlier quarter.~~12% growth in insurance income, higher mortgage banking income, higher fees from lending-related activities and card and payment related activities. These items were partially offset by lower other income. The first quarter of 2022 ~~includes net~~included $69 million of securities losses ~~of $69~~and a $74 million ~~and the~~ gain on the redemption of noncontrolling equity interest ~~(other~~(included in other income) ~~of $74 million. The earlier quarter included a gain of $37 million from the divestiture of certain businesses (other income)~~. ~~Excluding the aforementioned items, noninterest income was down $23 million, or 1.1%.~~

•Insurance income increased ~~$101 million, or 16%,~~primarily due to ~~continued~~acquisitions and 4.7% organic ~~growth and acquisitions. Investment~~growth.

•Mortgage banking ~~and trading~~ income ~~decreased $85 million, or 25%,~~increased due to ~~lower high yield bond and equity originations fees, lower core trading income, and lower CVA gains,~~a gain on the sale of a servicing portfolio, partially offset by mortgage servicing rights valuation adjustments in the current quarter.

•Lending related fees increased primarily due to higher ~~structured real estate~~unused commitment fees. ~~Residential mortgage~~

•Card and payment related fees increased due to higher volumes and the acquisition of a merchant portfolio.

•Other income decreased ~~$11 million, or 11%, as lower production income (due~~due to ~~lower margins and refinance volumes) was largely offset by higher servicing income (due to lower prepayments). Excluding~~ the ~~gain on the redemption of noncontrolling equity interest, the~~aforementioned gain in the ~~earlier~~year ago quarter, ~~from the divestiture of certain businesses and a $67 million decrease for assets held for certain post-retirement benefits, which is primarily offset by~~ lower ~~personnel expense, other income increased $56 million, due to higher~~ investment income from the Company’s SBIC and other ~~investments.~~investments, partially offset by higher income from investments held for certain post-retirement benefits (which is primarily offset by higher personnel expense).

4244 Truist Financial Corporation

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 March 31,				Three Months Ended March 31,

(Dollars in millions)	(Dollars in millions)			2022			2021		% Change		(Dollars in millions)	2023		2022		% Change

Personnel expense	Personnel expense			$	2,051		$	2,142	(4.2)	%	Personnel expense	$	2,181	$	2,051	6.3	%
Professional fees and outside processing	Professional fees and outside processing			363			350		3.7		Professional fees and outside processing	314		363		(13.5)
Software expense	Software expense			232			210		10.5		Software expense	214		232		(7.8)
Net occupancy expense	Net occupancy expense			208			209		(0.5)		Net occupancy expense	183		208		(12.0)
Amortization of intangibles	Amortization of intangibles			137			144		(4.9)		Amortization of intangibles	136		137		(0.7)
Equipment expense	Equipment expense			118			113		4.4		Equipment expense	110		118		(6.8)
Marketing and customer development	Marketing and customer development			84			66		27.3		Marketing and customer development	78		84		(7.1)
Operating lease depreciation	Operating lease depreciation			48			50		(4.0)		Operating lease depreciation	46		48		(4.2)
Loan-related expense				44			54		(18.5)
Regulatory costs	Regulatory costs			35			25		40.0		Regulatory costs	75		35		114.3
Merger-related and restructuring charges	Merger-related and restructuring charges			216			141		53.2		Merger-related and restructuring charges	63		216		(70.8)
Loss (gain) on early extinguishment of debt				—			(3)		(100.0)

Other expense	Other expense			138			109		26.6		Other expense	291		182		59.9
Total noninterest expense	Total noninterest expense			$	3,674		$	3,610	1.8		Total noninterest expense	$	3,691	$	3,674	0.5

~~First Quarter 2022~~Noninterest expense was up $17 million, or 0.5%, compared to ~~First Quarter 2021~~

~~Noninterest expense for~~ the first quarter of 2022 ~~was up $64 million, or 1.8%, compared~~due to ~~the earlier quarter.~~higher personnel expense, other expense, and regulatory costs. These increases were partially offset by lower merger-related and restructuring charges and professional fees and outside processing expenses. Merger-related and restructuring charges ~~increased $75 million due to costs for client day one conversions. Incremental~~and incremental operating expenses related to the merger ~~increased $27~~decreased $153 million ~~primarily reflected in net occupancy expense in connection with updating~~and $202 million, respectively, due to the ~~branch network to incorporate the Truist brand. The prior quarter also includes $36 million~~completion of ~~expense associated with an acceleration of loss recognition related to certain terminated cash flow hedges and a small gain on the extinguishment of debt. Excluding the aforementioned items~~integration-related activities. Adjusted noninterest expenses, which exclude merger-related costs and the amortization of intangibles ~~adjusted noninterest expense was relatively stable compared to the earlier quarter.~~ increased $373 million, or 12%.

•Personnel expense increased due to investments in teammates by increasing Truist’s minimum wage, the impact from acquisitions, investments in revenue producing businesses and enterprise technology, and higher other post-retirement benefit expense (which is almost entirely offset by higher other income), partially offset by lower pension expenses.

•Other expense increased primarily due to higher pension expense (driven primarily by lower plan assets) and higher operating losses.

•Regulatory costs increased primarily due to an increase in the FDIC’s deposit insurance assessment rate.

•Professional fees and outside processing expenses decreased ~~$91 million, or 4.2%,~~ due to lower ~~other employee benefits as a result of the decrease in noninterest income~~project spend for ~~post-retirement benefits, lower incentives (due to declines in noninterest income), and lower salaries driven~~merger-related activities, partially offset by fewer FTEs. Additionally, other expense increased $29 million due to increased operational losses, software expense increased $22 million, and marketing and customer development expense increased $18 million due to increased branding efforts.enterprise technology investments.

Merger-Related and Restructuring Charges

The following table presents a summary of merger-related and restructuring charges and the related accruals. The ~~2022 and 2021~~2023 merger-related and restructuring costs primarily reflect charges as a result of the ~~Merger,~~restructuring activities, 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 March 31, 2022

(Dollars in millions)	(Dollars in millions)			Accrual at Jan 1, 2022		Expense		Utilized					Accrual at Mar 31, 2022						(Dollars in millions)		Accrual at Jan 1, 2023		Expense		Utilized		Accrual at Mar 31, 2023
Severance and personnel-related	Severance and personnel-related			$	77	$	37	$	(72)				$	42					Severance and personnel-related		$	9	$	39	$	(31)	$	17
Occupancy and equipment	Occupancy and equipment			—		98		(98)					—						Occupancy and equipment		—		19		(19)		—
Professional services	Professional services			37		64		(64)					37						Professional services		12		1		(12)		1
Systems conversion and related costs				—		20		(17)					3

Other	Other			12		(3)		(2)					7						Other		5		4		(5)		4
Total (1)				$	126	$	216	$	(253)				$	89
Total										Total	$	26			$	63	$	(67)		$	22

~~(1)~~

Provision for Income Taxes

~~Related to the Merger, the Company recognized $208~~

The provision for income taxes was $394 million for the ~~three months ended March 31, 2022. At March 31,~~first quarter of 2023, compared to $330 million for the earlier quarter. The effective tax rate for the first quarter of 2023 was 20.6%, compared to 18.9% for the earlier quarter.

•The effective tax rate increased compared to the first quarter of 2022 primarily driven by higher income before taxes, discrete tax expense recognized in the ~~Company had an accrual~~current quarter compared to discrete tax benefits recognized in the prior quarter, and the adoption of ~~$81 million~~the Investments in Tax Credit Structures accounting standard related to the ~~Merger.~~proportional amortization of tax credit investments in the current quarter. This guidance resulted in an increase in other income and an increase in tax expense of $17 million for the first quarter of 2023 with no impact to net income. The ~~remaining expense~~guidance was adopted prospectively and ~~accrual relate~~had no impact on prior periods results. Refer to ~~other restructuring activities.~~“Note 1. Basis of Presentation” for additional information on the adoption of this guidance.

Truist Financial Corporation 4345

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. During the first quarter of 2023, Truist reorganized Prime Rate Premium Finance Corporation, which includes AFCO Credit Corporation and CAFO Holding Company, into the C&CB segment from the IH segment. Prior period results have been revised to conform to the current presentation.

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, ~~2021~~2022 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 March 31,
(Dollars in millions) 2022 2021 % Change
Consumer Banking and Wealth $ 864 $ 681 26.9 %
Corporate and Commercial Banking 985 966 2.0
Insurance Holdings 152 133 14.3
Other, Treasury & Corporate (585) (307) (90.6)
Truist Financial Corporation $ 1,416 $ 1,473 (3.9)


Table 5: Net Income by Reportable Segment
	Three Months Ended March 31,
(Dollars in millions)	2023		2022		% Change
Consumer Banking and Wealth	$	1,044	$	861	21.3	%
Corporate and Commercial Banking	1,034		1,023		1.1
Insurance Holdings	111		143		(22.4)
Other, Treasury & Corporate	(674)		(611)		(10.3)
Truist Financial Corporation	$	1,515	$	1,416	7.0

~~First Quarter 2022 compared to First Quarter 2021~~

Consumer Banking and Wealth

CB&W net income was ~~$864 million~~$1.0 billion for the first quarter of ~~2022,~~2023, an increase of $183 million compared to the ~~earlier quarter.~~ first quarter of 2022.

•Segment net interest income increased ~~$194~~$556 million primarily driven by ~~higher interest rates,~~ favorable funding credit on deposits attributable to the higher rate environment and ~~increased deposit~~higher average loan balances, partially offset by higher funding costs, lower average deposits, and lower purchase accounting accretion.

•The ~~allocated~~ provision for credit losses ~~decreased $26~~increased $200 million reflecting increased economic uncertainty in the ~~impact of a larger allowance release than the earlier~~current quarter as well as ~~lower~~higher charge ~~offs.~~ offs in the indirect auto and other consumer portfolios and a reserve release in the earlier quarter.

•Noninterest income ~~increased $30~~decreased $37 million compared to ~~the~~ earlier quarter primarily due to ~~the~~a gain on the redemption of noncontrolling equity interest in the ~~current~~earlier quarter, ~~as well as an increase in card and payment fees driven by increased sales volume,~~ partially offset by ~~a gain from the divestiture of certain businesses~~higher mortgage banking income in the ~~earlier quarter and lower residential mortgage income.~~ current quarter.

•Noninterest expense ~~was flat~~increased $84 million compared to the earlier ~~quarter.~~quarter primarily driven primarily by higher corporate technology, risk, and operations support expenses along with increased salaries expense, partially offset by lower marketing and customer development and incentives expense.

CB&W average loans and leases held for investment ~~decreased $1.8~~increased $11.2 billion, or ~~1.4%~~8.5%, for the first quarter of ~~2022~~2023 compared to the ~~earlier~~first quarter of 2022, primarily driven by ~~lower~~an increase in residential mortgage ~~warehouse~~ balances ~~home equity~~due to slower run-off and ~~other direct consumer lending as well as lower student lending~~increased correspondent production, along with ~~lower partnership balances net of~~increased Service Finance ~~balances resulting from acquisition,~~and Dealer Finance loans, partially offset by ~~increased residential mortgage balances~~lower Student and recreational lending. Average mortgage warehouse loans, home equity and other direct consumer loans, student lending balances, and partnership balances net of Service Finance balances resulting from acquisition declined $2.7 billion, or 51%, $947 million, or 5.2%, $871 million, or 12%, and $211 million, or 6.0%, respectively, while residential mortgage and recreational lending balances increased $2.1 billion, or 4.7%, and $193 million, or 6.6%, respectively.Partnership loans.

Average total deposits ~~increased $22.6~~decreased $14.4 billion, or ~~9.8%~~5.7%, for the first quarter of ~~2022~~2023 compared to the ~~earlier~~first quarter of 2022, primarily driven by ~~the impact of fiscal and monetary stimulus. Average~~decreases in interest bearing checking, money market and savings, ~~accounts, interest checking accounts,~~ and ~~noninterest-bearing deposits increased $10.1 billion, or 10%, $8.5 billion, or 17%, and $8.3 billion, or 13%, respectively, partially offset by a decline in time deposits of $4.3 billion, or 23%.~~noninterest bearing deposits.

Corporate and Commercial Banking

C&CB net income was ~~$985 million~~$1.0 billion for the first quarter of ~~2022,~~2023, an increase of ~~$19~~$11 million compared to the ~~earlier quarter.~~ first quarter of 2022.

•Segment net interest income ~~decreased $31~~increased $463 million primarily due to ~~lower fee income associated with PPP loan forgiveness and lower purchase accounting accretion, partially offset by~~ higher funding credit on deposits and ~~increases to noninterest-bearing deposit balances.~~ higher average loan balances, partially offset by lower purchase accounting accretion and lower PPP revenue.

•The ~~allocated~~ provision for credit losses ~~decreased $115~~increased $382 million ~~primarily reflecting a reserve release due to continued favorable credit environment~~which reflects an increase in reserves driven by increased economic uncertainty and ~~lower charge offs~~loan growth in the current quarter as well as an allowance release in the earlier quarter.

•Noninterest income decreased ~~$73~~$26 million compared to the earlier quarter primarily due to lower ~~high yield bond and equity originations fees, lower credit trading income, and lower CVA mark to market gains, partially offset by higher structured real estate fees as well as higher~~ investment income from the Company’s SBIC and other ~~investments.~~ investments, lower structured real estate fees, and commercial mortgage income, partially offset by increases in lending related fees, core trading revenues, and merger and acquisition fees.

•Noninterest expense ~~decreased $18~~increased $55 million ~~driven by lower professional fees and intangible amortization expense in the current quarter.~~

~~C&CB average loans held for investment decreased $3.7 billion, or 2.4%, for the first quarter of 2022~~ compared to the earlier quarter primarily due to ~~PPP loan forgiveness. Excluding PPP loans, Corporate~~higher personnel expenses, and ~~Commercial Banking average loans held for investment increased $4.6 billion, or 3.1%.~~merger-related and restructuring charges.

4446 Truist Financial Corporation

~~Average total deposits~~C&CB average loans held for investment increased ~~$7.8~~$26.7 billion, or ~~5.4%~~17%, for the first quarter of ~~2022~~2023 compared to the ~~earlier~~first quarter of 2022, primarily due to ~~the impact of fiscal~~increases in commercial and ~~monetary stimulus.~~ industrial loans, partially offset by decreases in average PPP loans (commercial and industrial) and average commercial real estate.

Average ~~noninterest-bearing~~total deposits ~~increased $9.0~~decreased $11.4 billion, or ~~14%~~7.5%, ~~while interest~~for the first quarter of 2023 compared to the first quarter of 2022, primarily due to declines in average noninterest bearing deposits, ~~decreased $1.2 billion, or 1.5%.~~partially offset by increases in money market and savings.

Insurance Holdings

IH net income was ~~$152~~$111 million for the first quarter of ~~2022, an increase~~2023, a decrease of ~~$19~~$32 million compared to the ~~earlier quarter.~~ first quarter of 2022.

•Segment net interest income increased $11 million driven primarily by favorable funding credits.

•Noninterest income increased ~~$104~~$84 million primarily due to continued organic growth and acquisitions.

•Noninterest expense increased ~~$80~~$138 million primarily due to the impact of acquisitions, investments in new hires and teammates, performance-driven incentive expense, and higher ~~performance-based incentives and salaries.~~operational loss reserves.

Other, Treasury & Corporate

OT&C generated a net loss of ~~$585~~$674 million in the first quarter of ~~2022,~~2023, compared to a net loss of ~~$307~~$611 million in the ~~earlier quarter.~~ first quarter of 2022.

•Net interest income decreased ~~$265~~$345 million primarily due to higher funding credit on deposits to other segments, partially offset by higher ~~earnings in~~funding charges to other segments from the ~~securities portfolio from~~ higher ~~yields on new purchases and lower premium amortization.~~ rate environment.

•The ~~allocated~~ provision for credit losses ~~was flat~~increased $15 million due to increased economic uncertainty in the current quarter.

•Noninterest income increased $71 million primarily due to losses on the sale of securities in the earlier quarter.

•Noninterest expense decreased $260 million compared to the earlier ~~quarter. Noninterest income decreased $116 million~~quarter primarily due to ~~securities losses~~a decrease in incremental operating expenses related to the ~~current quarter and valuation changes from assets held for certain post-retirement benefits, which is primarily~~merger, partially offset by ~~lower personnel expense. Noninterest expense was flat compared to the earlier quarter.~~an increase in professional fees and outside processing, salaries, and regulatory costs.

Truist Financial Corporation 47

Analysis of Financial Condition

Investment Activities

The securities portfolio totaled ~~$146.4~~$128.8 billion at March 31, ~~2022,~~2023, compared to ~~$154.6~~$129.5 billion at December 31, 2021. The decrease was due primarily to declines in residential agency MBS and GSE securities as a result of prepayment activity. 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 March 31, 2022, approximately 5.6% of the securities portfolio was variable rate, excluding the impact of swaps, compared to 4.6% as of December 31, 2021. The effective duration of the securities portfolio was 6.9 years at March 31, 2022, compared to 5.8 years at December 31, 2021, excluding the impact of unsettled security purchases at period end.

2022. U.S. Treasury, GSE, and Agency MBS represents 97% of the total securities portfolio as of March 31, ~~2022~~2023 and December 31, ~~2021.~~2022. 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.

•The decrease includes paydowns and maturities of $2.1 billion, partially offset by unrealized gains of $1.1 billion during the quarter.

•As of March 31, 2023, 41% of the investment securities portfolio was classified as held-to-maturity based on amortized cost.

•As of March 31, 2023 and December 31, 2022, approximately 5.6% of the securities portfolio was variable rate, excluding the impact of swaps.

•The effective duration of the securities portfolio was 6.7 years at March 31, 2023 and December 31, 2022.

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)	Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Jun 30, 2021		Mar 31, 2021		For the Three Months Ended (Dollars in millions)	Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022
Commercial:	Commercial:											Commercial:
Commercial and industrial	Commercial and industrial	$	138,872	$	134,804	$	134,942	$	138,539	$	141,026	Commercial and industrial	$	165,095	$	159,308	$	152,123	$	145,558	$	138,872
CRE	CRE	23,555		24,396		24,849		25,645		26,211		CRE	22,689		22,497		22,245		22,508		23,555
Commercial construction	Commercial construction	5,046		5,341		5,969		6,359		6,557		Commercial construction	5,863		5,711		5,284		5,256		5,046

Consumer:	Consumer:											Consumer:
Residential mortgage	Residential mortgage	47,976		47,185		45,369		43,605		45,823		Residential mortgage	56,422		56,292		53,271		49,237		47,976
Residential home equity and direct		24,883		25,146		25,242		25,238		25,658
Home equity												Home equity	10,735		10,887		10,767		10,677		10,822
Indirect auto	Indirect auto	26,088		26,841		26,830		26,444		26,363		Indirect auto	27,743		28,117		28,057		26,496		26,088
Indirect other		10,860		10,978		11,112		10,797		10,848
Other consumer												Other consumer	27,559		27,479		26,927		25,918		24,921
Student	Student	6,648		6,884		7,214		7,396		7,519		Student	5,129		5,533		5,958		6,331		6,648
Credit card	Credit card	4,682		4,769		4,632		4,552		4,645		Credit card	4,785		4,842		4,755		4,728		4,682

Total average loans and leases HFI	Total average loans and leases HFI	$	288,610	$	286,344	$	286,159	$	288,575	$	294,650	Total average loans and leases HFI	$	326,020	$	320,666	$	309,387	$	296,709	$	288,610

Average loans ~~and leases held for investment for the first quarter of 2022 were $288.6 billion, up $2.3~~increased $5.4 billion, or ~~0.8%~~1.7%, compared to the ~~fourth~~prior quarter primarily due to momentum from the prior quarter within the commercial portfolio and the impact of ~~2021. Excluding a $1.1 billion decrease~~the BankDirect acquisition. Loan growth moderated during the quarter as production in ~~average PPP~~lower return portfolios was reduced with end of period loans ~~average loans held for investment were~~ up ~~$3.3 billion, or 1.2%.~~0.5% compared to December 31, 2022.

~~Truist Financial Corporation 45~~

•

Average commercial loans increased ~~$2.9 billion, or 1.8%, as a result of $6.5 billion, or 5.1%,~~3.3% due to broad-based growth within the commercial and industrial portfolio ~~excluding PPP~~ and ~~mortgage warehouse lending. This~~the BankDirect acquisition. The BankDirect acquisition contributed approximately $900 million of average loan growth was partially offset by a $1.4 billion decrease in mortgage warehouse lending (commercial and industrial), a $1.1 billion decrease in average PPP loans (commercial and industrial), an $841 million decrease in average CRE loans, and a $295 million decrease in average commercial construction loans.compared to the fourth quarter of 2022.

•

Average consumer loans decreased ~~$579 million, or 0.5%~~0.6% due to ~~a $753 million decrease~~runoff in student loans and partnership lending, as well as lower indirect auto due to market dynamics and the competitive environment, a $263 million decrease in residential home equity and direct, and a $236 million decrease in student loans. The decreases were partially offset by a $791 million increase in residential mortgages due to the continued strategy to put certain correspondent channel production onto the balance sheet and lower prepayments.production.

At March 31, ~~2022~~2023 and December 31, ~~2021, 52%~~2022, 53% of loans and leases HFI were variable rate.

4648 Truist Financial Corporation

Asset Quality

The following tables summarize asset quality information:


Table 7: Asset Quality	Table 7: Asset Quality											Table 7: Asset Quality

(Dollars in millions)	(Dollars in millions)	Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Jun 30, 2021		Mar 31, 2021		(Dollars in millions)	Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022
NPAs:	NPAs:											NPAs:
NPLs:	NPLs:											NPLs:
Commercial and industrial	Commercial and industrial	$	330	$	394	$	423	$	402	$	474	Commercial and industrial	$	394	$	398	$	443	$	393	$	330
CRE	CRE	27		29		20		25		58		CRE	117		82		5		19		27
Commercial construction	Commercial construction	—		7		7		12		13		Commercial construction	1		—		—		—		—

Residential mortgage	Residential mortgage	315		296		306		302		290		Residential mortgage	233		240		227		269		315
Residential home equity and direct		141		141		146		165		172
Home equity												Home equity	132		135		132		133		122
Indirect auto	Indirect auto	227		218		172		148		158		Indirect auto	270		289		260		244		227
Indirect other		4		5		6		6		6
Other consumer												Other consumer	45		44		39		32		23

Total NPLs HFI	Total NPLs HFI	1,044		1,090		1,080		1,060		1,171		Total NPLs HFI	1,192		1,188		1,106		1,090		1,044
Loans held for sale	Loans held for sale	39		22		76		78		72		Loans held for sale	—		—		72		33		39
Total nonaccrual loans and leases	Total nonaccrual loans and leases	1,083		1,112		1,156		1,138		1,243		Total nonaccrual loans and leases	1,192		1,188		1,178		1,123		1,083
Foreclosed real estate	Foreclosed real estate	3		8		9		13		18		Foreclosed real estate	3		4		4		3		3
Other foreclosed property	Other foreclosed property	49		43		39		41		38		Other foreclosed property	66		58		58		47		49
Total nonperforming assets	Total nonperforming assets	$	1,135	$	1,163	$	1,204	$	1,192	$	1,299	Total nonperforming assets	$	1,261	$	1,250	$	1,240	$	1,173	$	1,135
TDRs:
Performing TDRs:

Loans 90 days or more past due and still accruing:												Loans 90 days or more past due and still accruing:
Commercial and industrial	Commercial and industrial	$	104	$	147	$	200	$	202	$	201	Commercial and industrial	$	35	$	49	$	44	$	27	$	22
CRE	CRE	5		5		8		24		47		CRE	—		1		1		3		—
Commercial construction	Commercial construction	1		—		—		—		—		Commercial construction	—		—		—		3		—

Residential mortgage - government guaranteed	Residential mortgage - government guaranteed	622		480		507		520		535		Residential mortgage - government guaranteed	649		759		808		884		996
Residential mortgage - nonguaranteed	Residential mortgage - nonguaranteed	244		212		205		207		198		Residential mortgage - nonguaranteed	25		27		26		27		31
Residential home equity and direct		91		98		105		107		109
Home equity												Home equity	10		12		9		8		9
Indirect auto	Indirect auto	392		389		390		389		399		Indirect auto	—		1		1		1		1
Indirect other		6		7		7		7		7

Student - nonguaranteed		25		25		23		13		8
Credit card		25		27		30		32		35
Total performing TDRs		1,515		1,390		1,475		1,501		1,539
Nonperforming TDRs		189		152		159		190		207
Total TDRs		$	1,704	$	1,542	$	1,634	$	1,691	$	1,746
Loans 90 days or more past due and still accruing:
Commercial and industrial		$	22	$	13	$	18	$	14	$	14

Residential mortgage - government guaranteed		996		978		823		929		935
Residential mortgage - nonguaranteed		31		31		29		47		40
Residential home equity and direct		12		9		7		7		11
Indirect auto		1		1		2		2		2
Indirect other		2		3		2		1		1
Other consumer												Other consumer	10		13		9		5		5
Student - government guaranteed	Student - government guaranteed	818		864		965		1,043		1,033		Student - government guaranteed	590		702		770		796		818
Student - nonguaranteed	Student - nonguaranteed	4		4		3		3		4		Student - nonguaranteed	4		4		5		5		4
Credit card	Credit card	28		27		23		22		32		Credit card	38		37		36		28		28

Total loans 90 days or more past due and still accruing	Total loans 90 days or more past due and still accruing	$	1,914	$	1,930	$	1,872	$	2,068	$	2,072	Total loans 90 days or more past due and still accruing	$	1,361	$	1,605	$	1,709	$	1,787	$	1,914
Loans 30-89 days past due and still accruing:	Loans 30-89 days past due and still accruing:											Loans 30-89 days past due and still accruing:
Commercial and industrial	Commercial and industrial	$	280	$	130	$	135	$	146	$	152	Commercial and industrial	$	125	$	256	$	162	$	223	$	280
CRE	CRE	13		20		4		7		9		CRE	34		25		15		10		13
Commercial construction	Commercial construction	1		2		2		1		4		Commercial construction	3		5		3		4		1

Residential mortgage - government guaranteed	Residential mortgage - government guaranteed	216		256		264		307		330		Residential mortgage - government guaranteed	232		268		234		233		216
Residential mortgage - nonguaranteed	Residential mortgage - nonguaranteed	326		258		231		236		247		Residential mortgage - nonguaranteed	259		346		300		302		326
Residential home equity and direct		142		107		81		73		82
Home equity												Home equity	65		68		67		68		80
Indirect auto	Indirect auto	529		607		560		428		328		Indirect auto	511		646		591		584		529
Indirect other		65		64		53		47		45
Other consumer												Other consumer	164		187		152		166		127
Student - government guaranteed	Student - government guaranteed	476		549		451		543		551		Student - government guaranteed	350		396		375		447		476
Student - nonguaranteed	Student - nonguaranteed	6		6		5		5		5		Student - nonguaranteed	6		6		6		6		6
Credit card	Credit card	47		45		37		31		35		Credit card	56		64		52		48		47

Total loans 30-89 days past due and still accruing	Total loans 30-89 days past due and still accruing	$	2,101	$	2,044	$	1,823	$	1,824	$	1,788	Total loans 30-89 days past due and still accruing	$	1,805	$	2,267	$	1,957	$	2,091	$	2,101

~~Truist Financial Corporation 47~~

Nonperforming assets totaled ~~$1.1~~$1.3 billion at March 31, ~~2022, down $28 million~~2023, relatively stable compared to December 31, ~~2021 due to declines in the commercial and industrial portfolio.~~2022. Nonperforming loans and leases held for investment were 0.36% of loans and leases held for investment at March 31, ~~2022, down two basis points~~2023, unchanged compared to December 31, ~~2021.~~

~~Performing TDRs were up $125 million compared to the prior quarter primarily due to an increase in government guaranteed residential mortgages.~~2022.

Loans 90 days or more past due and still accruing totaled ~~$1.9~~$1.4 billion at March 31, ~~2022,~~2023, down ~~$16~~$244 million, ~~compared to the prior quarter. The ratio of loans 90 days~~ or ~~more past due and still accruing~~seven basis points as a percentage of loans and leases, ~~was 0.66% at March 31, 2022, down one basis point from~~compared with the prior ~~quarter.~~quarter primarily due to declines in government guaranteed student loans and government guaranteed residential 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 0.04% at March 31, ~~2022, up one basis point~~2023, flat from December 31, ~~2021.~~2022.

Loans 30-89 days past due and still accruing of ~~$2.1~~$1.8 billion at March 31, ~~2022~~2023 were ~~up one~~down $462 million, or 15 basis ~~point~~points as a percentage of loans and leases, compared to the prior quarter primarily due to ~~an increase~~a seasonal decrease in the consumer portfolios coupled with a decline in the commercial and industrial ~~portfolio, partially offset by seasonal declines in the indirect auto portfolio and a decline in the student~~ portfolio.

Truist Financial Corporation 49

Problem loans include NPLs and loans that are 90 days or more past due and still accruing as disclosed in Table 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 8: Asset Quality Ratios	Table 8: Asset Quality Ratios					Table 8: Asset Quality Ratios

		Mar 31, 2022		Dec 31, 2021				Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022
Loans 30-89 days past due and still accruing as a percentage of loans and leases HFI	Loans 30-89 days past due and still accruing as a percentage of loans and leases HFI	0.72	%	0.71	%		Loans 30-89 days past due and still accruing as a percentage of loans and leases HFI	0.55	%	0.70	%	0.62	%	0.69	%	0.72	%
Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI	Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI	0.66		0.67			Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI	0.42		0.49		0.54		0.59		0.66
NPLs as a percentage of loans and leases HFI	NPLs as a percentage of loans and leases HFI	0.36		0.38			NPLs as a percentage of loans and leases HFI	0.36		0.36		0.35		0.36		0.36
NPLs as a percentage of total loans and leases (1)	NPLs as a percentage of total loans and leases (1)	0.37		0.38			NPLs as a percentage of total loans and leases(1)	0.36		0.36		0.37		0.37		0.37
NPAs as a percentage of:	NPAs as a percentage of:						NPAs as a percentage of:
Total assets (1)	Total assets (1)	0.21		0.21			Total assets(1)	0.22		0.23		0.23		0.22		0.21
Loans and leases HFI plus foreclosed property	Loans and leases HFI plus foreclosed property	0.38		0.39			Loans and leases HFI plus foreclosed property	0.38		0.38		0.37		0.38		0.38

ALLL as a percentage of loans and leases HFI	ALLL as a percentage of loans and leases HFI	1.44		1.53			ALLL as a percentage of loans and leases HFI	1.37		1.34		1.34		1.38		1.44

Ratio of ALLL to NPLs	Ratio of ALLL to NPLs	3.99x		4.07x			Ratio of ALLL to NPLs	3.8x		3.7x		3.8x		3.8x		4.0x
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	%	0.03	%
Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI, excluding government guaranteed(2)							Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI, excluding government guaranteed(2)	0.04	%	0.04	%	0.04	%	0.04	%	0.04	%

(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 because collection of 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)	Table 9: Asset Quality Ratios (Continued)											Table 9: Asset Quality Ratios (Continued)
													Quarter Ended
For the Three Months Ended		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Jun 30, 2021		Mar 31, 2021
													Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022
Net charge-offs as a percentage of average loans and leases HFI:	Net charge-offs as a percentage of average loans and leases HFI:											Net charge-offs as a percentage of average loans and leases HFI:
Commercial:	Commercial:											Commercial:
Commercial and industrial	Commercial and industrial	0.04	%	0.09	%	0.04	%	0.09	%	0.17	%	Commercial and industrial	0.15	%	0.08	%	0.02	%	0.01	%	0.04	%
CRE	CRE	0.01		0.07		—		(0.05)		0.04		CRE	0.09		0.19		(0.01)		(0.10)		0.01
Commercial construction	Commercial construction	(0.02)		(0.10)		(0.06)		(0.06)		0.08		Commercial construction	(0.04)		(0.06)		(0.10)		(0.08)		(0.02)

Consumer:	Consumer:											Consumer:
Residential mortgage	Residential mortgage	(0.03)		(0.02)		0.04		(0.01)		0.08		Residential mortgage	—		(0.02)		0.01		(0.02)		(0.03)
Residential home equity and direct		0.61		0.49		0.49		0.59		0.58
Home equity												Home equity	(0.15)		(0.01)		(0.13)		(0.17)		(0.12)
Indirect auto	Indirect auto	1.23		1.01		0.75		0.63		1.28		Indirect auto	1.47		1.52		1.15		0.77		1.23
Indirect other		0.48		0.39		0.26		0.17		0.39
Other consumer												Other consumer	1.29		1.11		1.31		1.27		0.87
Student	Student	0.33		0.65		0.31		0.16		0.16		Student	0.42		0.34		0.40		0.30		0.33
Credit card	Credit card	2.77		2.31		1.90		2.75		2.74		Credit card	3.54		3.68		2.80		2.63		2.77
Total	Total	0.25		0.25		0.19		0.20		0.33		Total	0.37		0.34		0.27		0.22		0.25

Ratio of ALLL to net charge-offs	Ratio of ALLL to net charge-offs	5.78x		6.14x		8.79x		8.98x		5.87x		Ratio of ALLL to net charge-offs	3.7x		4.1x		5.0x		6.5x		5.8x

Ratios are annualized, as applicable.

~~48 Truist Financial Corporation~~

The following table presents activity related to NPAs:


Table 10: Rollforward of NPAs	Table 10: Rollforward of NPAs					Table 10: Rollforward of NPAs
(Dollars in millions)	(Dollars in millions)	2022		2021		(Dollars in millions)	2023		2022
Balance, January 1	Balance, January 1	$	1,163	$	1,387	Balance, January 1	$	1,250	$	1,163
New NPAs	New NPAs	395		563		New NPAs	621		395
Advances and principal increases	Advances and principal increases	108		102		Advances and principal increases	214		108
Disposals of foreclosed assets (1)	Disposals of foreclosed assets (1)	(112)		(112)		Disposals of foreclosed assets(1)	(147)		(112)
Disposals of NPLs (2)	Disposals of NPLs (2)	(37)		(41)		Disposals of NPLs(2)	(3)		(37)
Charge-offs and losses	Charge-offs and losses	(115)		(112)		Charge-offs and losses	(204)		(115)
Payments	Payments	(180)		(300)		Payments	(306)		(180)
Transfers to performing status	Transfers to performing status	(101)		(183)		Transfers to performing status	(160)		(101)
Other, net	Other, net	14		(5)		Other, net	(4)		14
Ending balance, March 31	Ending balance, March 31	$	1,135	$	1,299	Ending balance, March 31	$	1,261	$	1,135

(1)Includes charge-offs and losses recorded upon sale of ~~$29~~$42 million and ~~$46~~$29 million for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

(2)Includes gains, net of charge-offs recorded upon sale of $5 million and charge-offs and losses recorded upon sale of $3 million ~~and $5 million~~ for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, 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. For loan modification programs in response to the COVID-19 pandemic, Truist applied the relief from TDR accounting described in the CARES Act. Payment relief assistance provided by Truist includes forbearance, deferrals, extension, and re-aging programs, along with certain other modification strategies. Refer to “Note 1. Basis of Presentation” in Truist’s Annual Report on Form 10-K for the year ended December 31, 2021 for the policies related to TDRs and COVID-19 loan modifications. The following table provides a summary of performing TDR activity:
Table 11: Rollforward of Performing TDRs
(Dollars in millions) 2022 2021
Balance, January 1 $ 1,390 $ 1,361
Inflows 306 294
Payments and payoffs (1) (60) (57)
Charge-offs (9) (13)
Transfers to nonperforming TDRs (2) (19) (13)
Removal due to the passage of time (71) (7)
Non-concessionary re-modifications (1) (12)
Transferred to LHFS, sold and other (21) (14)
Balance, March 31 $ 1,515 $ 1,539

~~(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.~~

50 Truist Financial Corporation 49

CRE and Commercial Construction

~~The following table provides further details regarding~~

Truist has noted that the ~~payment status~~CRE and commercial construction portfolios have the potential for heightened risk in the current environment. Truist maintains a high-quality portfolio through disciplined risk management and prudent client selection. In addition, the Company’s exposure to large CRE tends to have more institutional sponsorship and the Company has reduced exposure to smaller CRE. Truist’s CRE and commercial construction portfolios was $28.6 billion as of ~~TDRs outstanding at~~ March 31, ~~2022:~~
Table 12: Payment Status of TDRs (1)
March 31, 2022
(Dollars in millions) Current Past Due 30-89 Days Past Due 90 Days Or More Total
Performing TDRs:
Commercial:
Commercial and industrial $ 102 98.1 % $ 2 1.9 % $ — — % $ 104
CRE 5 100.0 — — — — 5
Commercial construction 1 100.0 — — — — 1
Consumer:
Residential mortgage - government guaranteed 290 46.6 58 9.3 274 44.1 622
Residential mortgage - nonguaranteed 210 86.1 25 10.2 9 3.7 244
Residential home equity and direct 85 93.4 6 6.6 — — 91
Indirect auto 336 85.7 56 14.3 — — 392
Indirect other 5 83.3 1 16.7 — — 6
Student - nonguaranteed 22 88.0 2 8.0 1 4.0 25
Credit card 22 88.0 2 8.0 1 4.0 25
Total performing TDRs 1,078 71.2 152 10.0 285 18.8 1,515
Nonperforming TDRs 57 30.2 24 12.7 108 57.1 189
Total TDRs $ 1,135 66.6 $ 176 10.3 $ 393 23.1 $ 1,704
2023.

~~(1)~~
~~Past due performing TDRs are included~~

Our office portfolio, which makes up approximately 18% of total CRE and commercial construction loans, is weighted towards Class A properties as of March 31, 2023. Nonperforming loans and criticized loans in ~~past due disclosures~~this portfolio have trended higher in recent months.


Table 11: CRE and Commercial Construction by Type
	March 31, 2023				December 31, 2022
(Dollars in millions)	LHFI		NPL		LHFI		NPL
CRE and commercial construction:
Multifamily	$	8,085	$	2	$	7,762	$	—
Office	5,151		109		5,258		75
Retail	4,582		3		4,668		2
Industrial	4,550		—		4,329		—
Hotel	2,827		—		2,965		—
Other	3,426		4		3,543		5
Total	$	28,621	$	118	$	28,525	$	82

See additional information on the CRE and ~~nonperforming TDRs are included~~commercial construction portfolios in ~~NPL disclosures.~~“Note 5. Loans and ACL,” including loans by origination year and credit quality indicator.

50 Truist Financial Corporation 51

ACL

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


Table 13: Activity in ACL
For the Three Months Ended (Dollars in millions)		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Jun 30, 2021		Mar 31, 2021
Balance, beginning of period		$	4,695	$	4,978	$	5,436	$	6,011	$	6,199
Table 12: Activity in ACL												Table 12: Activity in ACL
													For the Three Months Ended
(Dollars in millions)												(Dollars in millions)	Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022
Balance, beginning of period(1)												Balance, beginning of period(1)	$	4,649	$	4,455	$	4,434	$	4,423	$	4,695

Provision for credit losses	Provision for credit losses	(95)		(103)		(324)		(434)		48		Provision for credit losses	482		467		234		171		(95)

Charge-offs:	Charge-offs:											Charge-offs:
Commercial and industrial	Commercial and industrial	(31)		(54)		(57)		(53)		(79)		Commercial and industrial	(75)		(44)		(51)		(17)		(31)
CRE	CRE	(1)		(5)		(1)		—		(4)		CRE	(6)		(11)		—		(1)		(1)
Commercial construction	Commercial construction	(1)		—		—		—		(2)		Commercial construction	—		—		—		—		(1)

Residential mortgage	Residential mortgage	(2)		(1)		(7)		(4)		(11)		Residential mortgage	(1)		(1)		(4)		(2)		(2)
Residential home equity and direct		(58)		(51)		(51)		(57)		(55)
Home equity												Home equity	(2)		(6)		(3)		(3)		(1)
Indirect auto	Indirect auto	(102)		(89)		(73)		(69)		(105)		Indirect auto	(127)		(129)		(103)		(77)		(102)
Indirect other		(19)		(16)		(13)		(11)		(17)
Other consumer												Other consumer	(105)		(96)		(109)		(100)		(76)
Student	Student	(6)		(12)		(6)		(3)		(3)		Student	(5)		(5)		(7)		(4)		(6)
Credit card	Credit card	(41)		(37)		(31)		(42)		(40)		Credit card	(51)		(53)		(42)		(40)		(41)

Total charge-offs	Total charge-offs	(261)		(265)		(239)		(239)		(316)		Total charge-offs	(372)		(345)		(319)		(244)		(261)
Recoveries:	Recoveries:											Recoveries:
Commercial and industrial	Commercial and industrial	17		23		42		23		19		Commercial and industrial	13		14		43		13		17
CRE	CRE	1		—		1		4		1		CRE	1		1		—		6		1
Commercial construction	Commercial construction	1		1		1		1		1		Commercial construction	1		1		2		1		1

Residential mortgage	Residential mortgage	6		2		3		5		2		Residential mortgage	2		3		3		4		6
Residential home equity and direct		20		21		20		20		18
Home equity												Home equity	6		6		8		6		5
Indirect auto	Indirect auto	23		21		22		27		22		Indirect auto	26		21		21		26		23
Indirect other		6		6		5		7		6
Other consumer												Other consumer	17		17		21		20		21
Student	Student	—		—		1		—		—		Student	—		1		—		—		—
Credit card	Credit card	9		9		9		10		9		Credit card	9		8		8		9		9
Total recoveries	Total recoveries	83		83		104		97		78		Total recoveries	75		72		106		85		83
Net charge-offs	Net charge-offs	(178)		(182)		(135)		(142)		(238)		Net charge-offs	(297)		(273)		(213)		(159)		(178)
Other		1		2		1		1		2
Other(2)												Other(2)	(73)		—		—		(1)		1
Balance, end of period	Balance, end of period	$	4,423	$	4,695	$	4,978	$	5,436	$	6,011	Balance, end of period	$	4,761	$	4,649	$	4,455	$	4,434	$	4,423

ACL:

ACL:(1)												ACL:(1)
ALLL	ALLL	$	4,170	$	4,435	$	4,702	$	5,121	$	5,662	ALLL	$	4,479	$	4,377	$	4,205	$	4,187	$	4,170
RUFC	RUFC	253		260		276		315		349		RUFC	282		272		250		247		253
Total ACL	Total ACL	$	4,423	$	4,695	$	4,978	$	5,436	$	6,011	Total ACL	$	4,761	$	4,649	$	4,455	$	4,434	$	4,423

(1)Excludes provision for credit losses and allowances related to other financial assets at amortized cost.

(2)The first quarter of 2023 includes the impact from the adoption of the Troubled Debt Restructurings and Vintage Disclosures accounting standard.

~~Net charge-offs during the first quarter totaled $178 million, or 0.25% as a percentage of average loans, and was stable compared to the prior quarter.~~

The allowance for credit losses was ~~$4.4~~$4.8 billion and includes ~~$4.2~~$4.5 billion for the allowance for loan and lease losses and ~~$253~~$282 million for the reserve for unfunded commitments. The ALLL ratio was ~~1.44%~~1.37%, up three basis points compared ~~to 1.53% at~~with December 31, ~~2021. The decrease reflects a continued favorable credit environment tempered by uncertainty associated with inflation, supply chain disruption, rising rates, and geopolitical events.~~2022 primarily due to increased economic uncertainty. The ALLL covered nonperforming loans and leases held for investment ~~3.99X~~3.8X compared to ~~4.07X~~3.7X at December 31, ~~2021.~~2022. At March 31, ~~2022,~~2023, the ALLL was ~~5.78X~~3.7X annualized net charge-offs, compared to ~~6.14X~~4.1X at December 31, ~~2021.~~2022.

52 Truist Financial Corporation 51

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 14: Allocation of ALLL by Category
		March 31, 2022							December 31, 2021
Table 13: Allocation of ALLL by Category																Table 13: Allocation of ALLL by Category
						March 31, 2023							December 31, 2022
(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	$	1,319	31.6	%		48.6	%	$	1,426	32.2	%		47.9	%	Commercial and industrial	$	1,497	33.5	%	51.1	%	$	1,409	32.3	%	50.3	%
CRE	CRE	283		6.8			7.9		350		7.9			8.3		CRE	251		5.6		6.9		224		5.1		7.0
Commercial construction	Commercial construction	53		1.3			1.8		52		1.2			1.7		Commercial construction	87		1.9		1.8		46		1.1		1.8

Residential mortgage	Residential mortgage	310		7.4			16.6		308		6.9			16.5		Residential mortgage	332		7.4		17.2		399		9.1		17.4
Residential home equity and direct		574		13.8			8.6		615		13.9			8.7
Home equity																Home equity	87		1.9		3.2		90		2.0		3.3
Indirect auto	Indirect auto	957		22.9			8.9		1,022		23.0			9.1		Indirect auto	993		22.2		8.3		981		22.4		8.6
Indirect other		211		5.1			3.8		195		4.4			3.8
Other consumer																Other consumer	779		17.4		8.5		770		17.6		8.5
Student	Student	115		2.8			2.2		117		2.6			2.3		Student	98		2.2		1.5		98		2.2		1.6
Credit card	Credit card	348		8.3			1.6		350		7.9			1.7		Credit card	355		7.9		1.5		360		8.2		1.5
Total ALLL	Total ALLL	4,170		100.0	%		100.0	%	4,435		100.0	%		100.0	%	Total ALLL	4,479		100.0	%	100.0	%	4,377		100.0	%	100.0	%
RUFC	RUFC	253							260							RUFC	282						272
Total ACL	Total ACL	$	4,423						$	4,695						Total ACL	$	4,761					$	4,649

Truist monitors the performance of its home equity loans and lines secured by second liens similarly to other consumer loans and utilizes assumptions specific to these loans in determining the necessary ALLL. 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 March 31, ~~2022,~~2023, Truist held or serviced the first lien on 32% of its second lien positions.

Other Assets

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


Table 15: Other Assets as of Period End
Table 14: Other Assets as of Period End						Table 14: Other Assets as of Period End
(Dollars in millions)	(Dollars in millions)	Mar 31, 2022		Dec 31, 2021		(Dollars in millions)	Mar 31, 2023		Dec 31, 2022

Bank-owned life insurance	Bank-owned life insurance	$	7,545	$	7,281	Bank-owned life insurance	$	7,651	$	7,618
Tax credit and other private equity investments	Tax credit and other private equity investments	6,352		6,309		Tax credit and other private equity investments	6,730		6,825
Prepaid pension assets	Prepaid pension assets	6,348		5,938		Prepaid pension assets	5,885		4,539
Derivative assets		2,113		2,370
DTAs						DTAs	2,393		3,027
Accounts receivable	Accounts receivable	2,323		2,244		Accounts receivable	2,763		2,682
Accrued income						Accrued income	2,429		2,265
Leased assets and related assets	Leased assets and related assets	2,162		2,092		Leased assets and related assets	2,059		2,082
Accrued income		1,875		1,791
FHLB stock						FHLB stock	2,426		1,279
ROU assets	ROU assets	1,126		1,168		ROU assets	1,151		1,193
Prepaid expenses	Prepaid expenses	1,174		1,152		Prepaid expenses	1,177		1,162
Equity securities at fair value	Equity securities at fair value	1,024		1,066		Equity securities at fair value	857		898

Derivative assets						Derivative assets	692		684
Other	Other	1,428		738		Other	792		874
Total other assets	Total other assets	$	33,470	$	32,149	Total other assets	$	37,005	$	35,128

Truist Financial Corporation 53

Funding Activities

Deposits

The following table presents average deposits:


Table 16: Average Deposits
Table 15: Average Deposits												Table 15: Average Deposits
Three Months Ended (Dollars in millions)	Three Months Ended (Dollars in millions)	Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Jun 30, 2021		Mar 31, 2021		Three Months Ended (Dollars in millions)	Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022
Noninterest-bearing deposits	Noninterest-bearing deposits	$	145,933	$	146,492	$	141,738	$	137,892	$	128,579	Noninterest-bearing deposits	$	131,099	$	141,032	$	146,041	$	148,610	$	145,933
Interest checking	Interest checking	112,159		110,506		107,802		106,121		104,744		Interest checking	108,886		110,001		111,645		112,375		112,159
Money market and savings	Money market and savings	141,500		137,676		136,094		134,029		129,303		Money market and savings	139,802		144,730		147,659		148,632		141,500
Time deposits	Time deposits	15,646		16,292		17,094		18,213		20,559		Time deposits	28,671		17,513		14,751		14,133		15,646

Total average deposits	Total average deposits	$	415,238	$	410,966	$	402,728	$	396,255	$	383,185	Total average deposits	$	408,458	$	413,276	$	420,096	$	423,750	$	415,238

~~52 Truist Financial Corporation~~

Average deposits for the first quarter of ~~2022~~2023 were ~~$415.2~~$408.5 billion, ~~an increase~~a decrease of ~~$4.3~~$4.8 billion, or ~~1.0%~~1.2%, compared to the prior quarter. The decrease in deposits was primarily driven by the impacts of monetary tightening and higher-rate alternatives.

Average ~~noninterest bearing~~noninterest-bearing deposits ~~declined 0.4%~~decreased 7.0% compared to the prior quarter and represented ~~35.1%~~32.1% of total deposits for the first quarter of ~~2022,~~2023 compared to ~~35.6%~~34.1% for the ~~prior~~fourth quarter of 2022 and 35.1% compared to the year ago quarter. Noninterest-bearing deposits declined primarily due to clients seeking high-rate alternatives. Average ~~interest checking and~~ money market and savings ~~grew 1.5%~~ and ~~2.8%~~interest checking declined 3.4% and 1.0%, respectively, compared to the prior quarter. Average time deposits ~~decreased 4.0% primarily~~increased 64% due to an increase in wholesale funding and retail-client time deposits.

Truist has a very granular and relationship-based deposit franchise. Approximately 63% of deposits are insured or collateralized. Truist deposit accounts are typically based on long-term relationships and include multiple products and services. Truist has strong market share in many of the ~~maturity~~fastest-growing markets in the United States. Truist currently ranks 1st, 2nd, or 3rd in deposit share in 17 of our top 20 markets, including Atlanta, Charlotte, DC, Miami, Tampa, Orlando, and Raleigh-Durham, among others. Truist’s commercial deposits are diversified across 21 industry groups, with no one sector representing more than 10% of Corporate and Commercial Banking deposits.

The estimated amount of deposits that are uninsured was $175.9 billion and $189.6 billion as of March 31, 2023 and December 31, 2022, respectively, calculated using the same methodology as the Call Report for Truist Bank. The decrease in uninsured deposits was largely due to commercial clients that chose to diversify into money market mutual funds or across multiple banks. These outflows were primarily higher-cost, ~~accounts.~~non-operational deposits.

Borrowings

At March 31, ~~2022,~~2023, short-term borrowings totaled ~~$5.1~~$23.7 billion, ~~a decrease~~an increase of ~~$145~~$256 million compared to December 31, ~~2021.~~2022. Average short-term borrowings were ~~$6.9~~$24.1 billion, or ~~1.5%~~5.0% of total funding, for the ~~first quarter of 2022,~~three months ended March 31, 2023, as compared to ~~$6.7~~$6.9 billion, or ~~1.6%~~1.5%, for the same period in the prior year.

Long-term debt provides funding and, to a lesser extent, regulatory capital, and primarily consists of senior and subordinated notes issued by Truist and Truist Bank. Long-term debt totaled ~~$33.8~~$69.9 billion at March 31, ~~2022, a decrease~~2023, an increase of ~~$2.1~~$26.7 billion compared to December 31, ~~2021.~~2022. This funding increase was largely to increase our cash position in response to market events. During ~~2022,~~the three months ended March 31, 2023, the Company ~~had $1.4~~had:

•Maturities and redemptions of $3.5 billion of senior notes.

•Issued $1.5 billion fixed-to-floating rate senior notes with an interest rate of 4.87% due January 26, 2029 and ~~$300 million~~$1.5 billion fixed-to-floating rate senior notes with an interest rate of ~~subordinated long-term debt redemptions.~~5.12% due January 26, 2034.

•Issued $27.0 billion notional, net, of prepayable FHLB floating rate advances ~~represented 2.5%~~with interest rates of ~~total outstanding long-term debt at~~5.05% to 5.07% due April 10, 2024 to March ~~31, 2022, compared to 2.4% at December 31, 2021.~~ 13, 2025.

The average cost of long-term debt was ~~1.50%~~4.05% for the three months ended March 31, ~~2022, down seven~~2023, up 255 basis points compared to the same period in ~~2021.~~

In April 2022, Truist redeemed $800 million of FHLB advances, which resulted in a gain on early extinguishment of long-term debt of $39 million. Additionally, Truist redeemed $1.4 billion of fixed rate senior notes and $650 million of floating rate senior notes that were due in May 2022.

54 Truist Financial Corporation

Shareholders’ Equity

Truist’s book value per common share and TBVPS are presented in the following table:


Table 16: Book Value per Common Share
(Dollars in millions, except per share data, shares in thousands)	Mar 31, 2023		Dec 31, 2022
Common equity per common share	$	41.82	$	40.58
Non-GAAP capital measure:(1)
Tangible common equity per common share	$	19.45	$	18.04
Calculation of tangible common equity:(1)
Total shareholders’ equity	$	62,394	$	60,537
Less:
Preferred stock	6,673		6,673
Noncontrolling interests	22		23
Goodwill and intangible assets, net of deferred taxes	29,788		29,908
Tangible common equity	$	25,911	$	23,933

Common shares outstanding at end of period	1,331,918		1,326,829

(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 profitability, returns relative to balance sheet risk, and shareholder value.

Total shareholders’ equity was ~~$65.0~~$62.4 billion at March 31, ~~2022, a decrease~~2023, an increase of ~~$4.2~~$1.9 billion from December 31, ~~2021.~~2022. This ~~decrease~~increase includes ~~a decrease of $4.9~~$1.5 billion in ~~AOCI, $725 million~~net income and a $1.0 billion increase in ~~dividends,~~AOCI, partially offset by ~~$1.4 billion~~$794 million in ~~net income.~~common and preferred dividends. Truist’s book value per common share at March 31, ~~2022~~2023 was ~~$43.82,~~$41.82, compared to ~~$47.14~~$40.58 at December 31, ~~2021.~~2022. Truist TBVPS of $19.45 at March 31, 2023, increased 7.8% compared to December 31, 2022 due to increases in AOCI, primarily related to AFS securities, and retained earnings.

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~~framework 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~~measurement and monitoring 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 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~~Truist’s compensation plans are designed to consider teammate’s adherence to and successful implementation of Truist’s risk values and associated policies and procedures. The Company’s compensation structure supports its core values and sound risk management practices in an effort to promote judicious risk-taking behavior.

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

Refer to Truist’s Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 for additional disclosures under the section titled “Risk Management.”

~~Truist Financial Corporation 53~~

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.

Truist Financial Corporation 55

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 from assets, liabilities, and 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. 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, 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 deposit beta assumptions to non-maturity interest-bearing deposit accounts ~~that are not contractually tied to an index~~ 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. The deposit beta assumptions are reduced when interest rates are exceptionally low and competition for interest-bearing deposits is commensurately low. 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. Truist applies an average deposit beta of approximately ~~25% for the first 100 basis point increase in the Federal funds~~50% to its non-maturity interest-bearing accounts when determining its interest rate ~~approximately 35% for the second 100 basis point increase, and approximately 50% for any additional increases.~~sensitivity. 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.

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 17: 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
		Mar 31, 2022		Mar 31, 2021		Mar 31, 2022		Mar 31, 2021			Mar 31, 2023		Mar 31, 2022		Mar 31, 2023		Mar 31, 2022
Up 100	Up 100	4.50	%	4.25	%	4.27	%	3.74	%	Up 100	9.00	%	4.50	%	(0.29)	%	4.27	%
Up 50	Up 50	4.00		3.75		3.29		2.92		Up 50	8.50		4.00		(0.11)		3.29
No Change	No Change	3.50		3.25		—		—		No Change	8.00		3.50		—		—
Down 25 (1)		3.25		3.00		(2.48)		(1.32)
Down 50 (1)	Down 50 (1)	3.00		2.75		(3.46)		(1.75)		Down 50(1)	7.50		3.00		(0.58)		(3.46)
Down 100(1)										Down 100(1)	7.00		2.50		(0.70)		(3.64)

(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 ~~a change to~~higher starting rates, higher deposit betas as rates increase and move into the ~~Company’s deposit~~highest beta ~~assumptions, partially offset by an increase in~~tiers, and the ~~investment securities portfolio.~~

~~54 Truist Financial Corporation~~

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~~was very strong ~~during the current economic cycle. Much of this liquidity increase has~~post-COVID-19, which resulted in growth in noninterest-bearing demand deposits. ~~Consistent~~However, with the ~~industry, Truist has seen a~~ significant increase in ~~this funding source. The behavior~~rates in 2022 and the first quarter of ~~these~~2023, noninterest-bearing deposits have begun to shift to interest-bearing accounts. Additional movement above what 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~~currently projected would reduce the asset sensitivity of Truist’s balance sheet because the Company may increase interest-bearing funds to offset the loss of ~~this~~these advantageous ~~funding source.~~noninterest-bearing deposits. 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 behavior of these noninterest-bearing deposits is one of the most important assumptions used in determining the interest rate risk position of Truist.

56 Truist Financial Corporation

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 18: 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 March 31, 2022 (1)			Results Assuming a Decrease in Noninterest-Bearing Demand Deposits				Gradual Change in Rates (bps)				Base Scenario at March 31, 2023(1)		Results Assuming a Decrease in Noninterest-Bearing Demand Deposits
			td0 Billion			$40 Billion					td0 Billion				$40 Billion
Up 100	Up 100		4.27	%		3.45	%			2.63		%		Up 100	(0.29)	%	(1.01)	%	(1.72)	%
Up 50	Up 50	3.29			2.69			2.10	Up 50				(0.11)		(0.63)		(1.15)

(1)The base scenario is equal to the annualized hypothetical percentage change in net interest income at March 31, ~~2022~~2023 as presented in the preceding table.

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. Truist~~ has utilized derivatives to facilitate transactions on behalf of its clients and as part of associated hedging activities. As of March 31, ~~2022,~~2023, Truist had derivative financial instruments outstanding with notional amounts totaling ~~$320.5 billion, with an associated net fair value of $631 million.~~$363.0 billion. See “Note 16. Derivative Financial Instruments” for additional disclosures.

LIBOR Transition

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, ceased publication at December 31, 2021, based on the October 20, 2021 interagency Joint Statement on Managing the LIBOR 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 or multiple indices and provides updates to Executive Leadership and the Board. As of March 31, ~~2022,~~2023, Truist had outstanding LIBOR-based instruments that mature after June 30, 2023, ~~including:~~including loan and lease exposures totaling approximately ~~$159~~$98 billion, notional derivative exposure totaling approximately ~~$135~~$131 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 has ~~largely~~ been reviewed and certain contracts ~~will~~ require amendments to support the transition away from LIBOR. ~~For impacted~~Impacted lines of business ~~the Company has~~have started remediating these contracts to include standardized fallback ~~language.~~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, ~~where appropriate.~~which will transition loans to a SOFR based rate after June 30, 2023.

The progress and approach to remediation ~~will vary~~varies 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~~required client outreach and remediation. Through mid-2022, the Company’s primary focus was supporting new loan production using SOFR and other alternative reference rates as well as transitioning any renewing LIBOR based contracts to alternative reference rates. Efforts have shifted to amend and remediate contracts, excluding mortgage and student loans, that mature post June 30, 2023 ($~~148~~90 billion), which will continue to be the focus during 2023. Of the contracts remaining on LIBOR that have not yet been remediated or modified to a new reference rate, Truist’s intends to add updated fallback language or move these contracts to new reference rates prior to cessation. A significant portion of these contracts contain existing fallback language that will transition the contract to a Prime based rate if not remediated, while a smaller population contains no historical fallback language. Should the institution be unable to remediate all contracts, those based on Prime will be ~~accelerated in 2022.~~prioritized to provide a more consistent client experience with the “hardwired fallback” transition to SOFR. If there are remaining contracts without fallback language, Truist ~~has determined that adjustable rate~~may leverage the LIBOR Act and corresponding safe harbor provision to transition these loans to SOFR.

Truist’s adjustable-rate mortgage products ($~~4.0~~3.4 billion) have consistent and adequate fallback language to transition away from LIBOR in line with industry expectations; therefore, these contracts ~~will~~do not require remediation. Remediation of student loans ($~~5.8~~4.4 billion) will ~~depend on~~follow recent 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,” ~~including SOFR~~in the private student loan portfolio, where LIBOR is used directly. Based on the recent guidance, these portfolios will transition to rates based on SOFR.

Upon the discontinuation of LIBOR, derivatives that reference LIBOR will transition to a SOFR-based replacement rate as set forth in the ISDA protocol addressing LIBOR fallbacks through bilateral amendments, or ~~Prime.~~as established under the LIBOR Act and rules promulgated thereunder by the FRB. Certain derivatives without a clearly defined or practicable replacement benchmark rate will use the ~~recent Federal legislation~~LIBOR Act to replace LIBOR with a SOFR-based rate ~~that will be~~ established by FRB ~~rulemaking.~~rulemaking and follow 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.~~language and have not yet been remediated, providing a remediation path to a SOFR based rate.

Truist Financial Corporation 5557

In addition, the transition from LIBOR to an alternative reference rate, such as SOFR, for the Company’s preferred stock and the Company’s and Truist Bank’s floating rate notes is dependent on a number of factors, including the fallback language for the applicable series of preferred stock or notes, the application of the LIBOR Act and the rules promulgated thereunder by the FRB, determinations to be made by third-party calculation or paying agents rather than the Company or Truist Bank as to the replacement rates, and the impact of any publication of a synthetic U.S. dollar LIBOR as currently proposed by the Financial Conduct Authority. With the most recent information available on these factors, Truist expects preferred stock issuances to utilize LIBOR to transition to SOFR. See “Note 12. Shareholders’ Equity” for information about preferred stock using LIBOR.

Training has been provided for impacted teammates and will continue during ~~2022.~~2023. 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 to support the transition.

As of December 31, 2021, Truist ceased entering into new contracts with a LIBOR reference rate for all product offerings, except on a limited basis, as permissible. ~~Market risks associated with this change are dependent on the alternative reference rates available and market conditions as of the transition.~~ The Company is actively using SOFR as a reference rate and has originated approximately ~~$30~~$124 billion of loans, issued $5$12.4 billion of ~~long-term debt,~~senior and subordinated notes, including fixed rate notes that convert to SOFR in the future, and has ~~$50~~$108 billion in notional derivative exposure using this alternative reference rate as of March 31, ~~2022.~~2023. 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 ~~2022.~~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 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, ~~2021.~~2022.

Market ~~risk~~Risk from ~~trading activities~~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.

Securitizations

As of March 31, ~~2022,~~2023, the aggregate market value of on-balance sheet securitization positions subject to the Market Risk Rule was ~~$33~~$18 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 March 31, ~~2022.~~

2023.

5658 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 ended March 31, ~~2022~~2023 and ~~2021.~~2022. Average one and ~~ten day~~ten-day VaR measures ~~declined~~for the year ended March 31, 2023 decreased from the same period of last year, ~~as heightened~~primarily driven by lower market ~~volatility experienced during March 2020 aged out of the 12-month VaR look-back window.~~
Table 19: VaR-based Measures
Three Months Ended March 31,
2022 2021
(Dollars in millions) 10-Day Holding Period 1-Day Holding Period 10-Day Holding Period 1-Day Holding Period
VaR-based Measures:
Maximum $ 38 $ 14 $ 68 $ 16
Average 18 6 39 10
Minimum 9 3 3 3
Period-end 15 4 5 3
VaR by Risk Class:
Interest Rate Risk 4 2
Credit Spread Risk 4 4
Equity Price Risk 4 1
Foreign Exchange Risk — —
Portfolio Diversification (8) (5)
Period-end 4 3
making inventory.


Table 19: VaR-based Measures
	Three Months Ended March 31,
		2023	2022
(Dollars in millions)			10-Day Holding Period		1-Day Holding Period		10-Day Holding Period		1-Day Holding Period
VaR-based Measures:
Maximum			$	22	$	9	$	38	$	14
Average			15		6		18		6
Minimum			10		4		9		3
Period-end			22		9		15		4
VaR by Risk Class:
Interest Rate Risk					8				4
Credit Spread Risk					7				4
Equity Price Risk					1				4

Portfolio Diversification					(9)				(8)
Period-end					8				4

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 20: Stressed VaR-based Measures - 10 Day Holding Period
Three Months Ended March 31,
(Dollars in millions) 2022 2021
Maximum $ 109 $ 72
Average 76 54
Minimum 59 26
Period-end 72 64


Table 20: Stressed VaR-based Measures - 10 Day Holding Period
	Three Months Ended March 31,
(Dollars in millions)		2023		2022
Maximum		$	77	$	109
Average		44		76
Minimum		25		59
Period-end		31		72

Compared to the prior year, ~~stressed~~Stressed VaR measures ~~increased in 2022~~decreased primarily due to ~~the normalization of~~lower market making inventory levels ~~this year.~~in 2023.

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.

Truist Financial Corporation 5759

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, ~~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~~there were no Company-wide VaR backtesting exceptions during the twelve months ended March 31, ~~2022.~~2023. The total number of Company-wide VaR backtesting exceptions over the preceding twelve months is used to determine the multiplication factor for the VaR-based capital requirement under the Market Risk Rule. 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.

Model Risk ~~Management~~Oversight

~~MRM~~MRO 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~~MRO 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.

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.

5860 Truist Financial Corporation

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.

Internal Liquidity Stress Testing

Liquidity stress testing is designed to ensure that Truist and Truist Bank have sufficient liquidity for a variety of institution-specific and 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 liquidity buffer is substantially the same in composition to what qualifies as HQLA under the LCR Rule.

Contingency Funding Plan

Truist has a contingency funding plan designed to ensure that liquidity sources are sufficient to meet ongoing obligations and commitments, particularly in the event of a liquidity contraction. This plan is designed to examine and 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 ~~critical~~ 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 requires that Truist and Truist Bank maintain an amount of eligible HQLA that is sufficient to meet its estimated total net cash outflows over a prospective 30 calendar-day period of stress. Eligible HQLA, for purposes of calculating the LCR, is the amount of unencumbered HQLA that satisfy operational requirements of the LCR rule. Truist and Truist Bank are subject to the Category III reduced LCR requirements. Truist held average weighted eligible HQLA of ~~$83.9~~$87.4 billion and Truist’s average LCR was ~~111%~~113% for the three months ended March 31, ~~2022.~~2023.

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 March 31, ~~2022,~~2023, the Company was compliant with this requirement.

Sources of Funds

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 stability of Truist Bank and its 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 the capital markets through the issuance of senior or subordinated bank notes, institutional CDs, overnight and term Federal funds markets, and retail brokered CDs. Truist Bank also maintains access to secured borrowing sources including FHLB advances, repurchase agreements, and the 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 FRB:


Table 21: Selected Liquidity Sources
(Dollars in millions)	Mar 31, 2023		Dec 31, 2022
Unused borrowing capacity:
FRB	$	53,291	$	49,250
FHLB	24,678		20,770
Available investment securities (after haircuts)	56,626		85,401
Available secured borrowing capacity	134,595		155,421
Eligible cash at the FRB	31,544		15,556
Total	$	166,139	$	170,977

Truist Financial Corporation 5961

Table 21: Liquidity Sources
(Dollars in millions) Mar 31, 2022 Dec 31, 2021
Unused borrowing capacity:
FRB $ 51,876 $ 52,170
FHLB 45,961 49,244
Available investment securities (after haircuts) 110,327 116,600
Available secured borrowing capacity 208,164 218,014
Eligible cash at the FRB 23,060 14,714
Total $ 231,224 $ 232,728

At March 31, ~~2022,~~2023, Truist Bank’s available secured borrowing capacity represented approximately ~~7.4~~3.6 times the amount of wholesale funding maturities in one-year or less. Truist additionally has the ability to increase sources of funding by pledging available investment securities without a haircut on fair value under the FRB Bank Term Funding Program.

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. See “Note 22. Parent Company Financial Information” in Truist’s Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 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 March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, the Parent Company had 3045 months and 3537 months, respectively, of cash on hand to satisfy projected cash outflows, and 1926 months and 1922 months, respectively, when including the payment of common stock dividends.

Credit Ratings

Credit ratings are forward-looking opinions of rating agencies as to the Company’s ability to meet its 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. The Company’s credit ratings are continuously monitored by the rating agencies and 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 business updates and to discuss current outlooks and trends. See Item 1A, “Risk Factors” in Truist’s Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 for additional information regarding factors that influence credit ratings and potential risks that could materialize in the event of downgrade in the Company’s credit ~~ratings.~~ratings: Recent changes in the Company’s credit ratings and outlooks include:

~~The credit~~On March 31,2023, S&P Global Ratings affirmed the ratings ~~and outlooks~~ of Truist and Truist Bank ~~are unchanged~~and revised the outlook on those ratings to “stable” from ~~those presented~~“positive,” citing heightened market volatility in the ~~Company’s 2021 Annual Report~~wake of recent bank failures and, with inflation still elevated, higher uncertainty, and greater downside risk in the economic outlook. The change in outlook was part of a broader action by S&P Global Ratings whereby the “positive” outlook on ~~Form 10-K.~~three other large U.S. banks was revised to “stable.”

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.

6062 Truist Financial Corporation

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,~~limits, which are above the regulatory “well capitalized” minimums. Management ~~evaluates~~has implemented internal stress capital ratio minimums 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.~~internal minimums. Breaches of ~~minimum targets~~internal stressed minimums prompt a review of the planned capital actions included in Truist’s capital plan.


Table 22: 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	%	7.0	%				CET1	4.5		%		NA	6.5	%			7.0	%
Tier 1 capital	Tier 1 capital	6.0		6.0	%	8.0		8.5							Tier 1 capital		6.0		6.0	%		8.0			8.5
Total capital	Total capital	8.0		10.0		10.0		10.5							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 requirement of 2.5% applicable to Truist as of March 31, ~~2022.~~2023. Truist’s SCB requirement, received in the ~~2021~~2022 CCAR process, is effective from October 1, ~~2021~~2022 to September 30, ~~2022.~~2023. Truist will receive a new preliminary SCB requirement, to become effective October 1, 2023, following the release of CCAR 2023 results in late June 2023.

Truist’s capital ratios are presented in the following table:
Table 23: Capital Ratios - Truist Financial Corporation
(Dollars in millions, except per share data, shares in thousands) Mar 31, 2022 Dec 31, 2021
Risk-based: (preliminary)
CET1 capital to risk-weighted assets 9.4 % 9.6 %
Tier 1 capital to risk-weighted assets 11.0 11.3
Total capital to risk-weighted assets 13.0 13.2
Leverage ratio 8.6 8.7
Supplementary leverage ratio 7.3 7.4
Non-GAAP capital measure (1):
Tangible common equity per common share $ 21.87 $ 25.47
Calculation of tangible common equity (1):
Total shareholders’ equity $ 65,044 $ 69,271
Less:
Preferred stock 6,673 6,673
Noncontrolling interests 23 —
Goodwill and intangible assets, net of deferred taxes 29,229 28,772
Tangible common equity $ 29,119 $ 33,826
Risk-weighted assets $ 397,611 $ 390,886
Common shares outstanding at end of period 1,331,414 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.~~


Table 23: Capital Ratios - Truist Financial Corporation
(Dollars in millions)	Mar 31, 2023			Dec 31, 2022
Risk-based:	(preliminary)
CET1	9.1		%	9.0		%
Tier 1 capital	10.6			10.5
Total capital	12.6			12.4
Leverage ratio	8.5			8.5
Supplementary leverage ratio	7.3			7.3
Risk-weighted assets	$	436,549		$	434,413

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 ~~three months ended March 31, 2022, Truist paid $637 million in common stock dividends or $0.48 per share.~~first quarter of 2023. The dividend ~~and total~~ payout ~~ratios~~ratio for the ~~three months ended March 31, 2022 were 48%~~first quarter of 2023 was 49%. Truist did not repurchase any shares in the first quarter of 2023 outside of standard activity related to equity compensation plans.

Truist CET1 ratio was ~~9.4%~~9.1% as of March 31, ~~2022.~~2023. The 20increase since December 31, 2022 represents organic capital generation, partially offset by the CECL phase-in. Truist closed the sale of the minority stake in Truist Insurance Holdings on April 3, 2023, which adds 30 basis ~~point decline compared~~points and 24 basis points to the ~~fourth quarter 2021 CET1 ratio reflects~~risk-based regulatory capital ~~deployed through the acquisition of Kensington Vanguard National Land Services, the acquisition of certain merchant services relationships, an increase in risk-weighted assets,~~ratios and ~~the impact from the phase in of the CECL transition relief.~~leverage ratios, respectively.

~~Truist Financial Corporation 61~~

Share Repurchase Activity

~~Share Repurchase Activity~~


Table 24: Share Repurchase Activity	Table 24: Share Repurchase Activity							Table 24: Share Repurchase Activity
(Dollars in millions, except per share data, shares in thousands)	(Dollars in millions, except per share data, shares in thousands)	Total Shares Repurchased (1)	Average Price Paid Per Share (2)		Total Shares Repurchased Pursuant to Publicly-Announced Plan (3)	Maximum Remaining Dollar Value of Shares Available for Repurchase Pursuant to Publicly-Announced Plan		(Dollars in millions, except per share data, shares in thousands)	Total Number of Shares Purchased(1)	Average Price Paid Per Share(2)		Total Number of Shares Purchased as part of Publicly Announced Plans(3)	Approximate Dollar Value of Shares that may yet be Purchased Under the Plans(3)
January 2022		—	$	—	—	$	2,565
February 2022		—	—		—	2,565
March 2022		47	58.02		—	2,565
January 1, 2023 to January 31, 2023								January 1, 2023 to January 31, 2023	—	$	—	—	$	4,100
February 1, 2023 to February 28, 2023								February 1, 2023 to February 28, 2023	2	48.84		—	4,100
March 1, 2023 to March 31, 2023								March 1, 2023 to March 31, 2023	31	32.10		—	4,100
Total	Total	47	58.02		—			Total	33	$	33.09	—

(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, authorizing up to $2.0 billion of share repurchases beginning in the first quarter of 2021.~~ 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 $2.6 billion remaining for share repurchases.~~2023.

Truist Financial Corporation 63

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. Material estimates that are particularly susceptible to significant change include the determination of the ACL; determination of fair value for securities, MSRs, LHFS, trading loans, and derivative assets and liabilities; goodwill and other intangible assets; income taxes; and pension and postretirement benefit 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, ~~2021.~~2022. 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, ~~2021.~~2022. Disclosures regarding the effects of new accounting pronouncements are included in ~~the~~ “Note 1. Basis of Presentation” in this report. There have been no changes to the significant accounting policies during ~~2022.~~2023.

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.

During the first quarter of 2022, Truist completed platform conversions related to its commercial, direct-to-consumer and mortgage lending portfolios, as well as platform conversions related to its deposits and payment processing systems. In connection with these activities, Truist fully integrated certain surviving applications into its general ledger accounting system. Internal controls and processes have been appropriately modified to address changes in key business applications and financial processes as a result of these implementations.

There were no ~~other~~ 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 March 31, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

~~62 Truist Financial Corporation~~

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, ~~2021.~~2022. 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.

64 Truist Financial Corporation

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 April 14, 2022.~~

~~10.1~~10.1*

Form of Restricted Stock Unit Agreement (Senior Executive – 60/5 Retirement) for the Truist Financial Corporation 2022 Incentive ~~Plan~~

~~Incorporated by reference to Annex B to the Corporation’s Definitive Proxy Statement (filed on March 14, 2022).~~

~~10.2~~

~~Letter to the Board of Directors from William H. Rogers Jr. dated, April 14, 2022, waiving certain rights under his employment agreement~~Plan.

Filed herewith.

~~10.3~~10.2*

Form of ~~Employee Restricted Stock~~Performance Unit Award Agreement (Senior Executive – 60/5 Retirement) for the Truist Financial Corporation 2022 Incentive ~~Plan~~Plan.

FFiled herewith.

10.3*

Form of Performance Unit Award Agreement (Senior Executive – 60/10 Retirement) for the Truist Financial Corporation 2022 Incentive Plan.

~~iled~~Filed herewith.

10.4*

Form of LTIP Award Agreement (Senior Executive – 60/5 Retirement) for the Truist Financial Corporation 2022 Incentive Plan.

Filed herewith.

10.5*

Form of LTIP Award Agreement (Senior Executive – 60/10 Retirement) for the Truist Financial Corporation 2022 Incentive Plan.

Filed herewith.

10.6*

2023 Employment Agreement by and between Truist Insurance Holdings, Inc. and John Howard.

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.

* Management compensatory plan or arrangement.

Truist Financial Corporation 6365

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:

May ~~4, 2022~~1, 2023

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:

May ~~4, 2022~~1, 2023

By:

/s/ Cynthia B. Powell

Cynthia B. Powell

Executive Vice President and Corporate Controller

(Principal Accounting Officer)

6466 Truist Financial Corporation


	As of/Year-to-Date Ended
(Dollars in millions)	Mar 31, 2022		Dec 31, 2021

UPB of CRE mortgages serviced for others	$	37,397	$	37,960
CRE mortgages serviced for others covered by recourse provisions	9,938		10,243
Maximum recourse exposure from CRE mortgages sold with recourse liability	2,861		2,958
Recorded reserves related to recourse exposure	15		16
CRE mortgages originated during the year-to-date period	1,557		9,380
Commercial MSRs at fair value	280		280


Table 11: Rollforward of Performing TDRs
(Dollars in millions)	2022		2021
Balance, January 1	$	1,390	$	1,361
Inflows	306		294
Payments and payoffs (1)	(60)		(57)
Charge-offs	(9)		(13)
Transfers to nonperforming TDRs (2)	(19)		(13)
Removal due to the passage of time	(71)		(7)
Non-concessionary re-modifications	(1)		(12)


Transferred to LHFS, sold and other	(21)		(14)
Balance, March 31	$	1,515	$	1,539


Table 12: Payment Status of TDRs (1)
March 31, 2022 (Dollars in millions)	Current				Past Due 30-89 Days				Past Due 90 Days Or More				Total
Performing TDRs:
Commercial:
Commercial and industrial	$	102	98.1	%	$	2	1.9	%	$	—	—	%	$	104
CRE	5		100.0		—		—		—		—		5
Commercial construction	1		100.0		—		—		—		—		1

Consumer:
Residential mortgage - government guaranteed	290		46.6		58		9.3		274		44.1		622
Residential mortgage - nonguaranteed	210		86.1		25		10.2		9		3.7		244
Residential home equity and direct	85		93.4		6		6.6		—		—		91
Indirect auto	336		85.7		56		14.3		—		—		392
Indirect other	5		83.3		1		16.7		—		—		6

Student - nonguaranteed	22		88.0		2		8.0		1		4.0		25
Credit card	22		88.0		2		8.0		1		4.0		25
Total performing TDRs	1,078		71.2		152		10.0		285		18.8		1,515
Nonperforming TDRs	57		30.2		24		12.7		108		57.1		189
Total TDRs	$	1,135	66.6		$	176	10.3		$	393	23.1		$	1,704


Table 21: Liquidity Sources
(Dollars in millions)	Mar 31, 2022		Dec 31, 2021
Unused borrowing capacity:
FRB	$	51,876	$	52,170
FHLB	45,961		49,244
Available investment securities (after haircuts)	110,327		116,600
Available secured borrowing capacity	208,164		218,014
Eligible cash at the FRB	23,060		14,714
Total	$	231,224	$	232,728