~~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, ~~2023~~2024

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, ~~2023, 1,331,917,887~~2024, 1,338,096,145 shares of the registrant’s common stock, $5 par value, were outstanding.

TABLE OF CONTENTS

TRUIST FINANCIAL CORPORATION

FORM 10-Q

March 31, ~~2023~~2024

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~~Discontinued Operations

Note 3. Securities Financing Activities

1112

Note 4. Investment Securities

1213

Note 5. Loans and ACL

1415

Note 6. Goodwill and Other Intangible Assets

2124

Note 7. Loan Servicing

2225

Note 8. Other Assets and Liabilities

2326

Note 9. Borrowings

2427

Note 10. Shareholders’ Equity

2528

Note 11. AOCI

2528

Note 12. Income Taxes

2629

Note 13. Benefit Plans

2629

Note 14. Commitments and Contingencies

2729

Note 15. Fair Value Disclosures

3033

Note 16. Derivative Financial Instruments

3437

Note 17. Computation of EPS

3842

Note 18. Operating Segments

3842

Note 19. Subsequent Events

Item 2.

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

Regulatory and Supervisory Considerations

4046

Executive Overview

4046

Analysis of Results of Operations

4248

Analysis of Financial Condition

4852

Risk Management

~~Liquidity~~

~~Capital~~

~~Share Repurchase activity~~Liquidity

6366

Capital

Critical Accounting Policies

6469

Item 3.

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

5562

Item 4.

Controls and Procedures

6470

PART II - Other Information

Item 1.

Legal Proceedings

6472

Item 1A.

Risk Factors

6472

Item 2.

Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities

6472

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

6573

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
AD and CL			Acquisition and development and commercial land
AFS			Available-for-sale
Agency MBS			Mortgage-backed securities issued by a U.S. government agency or GSE
ALCO			Asset and Liability Committee
ALLL			Allowance for loan and lease losses


AOCI			Accumulated other comprehensive income (loss)



BCBS			Basel Committee on Banking Supervision
~~BB&T~~BHC			~~BB&T Corporation and subsidiaries (changed to “Truist Financial Corporation” effective with the Merger)~~Bank holding company
BHCA

			Bank Holding Company Act of 1956, as amended
Board			Truist’s Board of Directors

BRC			Board Risk Committee

C&CB			Corporate and Commercial Banking, an operating segment
~~CARES Act~~			~~The Coronavirus Aid, Relief, and Economic Security Act~~ prior to the Company’s realignment as of January 1, 2024
CB&W			Consumer Banking and Wealth, an operating segment prior to the Company’s realignment as of January 1, 2024
CCAR			Comprehensive Capital Analysis and Review

CD			Certificate of deposit
CDI			Core deposit intangible
CECL			Current expected credit loss model
CEO			Chief Executive Officer
CET1			Common equity tier 1
CFO			Chief Financial Officer
~~CET1~~
CFTC			~~Common equity tier 1~~Commodity Futures Trading Commission

CIO			Chief Information Officer
~~CFPB~~			~~Consumer Financial Protection Bureau~~

Company			Truist Financial Corporation and its subsidiaries (interchangeable with “Truist” below)

~~COVID-19~~CP			~~Coronavirus disease 2019~~Construction and permanent

CRE			Commercial real estate


~~DEI~~			~~Diversity, Equity & Inclusion~~


~~DTA~~CSBB			~~Deferred tax asset~~Consumer and Small Business Banking, an operating segment after the Company’s realignment as of January 1, 2024


DIF			Deposit Insurance Fund administered by the FDIC





EPS			Earnings per common share
~~ESG~~			~~Environmental, Social, and Governance~~


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


FHLB			Federal Home Loan Bank
FHLMC			Federal Home Loan Mortgage Corporation

FNMA			Federal National Mortgage Association
FRB			Board of Governors of the Federal Reserve System
FTE			Full-time equivalent employee
GAAP			Accounting principles generally accepted in the United States of America
GCO			Governance and Controls Organization
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, ana discontinued operating segment following the announcement of the sale of TIH
IPV			Independent price verification

IRR			Interest rate risk

~~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~~

MRO			Model Risk Oversight
MSR			Mortgage servicing right

NA			Not applicable


NII			Net interest income
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)

Truist Financial Corporation 1


Term			Definition
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~~

~~Truist Financial Corporation 1~~


~~Term~~			~~Definition~~
ROU assets			Right-of-use assets

RSU			Restricted stock unit
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
TIH			Truist Insurance Holdings, LLC, an entity classified as held for sale
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~~a North Carolina-charted member bank
U.S.			United States of America
U.S. DOJ			United States Department of Justice
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
WB			Wholesale Banking, an operating segment after the Company’s realignment as of January 1, 2024

2 Truist Financial Corporation

Forward-Looking Statements

~~This Quarterly Report on Form 10-Q contains “forward-looking statements”~~From time to time we have made, and in the future will make, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of ~~1995, regarding~~1995. These statements can be identified by the ~~financial condition, results of operations, business plans and the future performance of Truist. Words~~fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as ~~“anticipates,~~“believe,” ~~“believes,~~“expect,” ~~“estimates,~~“anticipate,” ~~“expects,~~“intend,” ~~“forecasts,~~“pursue,” ~~“intends,~~“seek,” ~~“plans,~~“continue,” ~~“projects,~~“estimate,” “project,” “outlook,” “forecast,” “potential,” “target,” “objective,” “trend,” “plan,” “goal,” “initiative,” “priorities,” or other words of comparable meaning or future-tense or conditional verbs such as “may,” “will,” “should,” “would,” ~~“could,~~or “could.” ~~and other similar expressions are intended to identify these forward-looking statements.~~Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, or results.

~~Forward-looking~~This report, including any information incorporated by reference in this report, contains forward-looking statements. We also may make forward-looking statements in other documents that are ~~not based on historical facts but instead represent management’s expectations~~filed or furnished with the SEC. In addition, we may make forward-looking statements orally or in writing to investors, analysts, members of the media, and ~~assumptions regarding Truist’s business, the economy, and other future conditions. Such~~others. All forward-looking statements, ~~involve inherent uncertainties,~~by their nature, are subject to assumptions, risks, and ~~changes in circumstances that~~uncertainties, which may change over time and many of which are ~~difficult to predict. As such, Truist’s actual~~beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Actual future objectives, strategies, plans, prospects, performance, conditions, and results may differ materially from those ~~contemplated by~~set forth in any forward-looking ~~statements.~~statement. While ~~there can be~~ no ~~assurance that any~~ list of assumptions, risks, and uncertainties ~~or risk factors is~~could be complete, ~~important~~some of the factors that ~~could~~may cause actual results or other future events or circumstances to differ ~~materially~~ from those ~~contemplated by~~in 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, 2022:~~include:

•~~changes in the interest rate environment, including the replacement of LIBOR as an interest rate benchmark, could adversely affect Truist’s revenue~~evolving political, business, economic, and ~~expenses, the value of assets~~market conditions at local, regional, national, and ~~obligations, including our portfolio of investment securities, and the availability and cost of capital, cash flows, and liquidity;~~international levels;

•~~Truist is subject to credit risk~~monetary, fiscal, and trade laws or policies, including as a result of actions by ~~lending~~governmental agencies, central banks, or committing to lend money, 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, and may suffer losses if the value of collateral declines in stressed market conditions;supranational authorities;

•~~inability to access short-term funding or liquidity, loss of client deposits or~~the legal, regulatory, and supervisory environment, including changes in ~~Truist’s credit ratings could increase the cost of funding, limit access to capital markets,~~financial-services legislation, regulation, policies, or ~~negatively affect Truist’s overall liquidity~~government officials or ~~capitalization;~~other personnel;

•~~Truist~~our ability to address heightened scrutiny and expectations from supervisory or other governmental authorities and to timely and credibly remediate related concerns or deficiencies;

•judicial, regulatory, and administrative inquiries, examinations, investigations, proceedings, disputes, or rulings that create uncertainty for or are adverse to us or the financial-services industry;

•the outcomes of judicial, regulatory, and administrative inquiries, examinations, investigations, proceedings, or disputes to which we are or may be ~~impacted by actual~~subject and our ability to absorb and address any damages or ~~perceived soundness~~other remedies that are sought or awarded and any collateral consequences;

•evolving accounting standards and policies;

•the adequacy of ~~other~~our corporate governance, risk-management framework, compliance programs, and internal controls over financial ~~institutions,~~reporting, including our ability to control lapses or deficiencies in financial reporting, to make appropriate estimates, or to effectively mitigate or manage operational risk;

•any instability or breakdown in the financial system, including as a result of the ~~financial~~actual or ~~operational failure~~perceived soundness of ~~a major~~another 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~~another participant in 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;~~system;

•~~general economic~~disruptions and shifts in investor sentiment or ~~business conditions, either globally, nationally~~behavior in the securities, capital, 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 inother financial markets, ~~could result~~including financial or systemic shocks and volatility or changes in ~~among other things, slower deposit~~market liquidity, interest or ~~asset growth, a deterioration in credit quality,~~currency rates, or ~~a reduced demand for credit, insurance, or other services;~~valuations;

•~~the monetary~~our ability to cost-effectively fund our businesses and ~~fiscal policies of the federal government~~operations, including by accessing long- and ~~its agencies, including in response to higher inflation, could have a material adverse effect on the economy~~short-term funding and ~~Truist’s profitability;~~liquidity and by retaining and growing client deposits;

•changes in any of our credit ratings;

•our ability to manage any unexpected outflows of uninsured deposits ~~may require us to sell~~and avoid selling investment securities or other assets at an unfavorable time or at a loss;

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

•~~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;~~publicity or other reputational harm to us, our service providers, or our senior officers;

•~~risk management oversight functions may not identify~~business and consumer sentiment, preferences, or ~~address risks adequately, and management may not be able to effectively manage credit risk;~~behavior, including spending, borrowing, or saving by businesses or households;

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

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

•~~Truist could fail~~our ability to execute on strategic orand operational plans, including simplifying our businesses, achieving cost-savings targets and lowering expense growth, accelerating franchise momentum, and improving our capital position;

•changes in our corporate and business strategies, the composition of our assets, or the way in which we fund those assets;

•our ability to successfully make and integrate acquisitions and to effect divestitures, including the ability to successfully ~~complete or integrate mergers~~deploy the proceeds from the sale of TIH and ~~acquisitions;~~perform our obligations under the transition services arrangements supporting TIH in a cost-effective and efficient manner;

•~~increased competition,~~our ability to develop, maintain, and market our products or services or to absorb unanticipated costs or liabilities associated with those products or services;

•our ability to innovate, to anticipate the needs of current or future clients, to successfully compete, to increase or hold market share in changing competitive environments, or to deal with pricing or other competitive pressures;

•our ability to maintain secure and functional financial, accounting, technology, data processing, or other operating systems or infrastructure, including ~~from (i) new~~those that safeguard personal and other sensitive information;

•our ability to appropriately underwrite loans that we originate or ~~existing~~purchase and to otherwise manage credit risk, including in connection with commercial and consumer mortgage loans;

•our ability to satisfactorily and profitably perform loan servicing and similar obligations;

•the credit, liquidity, or other financial condition of our clients, counterparties, service providers, or competitors;

•our ability to effectively deal with economic, business, or market slowdowns or disruptions;

•the efficacy of our methods or models in assessing business strategies or opportunities or in valuing, measuring, estimating, monitoring, or managing positions or risk;

•our ability to keep pace with changes in technology that affect us or our clients, counterparties, service providers, or competitors ~~that could have greater financial resources~~ or ~~be subject~~ to ~~different regulatory standards~~maintain rights or ~~compliance costs,~~interests in associated intellectual property;

•our ability to attract, hire, and ~~(ii)~~retain key teammates and to engage in adequate succession planning;

•the performance and availability of third-party service providers on whom we rely in delivering products and services ~~offered by non-bank financial technology companies, may reduce Truist’s client base, cause Truist~~ to ~~lower prices for its products~~our clients and ~~services~~otherwise in ~~order to maintain market share or otherwise adversely impact Truist’s businesses or results of~~conducting our business and operations;

•~~failure~~our ability to ~~maintain or enhance Truist’s competitive position with respect to new products, services,~~detect, prevent, mitigate, 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 could damage Truist’s reputation and 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 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;

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

•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 could be adversely impacted, which could be exacerbated in the increased work-from-home environment 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~~otherwise manage the risk of fraud or misconduct by internal or external ~~parties, which Truist may not be able~~parties; our ability to ~~prevent, detect, or mitigate;~~

•~~security~~manage and mitigate physical-security and cybersecurity risks, including ~~denial of service~~denial-of-service attacks, hacking, ~~social engineering~~phishing, social-engineering attacks, ~~targeting Truist’s teammates and clients,~~ malware intrusion, ~~data corruption~~data-corruption attempts, system breaches, ~~cyberattacks, which have increased in frequency with 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~~destruction;

•natural or ~~reputation or create significant legal or financial exposure;~~other disasters, calamities, and conflicts, including terrorist events, cyber-warfare, and pandemics;

•widespread outages of operational, communication, orand other ~~systems, whether internal or provided by third parties, natural or~~systems;

•our ability to maintain appropriate ESG practices, oversight, and disclosures;

•policies and other ~~disasters (including acts~~actions of ~~terrorism~~governments to manage and ~~pandemics),~~mitigate climate and related environmental risks, and the effects of climate change ~~including physical risks, such as more frequent and intense weather events, and risks related to~~or the transition to a ~~lower carbon~~lower-carbon economy ~~such as regulatory~~on our business, operations, and reputation; and

•other assumptions, risks, or ~~technological changes or shifts~~uncertainties described in ~~market dynamics or consumer preferences, could have an adverse effect on Truist’s financial condition~~the Risk Factors (Item 1A), Management’s Discussion and ~~results~~Analysis of ~~operations, lead to material disruption~~Financial Condition and Results of ~~Truist’s operations~~Operations (Item 7), or the ~~ability~~Notes to the Consolidated Financial Statements (Item 8) in our Annual Report on Form 10-K or ~~willingness~~described in any of ~~clients to access Truist’s products and services.~~the Company’s subsequent quarterly or current reports.

~~Readers are cautioned not to place undue reliance~~Any forward-looking statement made by us or on ~~these forward-looking statements, which speak~~our behalf speaks only as of the date ~~they are~~that it was made. ~~Except~~We do not undertake to update any forward-looking statement to reflect the ~~extent~~impact of events, circumstances, or results that arise after the date that the statement was made, except as required by applicable ~~law~~securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, or ~~regulation, Truist undertakes no obligation to revise or update any forward-looking statements.~~Current Report on Form 8-K.

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)

Mar 31, 2023

Dec 31, 2022

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

Assets

Cash and due from banks

4,629

5,379

Cash and due from banks

Interest-bearing deposits with banks

32,967

16,042

Securities borrowed or purchased under agreements to resell

3,637

3,181

Securities borrowed or purchased under agreements to resell

Trading assets at fair value

4,601

4,905

AFS securities at fair value

71,858

71,801

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)

2,160

1,444

Loans and leases (including $17 and $18 at fair value, respectively)

327,673

325,991

AFS securities at fair value

HTM securities (fair value of $43,041 and $44,630, respectively)

LHFS (including $1,201 and $852 at fair value, respectively)

Loans and leases (including $14 and $15 at fair value, respectively)

ALLL

(4,479)

(4,377)

Loans and leases, net of ALLL

323,194

321,614

Loans and leases, net of ALLL

Premises and equipment

3,519

3,605

Goodwill

27,014

27,013

Goodwill

CDI and other intangible assets

3,535

3,672

Loan servicing rights at fair value

3,303

3,758

Other assets (including $1,549 and $1,582 at fair value, respectively)

37,005

35,128

Loan servicing rights at fair value

Other assets (including $1,359 and $1,311 at fair value, respectively)

Assets of discontinued operations

Total assets

574,354

555,255

Liabilities

Noninterest-bearing deposits

128,719

135,742

Interest-bearing deposits

276,278

277,753

Short-term borrowings (including $1,789 and $1,551 at fair value, respectively)

23,678

23,422

Noninterest-bearing deposits

Interest-bearing deposits (including $23 and $0 at fair value, respectively)

Short-term borrowings (including $2,034 and $1,625 at fair value, respectively)

Long-term debt

69,895

43,203

Other liabilities (including $2,589 and $2,971 at fair value, respectively)

13,390

14,598

Long-term debt

Other liabilities (including $2,990 and $2,597 at fair value, respectively)

Liabilities of discontinued operations

Total liabilities

511,960

494,718

Shareholders’ Equity

Preferred stock

6,673

Common stock, $5 par value

6,660

6,634

Common stock, $5 par value

Additional paid-in capital

34,582

34,544

Retained earnings

27,038

26,264

Retained earnings

AOCI, net of deferred income taxes

(12,581)

(13,601)

Noncontrolling interests

Total shareholders’ equity

62,394

60,537

Total liabilities and shareholders’ equity

574,354

555,255

Total liabilities and shareholders’ equity

Common shares outstanding

1,331,918

1,326,829

Common shares authorized

2,000,000

Common shares authorized

Preferred shares outstanding

223

Preferred shares authorized

5,000

Preferred shares authorized

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,

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

2023

2022

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

2024

Interest Income

Interest and fees on loans and leases

4,656

2,644

Interest and fees on loans and leases

Interest on securities

752

640

Interest on other earning assets

377

Interest on other earning assets

Total interest income

5,785

3,357

Interest Expense

Interest on deposits

1,125

Interest on long-term debt

514

132

Interest on long-term debt

Interest on other borrowings

278

Total interest expense

1,917

174

Total interest expense

Net Interest Income

3,868

3,183

Provision for credit losses

502

(95)

Provision for credit losses

Net Interest Income After Provision for Credit Losses

3,366

3,278

Noninterest Income

Insurance income

813

727

Noninterest Income

Wealth management income

339

343

Investment banking and trading income

261

Investment banking and trading income

Card and payment related fees

Service charges on deposits

249

252

Card and payment related fees

230

212

Service charges on deposits

Mortgage banking income

142

121

Lending related fees

106

Lending related fees

Operating lease income

Securities gains (losses)

—

(69)

Other income

152

Total noninterest income

2,234

2,142

Total noninterest income

Noninterest Expense

Personnel expense

2,181

2,051

Personnel expense

Professional fees and outside processing

314

363

Software expense

214

232

Software expense

Net occupancy expense

183

208

Amortization of intangibles

136

137

Amortization of intangibles

Equipment expense

110

118

Marketing and customer development

Operating lease depreciation

Regulatory costs

Merger-related and restructuring charges

216

Regulatory costs

Restructuring charges

Other expense

291

182

Total noninterest expense

3,691

3,674

Total noninterest expense

Earnings

Income before income taxes

1,909

1,746

Income before income taxes

Provision for income taxes

394

330

Provision for income taxes

Net income from continuing operations

Net income from discontinued operations

Net income

1,515

1,416

Noncontrolling interests

Net income

Noncontrolling interests from discontinued operations

Preferred stock dividends and other

103

Net income available to common shareholders

1,410

1,327

Net income available to common shareholders

Basic earnings from continuing operations

Basic EPS

1.06

1.00

Basic EPS

Diluted earnings from continuing operations

Diluted EPS

1.05

0.99

Basic weighted average shares outstanding

1,328,602

1,329,037

Basic weighted average shares outstanding

Diluted weighted average shares outstanding

1,339,480

1,341,563

Diluted weighted average shares outstanding

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)

Three Months Ended March 31,

2023

2022

Net income

1,515

1,416

Net income

OCI, net of tax:

Net change in net pension and postretirement costs

(14)

Net change in net pension and postretirement costs

Net change in cash flow hedges

125

Net change in AFS securities

853

(4,989)

Net change in AFS securities

Net change in HTM securities

Other, net

Total OCI, net of tax

1,020

(4,931)

Total OCI

2,535

(3,515)

Total OCI

Income Tax Effect of Items Included in OCI:

Net change in net pension and postretirement costs

(3)

Net change in net pension and postretirement costs

Net change in cash flow hedges

Net change in AFS securities

262

(1,513)

Net change in AFS securities

Net change in HTM securities

Total income taxes related to OCI

312

(1,497)

Total income taxes related to OCI

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)

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

Balance, January 1, 2022		1,327,818	$	6,673	$	6,639	$	34,565	$	22,998	$	(1,604)	$	—	$	69,271
Net income		—	—		—		—		1,415		—		1		1,416
OCI		—	—		—		—		—		(4,931)		—		(4,931)

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

Cash dividends declared on common stock		—	—		—		—		(637)		—		—		(637)
Cash dividends declared on preferred stock		—	—		—		—		(88)		—		—		(88)
Equity-based compensation expense		—	—		—		80		—		—		—		80

Other, net		—	—		—		—		—		—		22		22
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		—	—		—		—		1,513		—		2		1,515
OCI		—	—		—		—		—		1,020		—		1,020

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

Cash dividends declared on common stock		—	—		—		—		(691)		—		—		(691)
Cash dividends declared on preferred stock		—	—		—		—		(103)		—		—		(103)
Equity-based compensation expense		—	—		—		83		—		—		—		83

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

Balance, January 1, 2023

Balance, January 1, 2023
Net income
Net income
Net income
OCI
OCI
OCI

Issued in connection with equity awards, net

Issued in connection with equity awards, net

Issued in connection with equity awards, net

Cash dividends declared on common stock

Cash dividends declared on common stock

Cash dividends declared on common stock
Cash dividends declared on preferred stock
Cash dividends declared on preferred stock
Cash dividends declared on preferred stock
Equity-based compensation expense
Equity-based compensation expense
Equity-based compensation expense

Other, net

Other, net

Other, net
Balance, March 31, 2023
Balance, March 31, 2023
Balance, March 31, 2023
Balance, January 1, 2024
Balance, January 1, 2024
Balance, January 1, 2024
Net income
Net income
Net income
OCI
OCI
OCI

Issued in connection with equity awards, net

Issued in connection with equity awards, net

Issued in connection with equity awards, net

Cash dividends declared on common stock

Cash dividends declared on common stock

Cash dividends declared on common stock
Cash dividends declared on preferred stock
Cash dividends declared on preferred stock
Cash dividends declared on preferred stock
Equity-based compensation expense
Equity-based compensation expense
Equity-based compensation expense

Other, net

Other, net

Other, net
Balance, March 31, 2024
Balance, March 31, 2024
Balance, March 31, 2024

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

Truist Financial Corporation 7

CONSOLIDATED STATEMENTS OF CASH FLOWS(1)

TRUIST FINANCIAL CORPORATION AND SUBSIDIARIES

Unaudited
(Dollars in millions)

Three Months Ended March 31,

2023

2022

Cash Flows From Operating Activities:

Net income

1,515

1,416

Adjustments to reconcile net income to net cash from operating activities:

Provision for credit losses

502

(95)

Provision for credit losses

Depreciation

180

195

Amortization of intangibles

136

137

Securities (gains) losses

—

Amortization of intangibles

Net change in operating assets and liabilities:

LHFS

(846)

180

Loan servicing rights

(380)

LHFS

Pension asset

(1,346)

(410)

Derivative assets and liabilities

(12)

986

Derivative assets and liabilities

Trading assets

304

(1,497)

Trading assets

Other assets and other liabilities

(490)

(558)

Other, net

148

(231)

Other, net

Net cash from operating activities

118

(188)

Cash Flows From Investing Activities:

Proceeds from sales of AFS securities

3,127

Proceeds from maturities, calls and paydowns of AFS securities

1,279

5,259

Proceeds from maturities, calls and paydowns of AFS securities

Purchases of AFS securities

(140)

(7,219)

Proceeds from maturities, calls and paydowns of HTM securities

858

857

Purchases of HTM securities

—

(3,020)

Proceeds from maturities, calls and paydowns of HTM securities

Originations and purchases of loans and leases, net of sales and principal collected

(1,835)

(134)

Net cash received (paid) for FHLB stock

(1,147)

(1)

Net cash received (paid) for FHLB stock

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

—

(488)

Other, net

(613)

(121)

Net cash from investing activities

(2,050)

(34)

Net cash from investing activities

Cash Flows From Financing Activities:

Net change in deposits

(8,498)

11,842

Net change in deposits

Net change in short-term borrowings

224

(145)

Proceeds from issuance of long-term debt

35,029

Proceeds from issuance of long-term debt

Repayment of long-term debt

(8,444)

(1,699)

Cash dividends paid on common stock

(691)

(637)

Cash dividends paid on preferred stock

(103)

(88)

Net cash received (paid) for hedge unwinds

(378)

(198)

Other, net

(32)

(92)

Net cash from financing activities

17,107

9,049

Net Change in Cash and Cash Equivalents

15,175

8,827

Cash and Cash Equivalents, January 1

21,421

20,295

Cash and Cash Equivalents, March 31

36,596

29,122

Supplemental Disclosure of Cash Flow Information:

Net cash paid (received) during the period for:

Interest expense

1,667

156

Income taxes

Noncash investing activities:

Cash dividends paid on common stock

Cash dividends paid on preferred stock

Net cash received (paid) for hedge unwinds

Other, net

Net cash from financing activities

Net Change in Cash and Cash Equivalents

Cash and Cash Equivalents of Continuing and Discontinued Operations, January 1

Cash and Cash Equivalents of Continuing and Discontinued Operations, March 31

Supplemental Disclosure of Cash Flow Information:

Net cash paid (received) during the period for:

Interest expense

Income taxes

Transfer of AFS securities to HTM

—

59,436

(1)Cash flows of discontinued operations are reflected within operating, investing, and financing activities in the Consolidated Statements of Cash Flows. The cash balance of these operations is reported as assets of discontinued operations on the Consolidated Balance Sheets. Refer to “Note 2. Discontinued Operations” for additional information related to discontinued operations.

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, ~~2022~~2023 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.~~standards, as applicable, which are described in this footnote. 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, ~~2022~~2023 that could have a material effect on the Company’s financial statements.

Discontinued Operations

The Company classifies assets and liabilities as held for sale when management, having the authority to approve the action, commits to a plan to sell the disposal group, the sale is probable to occur within one year, and the disposal group is available for immediate sale in its present condition. The Company also considers whether an active program to locate a buyer has been initiated, whether the disposal group is marketed actively for sale at a price that is reasonable in relation to its current fair value, and whether actions required to complete the plan indicate it is unlikely significant changes to the plan will be made or the plan will be withdrawn. An asset or business that meets the criteria for held for sale classification is reported as discontinued operations when the disposal represents a strategic shift that has had or will have a major effect on the Company’s operating results.

Assets and liabilities of discontinued operations are presented separately in the Consolidated Balance Sheets for current and prior periods commencing in the period in which the asset or business meets all of the held for sale criteria described above. Net income from discontinued operations, net of tax, are separately reported in the Consolidated Statements of Income for current and prior periods commencing in the period in which the asset or business meets all of the held for sale criteria described above, including any gain or loss recognized on the sale or adjustment of the carrying amount to fair value less cost to sell.

Certain activity of TIH impacting the Company's footnote disclosures have been removed or revised. The footnote disclosures included herein are presented on a continuing operations basis, unless otherwise noted.

Refer to “Note 2. Discontinued Operations” for additional information.

Segment Realignment

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 conformaddition to the ~~current presentation. Certain~~reclassifications discussed above in the Consolidated Balance Sheets, Consolidated Statements of Income, and certain footnotes for discontinued operations and the segment realignment, as applicable, certain other amounts reported in prior periods’ consolidated financial statements have been reclassified to conform to the current presentation.

Truist Financial Corporation 9

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 Not Yet Adopted ~~During the Current Year~~
~~Troubled Debt Restructurings and Vintage~~Improvements to Income Tax Disclosures January 1, ~~2023~~2025	~~Eliminates TDRs, while enhancing disclosure requirements for~~Improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain ~~loan refinancings and restructurings by creditors made~~other amendments to ~~borrowers experiencing financial difficulty. Additionally, requires disclosure~~improve the effectiveness of ~~current-period gross write-offs by year~~income tax disclosures.	Truist is evaluating the impact of ~~origination for financing receivables and net investment in leases.~~	~~Truist adopted~~ this standard on ~~a modified-retrospective basis. Upon adoption,~~its disclosures. This standard relates to footnote disclosures only.
Improvements to Reportable Segment Disclosures December 31, 2024	Improves reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.	Truist is evaluating the ~~Company eliminated the separate ACL estimation process for loans classified as TDRs. The adoption~~impact of this standard ~~did not have a material impact~~ on ~~the financial statements. The Company’s revised~~its disclosures. This standard relates to footnote disclosures ~~in accordance with the new standard are included in “Note 5. Loans and ACL.”~~
Fair Value Hedging – Portfolio Layer Method January 1, 2023only.	Introduces the portfolio layer method, which expands the current single-layer method to allow multiple hedged layers of a single closed portfolio. Additionally, expands the scope of the portfolio layer method to include non-prepayable assets, specifies eligible hedging instruments in a single-layer hedge, provides additional guidance on the accounting for and disclosure of hedge basis adjustments under the portfolio layer method 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 early adopted this standard on a modified-retrospective basis. The adoption of this standard did not have a material impact on the financial statements. Refer to “Note 14. Commitments and Contingencies” for additional information regarding tax credit investments.

10 Truist Financial Corporation

NOTE 2. ~~Business Combinations, Divestitures, and Noncontrolling Interests~~

~~Noncontrolling Interest~~Discontinued Operations

On ~~April 3, 2023,~~February 20, 2024, the Company ~~completed its sale of a 20%~~entered into an agreement to sell the remaining stake of the common equity in ~~Truist Insurance Holdings, LLC~~TIH to an investor group led by Stone Point Capital LLC and Clayton, Dubilier & Rice for ~~$1.95 billion, with~~a purchase price that implied an enterprise value for TIH of $15.5 billion. The divestiture of TIH represents a strategic shift that has a major effect on our operations and financial results. The Company reclassified all of the ~~proceeds, net~~assets and liabilities of ~~tax, recognized as an increase~~TIH to ~~shareholders’ equity. In~~discontinued operations in connection with the ~~transaction,~~announcement of the ~~noncontrolling interest holder received profit interests representing 3.75% coverage on~~ disposition of the business. As such, financial information attributed to TIH has been recast to reflect discontinued operations for the periods presented herein. The following footnotes reflect impacts of discontinued operations: “Note 1. Basis of Presentation,” “Note 2. Discontinued Operations,” “Note 6. Goodwill and Other Intangible Assets,” “Note 8. Other Assets and Liabilities,” “Note 12. Income Taxes,” “Note 13. Benefit Plans,” “Note 17. Computation of EPS,” and “Note 18. Operating Segments.”

The following is a summary of the assets and liabilities of discontinued operations:


(Dollars in millions)	Mar 31, 2024		Dec 31, 2023
Assets of discontinued operations:
Cash and due from banks	$	83	$	72
Interest-bearing deposits with banks	352		342
Premises and equipment	66		72
Goodwill	3,745		3,745
CDI and other intangible assets	1,229		1,251
Other assets	2,297		2,173
Total assets of discontinued operations	$	7,772	$	7,655
Liabilities of discontinued operations:
Other liabilities	$	3,122	$	3,539
Total liabilities of discontinued operations	$	3,122	$	3,539

The following presents operating results of TIH classified as discontinued operations:


(Dollars in millions)	Three Months Ended March 31,
	2024		2023
Interest Income
Interest on other earning assets	$	24	$	1
Total interest income	24		1
Noninterest income
Insurance income	$	892	$	815
Other income	5		3
Total noninterest income	897		818
Expenses
Personnel expense	634		513
Professional fees and outside processing	48		27
Software expense	17		14
Net occupancy expense	15		14
Amortization of intangibles	21		36
Equipment expense	9		8
Marketing and customer development	10		10

Restructuring charges	19		7
Other expense	58		52
Total noninterest expense	831		681
Earnings
Income before income taxes from discontinued operations	90		138
Provision for income taxes	23		33
Net income from discontinued operations	67		105
Noncontrolling interests	3		2
Net income from discontinued operations attributable to controlling interest	$	64	$	103

The components of net cash provided by operating, investing, and financing activities of discontinued operations included in the Consolidated Statements of Cash Flows are as follows:


(Dollars in millions)	Three Months Ended March 31,
	2024		2023
Net cash from operating activities	$	(346)	$	(134)
Net cash from investing activities	(4)		(7)
Net cash from financing activities	373		(45)

Truist ~~Insurance Holdings’ fully diluted equity value at transaction close, and certain consent and exit rights commensurate with a noncontrolling investor.~~Financial Corporation 11

On May 6, 2024, the Company completed the sale, which resulted in after-tax cash proceeds to Truist of approximately $10.1 billion. The transaction improves Truist’s relative capital position and allows Truist to maintain strategic ~~flexibility~~flexibility. Upon closing, the transaction resulted in a full deconsolidation of the TIH subsidiary from Truist and ~~future upside~~resulted in an approximate after-tax gain of approximately $4.7 billion. Refer to “Note 19. Subsequent Events” for additional information.

In connection with the sale of TIH, the Company has entered into various agreements with entities controlled by the buyers and TIH, including a transition services agreement and several commercial agreements, ranging from one to seven years. The transition services agreement includes the following support services: information technology, finance and accounting, human resources, marketing and communications, procurement, and real estate. The Company will be compensated for such services on a monthly basis. The commercial agreements represent arrangements for both the Company and TIH to continue engaging in certain business activities after the completion of the sale. Such activities include referral services and certain brokerage and administration services. In addition, TIH will retain its depository relationship with Truist ~~Insurance Holdings, which will continue to benefit from Truist’s~~Bank after completion of the sale. TIH holds the majority of its cash in depository accounts with Truist Bank. TIH held $1.2 billion and $1.6 billion of deposits at Truist Bank as of March 31, 2024 and December 31, 2023, respectively. Such deposits are not presented in assets of discontinued 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 Stone Point Capital.~~as they are eliminated upon consolidation.

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, 2023		Dec 31, 2022		(Dollars in millions)	Mar 31, 2024	Dec 31, 2023
Securities purchased under agreements to resell	Securities purchased under agreements to resell	$	2,685	$	2,415
Securities borrowed	Securities borrowed	952		766
Total securities borrowed or purchased under agreements to resell	Total securities borrowed or purchased under agreements to resell	$	3,637	$	3,181

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 collateral permitted to be resold or repledged
Fair value of collateral permitted to be resold or repledged
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, 2023				December 31, 2022
		March 31, 2024
		March 31, 2024
		March 31, 2024																December 31, 2023
(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	30-90 days	Total	Overnight and Continuous	Up to 30 days	Total
U.S. Treasury	U.S. Treasury	$	631	$	10	$	641	$	318	$	—	$	318
State and Municipal	State and Municipal	297		—		297		272		—		272
GSE		23		—		23		74		—		74
Agency MBS - residential		666		6		672		1,019		26		1,045

Agency MBS – residential
Agency MBS – residential
Agency MBS – residential
Corporate and other debt securities	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	$	1,802	$	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.

12 Truist Financial Corporation 11

NOTE 4. Investment Securities

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


March 31, 2023 (Dollars in millions)		Amortized Cost			Gross Unrealized					Fair Value
				Gains			Losses
March 31, 2024 (Dollars in millions)

March 31, 2024 (Dollars in millions)

				Gains
		Gains
AFS securities:
AFS securities:
AFS securities:	AFS securities:
U.S. Treasury	U.S. Treasury	$	11,083		$	2		$	644	$	10,441
U.S. Treasury
U.S. Treasury
GSE	GSE	332			—			31		301
Agency MBS - residential		64,382			1			9,208		55,175
Agency MBS - commercial		2,872			—			474		2,398
GSE
GSE
Agency MBS – residential
Agency MBS – residential
Agency MBS – residential
Agency MBS – commercial
Agency MBS – commercial
Agency MBS – commercial
States and political subdivisions
States and political subdivisions
States and political subdivisions	States and political subdivisions	425			17			17		425
Non-agency MBS	Non-agency MBS	3,884			—			786		3,098
Non-agency MBS
Non-agency MBS
Other	Other	20			—			—		20
Other
Other
Total AFS securities, excluding portfolio level basis adjustments
Total AFS securities, excluding portfolio level basis adjustments
Total AFS securities, excluding portfolio level basis adjustments
Portfolio level basis adjustments(1)
Portfolio level basis adjustments(1)
Portfolio level basis adjustments(1)
Total AFS securities	Total AFS securities	$	82,998		$	20		$	11,160	$	71,858
Total AFS securities
Total AFS securities
HTM securities:
HTM securities:
HTM securities:	HTM securities:

Agency MBS - residential		$	56,932		$	—		$	8,835	$	48,097
Agency MBS – residential

Agency MBS – residential

Agency MBS – residential

December 31, 2022 (Dollars in millions)		Amortized Cost			Gross Unrealized					Fair Value
				Gains			Losses
AFS securities:
U.S. Treasury		$	11,080		$	—		$	785	$	10,295
GSE		339			—			36		303
Agency MBS - residential		65,377			—			10,152		55,225
Agency MBS - commercial		2,887			—			463		2,424
States and political subdivisions		425			15			24		416
Non-agency MBS		3,927			—			810		3,117
Other		21			—			—		21
Total AFS securities		$	84,056		$	15		$	12,270	$	71,801
HTM securities:

Agency MBS - residential		$	57,713		$	—		$	9,922	$	47,791
December 31, 2023 (Dollars in millions)

December 31, 2023 (Dollars in millions)

December 31, 2023 (Dollars in millions)

		Gains
		Gains
AFS securities:
AFS securities:
AFS securities:
U.S. Treasury
U.S. Treasury
U.S. Treasury
GSE
GSE
GSE
Agency MBS – residential
Agency MBS – residential
Agency MBS – residential
Agency MBS – commercial
Agency MBS – commercial
Agency MBS – commercial
States and political subdivisions
States and political subdivisions
States and political subdivisions
Non-agency MBS
Non-agency MBS
Non-agency MBS
Other
Other
Other

Total AFS securities

Total AFS securities

Total AFS securities
HTM securities:
HTM securities:
HTM securities:

Agency MBS – residential

Agency MBS – residential

Agency MBS – residential

(1)Represents fair value hedge basis adjustments related to active portfolio layer method hedges, which are not allocated to individual securities. For additional information, refer to “Note 16. Derivative Financial Instruments.”

The amortized cost and estimated fair value of certain MBS securities issued by FNMA and FHLMC that exceeded 10% of shareholders’ equity are shown in the table below:

March 31, 2023

March 31, 2024

(Dollars in millions)

Amortized Cost

Fair Value

(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 have the right to prepay their obligations with or without penalties.
Amortized Cost Fair Value
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:
U.S. Treasury $ 2,587 $ 8,448 $ 19 $ 29 $ 11,083 $ 2,528 $ 7,869 $ 18 $ 26 $ 10,441
GSE — 7 11 314 332 — 7 10 284 301
Agency MBS - residential — 65 580 63,737 64,382 — 62 547 54,566 55,175
Agency MBS - commercial 1 7 71 2,793 2,872 1 7 68 2,322 2,398
States and political subdivisions 3 94 139 189 425 3 93 148 181 425
Non-agency MBS — — — 3,884 3,884 — — — 3,098 3,098
Other 6 — 14 — 20 6 — 14 — 20
Total AFS securities $ 2,597 $ 8,621 $ 834 $ 70,946 $ 82,998 $ 2,538 $ 8,038 $ 805 $ 60,477 $ 71,858
HTM securities:
Agency MBS - residential $ — $ — $ — $ 56,932 $ 56,932 $ — $ — $ — $ 48,097 $ 48,097


	Amortized Cost										Fair Value
March 31, 2024 (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:
U.S. Treasury	$	2,871	$	6,566	$	14	$	29	$	9,480	$	2,850	$	6,133	$	13	$	24	$	9,020
GSE	—		7		12		366		385		—		7		11		332		350
Agency MBS – residential	—		120		447		61,378		61,945		—		113		420		50,617		51,150
Agency MBS – commercial	—		—		71		2,751		2,822		—		—		66		2,142		2,208
States and political subdivisions	49		48		168		155		420		48		47		174		150		419
Non-agency MBS	—		—		214		3,434		3,648		—		—		164		2,720		2,884
Other	—		7		12		—		19		—		7		12		—		19
Total AFS securities	$	2,920	$	6,748	$	938	$	68,113	$	78,719	$	2,898	$	6,307	$	860	$	55,985	$	66,050
HTM securities:


Agency MBS – residential	$	—	$	—	$	—	$	53,369	$	53,369	$	—	$	—	$	—	$	43,041	$	43,041

12 Truist Financial Corporation 13

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
March 31, 2023 (Dollars in millions)		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	Less than 12 months																Less than 12 months			12 months or more				Total
March 31, 2024 (Dollars in millions)														March 31, 2024 (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	$	1,267	$	27	$	8,977	$	617	$	10,244	$	644
GSE	GSE	112		5		175		26		287		31
Agency MBS - residential		1,267		65		53,717		9,143		54,984		9,208
Agency MBS - commercial		318		24		2,066		450		2,384		474
Agency MBS – residential
Agency MBS – commercial
States and political subdivisions	States and political subdivisions	42		1		210		16		252		17
Non-agency MBS	Non-agency MBS	—		—		3,098		786		3,098		786
Other	Other	5		—		15		—		20		—
Total	Total	$	3,011	$	122	$	68,258	$	11,038	$	71,269	$	11,160
HTM securities:	HTM securities:													HTM securities:

Agency MBS - residential		$	—	$	—	$	48,097	$	8,835	$	48,097	$	8,835
Agency MBS – residential

Agency MBS – residential

Agency MBS – residential

		Less than 12 months
		Less than 12 months				12 months or more				Total
December 31, 2022 (Dollars in millions)		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

		Less than 12 months

		Less than 12 months																12 months or more				Total
December 31, 2023 (Dollars in millions)														December 31, 2023 (Dollars in millions)	Fair Value	Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

AFS securities:
AFS securities:
AFS securities:	AFS securities:
U.S. Treasury	U.S. Treasury	$	2,069	$	49	$	8,186	$	736	$	10,255	$	785
GSE	GSE	180		14		114		22		294		36
Agency MBS - residential		25,041		3,263		30,050		6,889		55,091		10,152
Agency MBS - commercial		790		92		1,631		371		2,421		463
Agency MBS – residential
Agency MBS – commercial
States and political subdivisions	States and political subdivisions	251		21		20		3		271		24
Non-agency MBS	Non-agency MBS	—		—		3,117		810		3,117		810
Other	Other	21		—		—		—		21		—
Total	Total	$	28,352	$	3,439	$	43,118	$	8,831	$	71,470	$	12,270
HTM securities:	HTM securities:													HTM securities:

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

Agency MBS – residential

Agency MBS – residential

At March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, no ACL was established for AFS or HTM securities. Substantially all of the unrealized losses on the securities portfolio, including non-agency MBS, were the result of changes in market interest rates compared to the date the securities were acquired rather than the credit quality of the issuers or underlying loans. HTM debt securities consist of residential agency MBS. Accordingly, the Company does not expect to incur any credit losses on investment securities.

~~The following table presents gross securities gains and losses recognized in earnings:~~
(Dollars in millions) Three Months Ended March 31,
2023 2022
Gross realized gains $ — $ 13
Gross realized losses — (82)
Securities gains (losses), net $ — $ (69)

14 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.


			Accruing
March 31, 2023 (Dollars in millions)			Current		30-89 Days Past Due		90 Days Or More Past Due(1)		Nonperforming		Total
		Accruing
March 31, 2024 (Dollars in millions)
March 31, 2024 (Dollars in millions)
March 31, 2024 (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		$	166,663	$	125	$	35	$	394	$	167,217
CRE	CRE		22,519		34		—		117		22,670
Commercial construction	Commercial construction		5,947		3		—		1		5,951

Consumer:	Consumer:
Consumer:
Consumer:
Residential mortgage
Residential mortgage
Residential mortgage	Residential mortgage		55,057		491		674		233		56,455
Home equity	Home equity		10,370		65		10		132		10,577
Indirect auto	Indirect auto		26,498		511		—		270		27,279
Other consumer	Other consumer		27,523		164		10		45		27,742
Student			4,046		356		594		—		4,996

Credit card
Credit card
Credit card	Credit card		4,692		56		38		—		4,786

Total	Total		$	323,315	$	1,805	$	1,361	$	1,192	$	327,673
(1)Includes government guaranteed loans of $649 million in the residential mortgage portfolio and $590 million in the student portfolio.
Total
Total
(1)Includes government guaranteed loans of $408 million in the residential mortgage portfolio.													(1)Includes government guaranteed loans of $408 million in the residential mortgage portfolio.

			Accruing
December 31, 2022 (Dollars in millions)			Current		30-89 Days Past Due		90 Days Or More Past Due(1)		Nonperforming		Total
			Accruing
			Accruing
			Accruing
December 31, 2023 (Dollars in millions)
December 31, 2023 (Dollars in millions)
December 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		$	163,604	$	256	$	49	$	398	$	164,307
CRE	CRE		22,568		25		1		82		22,676
Commercial construction	Commercial construction		5,844		5		—		—		5,849

Consumer:	Consumer:
Consumer:
Consumer:
Residential mortgage
Residential mortgage
Residential mortgage	Residential mortgage		55,005		614		786		240		56,645
Home equity	Home equity		10,661		68		12		135		10,876
Indirect auto	Indirect auto		27,015		646		1		289		27,951
Other consumer	Other consumer		27,289		187		13		44		27,533
Student			4,179		402		706		—		5,287

Credit card
Credit card
Credit card	Credit card		4,766		64		37		—		4,867

Total	Total		$	320,931	$	2,267	$	1,605	$	1,188	$	325,991
(1)Includes government guaranteed loans of $759 million in the residential mortgage portfolio and $702 million in the student portfolio.
Total
Total
(1)Includes government guaranteed loans of $418 million in the residential mortgage portfolio.													(1)Includes government guaranteed loans of $418 million in the residential mortgage portfolio.

14 Truist Financial Corporation 15

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


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
March 31, 2024 (Dollars in millions)

March 31, 2024 (Dollars in millions)

2024
2024
Commercial:
Commercial:
Commercial:	Commercial:
Commercial and industrial:	Commercial and industrial:
Commercial and industrial:
Commercial and industrial:
Pass
Pass
Pass	Pass	$	9,673	$	41,280	$	19,702	$	10,213	$	7,556	$	13,686	$	59,715	$	—		$	(217)	$	161,608
Special mention	Special mention	56		585		357		113		83		137		643		—			—		1,974
Special mention
Special mention
Substandard
Substandard
Substandard	Substandard	65		745		375		166		452		440		998		—			—		3,241
Nonperforming	Nonperforming	1		55		50		41		22		57		168		—			—		394
Nonperforming
Nonperforming
Total
Total
Total	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
Gross charge-offs
Gross charge-offs
CRE:
CRE:
CRE:	CRE:
Pass	Pass	1,042		5,649		3,269		2,302		3,426		3,902		834		—			(74)		20,350
Pass
Pass
Special mention
Special mention
Special mention	Special mention	6		273		113		74		289		208		—		—			—		963
Substandard	Substandard	38		223		47		33		526		372		1		—			—		1,240
Substandard
Substandard
Nonperforming
Nonperforming
Nonperforming	Nonperforming	—		37		3		2		—		75		—		—			—		117
Total	Total	1,086		6,182		3,432		2,411		4,241		4,557		835		—			(74)		22,670
Total
Total
Gross charge-offs
Gross charge-offs
Gross charge-offs	Gross charge-offs	—		2		—		—		—		4		—		—			—		6
Commercial construction:	Commercial construction:
Commercial construction:
Commercial construction:
Pass
Pass
Pass	Pass	219		1,628		1,618		636		219		157		1,021		—			—		5,498
Special mention	Special mention	37		84		36		176		—		—		1		—			—		334
Special mention
Special mention
Substandard
Substandard
Substandard	Substandard	1		39		6		19		—		53		—		—			—		118
Nonperforming	Nonperforming	—		—		—		—		1		—		—		—			—		1
Nonperforming
Nonperforming
Total	Total	257		1,751		1,660		831		220		210		1,022		—			—		5,951
Total
Total
Gross charge-offs
Gross charge-offs
Gross charge-offs

Consumer:

Consumer:

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

Current

Current

Current	Current	649		13,827		17,194		6,076		3,037		14,274		—		—			—		55,057
30 - 89 days past due	30 - 89 days past due	2		33		57		25		29		345		—		—			—		491
30 - 89 days past due
30 - 89 days past due
90 days or more past due
90 days or more past due
90 days or more past due	90 days or more past due	—		11		29		50		56		528		—		—			—		674
Nonperforming	Nonperforming	—		6		11		9		12		195		—		—			—		233
Nonperforming
Nonperforming
Total
Total
Total	Total	651		13,877		17,291		6,160		3,134		15,342		—		—			—		56,455
Gross charge-offs	Gross charge-offs	—		—		1		—		—		—		—		—			—		1
Gross charge-offs
Gross charge-offs
Home equity:
Home equity:
Home equity:	Home equity:

Current	Current													6,506		3,864			—		10,370

Current

Current
30 - 89 days past due
30 - 89 days past due
30 - 89 days past due	30 - 89 days past due													44		21			—		65
90 days or more past due	90 days or more past due													6		4			—		10
90 days or more past due
90 days or more past due
Nonperforming
Nonperforming
Nonperforming	Nonperforming													46		86			—		132
Total	Total	—		—		—		—		—		—		6,602		3,975			—		10,577
Total
Total
Gross charge-offs	Gross charge-offs	—		—		—		—		—		—		2		—			—		2
Gross charge-offs
Gross charge-offs
Indirect auto:
Indirect auto:
Indirect auto:	Indirect auto:

Current	Current	2,077		10,757		6,504		3,667		2,147		1,339		—		—			7		26,498

Current

Current
30 - 89 days past due	30 - 89 days past due	6		147		130		82		70		76		—		—			—		511

30 - 89 days past due
30 - 89 days past due
90 days or more past due
90 days or more past due
90 days or more past due
Nonperforming
Nonperforming
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
Total
Total
Gross charge-offs	Gross charge-offs	—		39		34		17		16		21		—		—			—		127
Gross charge-offs
Gross charge-offs
Other consumer:
Other consumer:
Other consumer:	Other consumer:

Current	Current	2,915		10,324		5,181		2,777		1,563		1,690		3,053		20			—		27,523

Current

Current
30 - 89 days past due
30 - 89 days past due
30 - 89 days past due	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	—		8		1		—		—		—		1		—			—		10
90 days or more past due
90 days or more past due
Nonperforming
Nonperforming
Nonperforming	Nonperforming	—		4		15		10		6		9		—		1			—		45
Total	Total	2,919		10,407		5,233		2,807		1,585		1,711		3,058		22			—		27,742
Gross charge-offs		—		45		25		14		10		5		6		—			—		105
Student:
Current		—		—		—		16		66		3,964		—		—			—		4,046
30 - 89 days past due		—		—		—		—		1		355		—		—			—		356
90 days or more past due		—		—		—		—		1		593		—		—			—		594

Total
Total	Total	—		—		—		16		68		4,912		—		—			—		4,996
Gross charge-offs	Gross charge-offs	—		—		—		—		—		5		—		—			—		5
Credit card:
Current														4,675		17			—		4,692
30 - 89 days past due														54		2			—		56
90 days or more past due														36		2			—		38

Total		—		—		—		—		—		—		4,765		21			—		4,786
Gross charge-offs	Gross charge-offs	—		—		—		—		—		—		50		1			—		51
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

Credit card:

Credit card:

Credit card:
Current
Current
Current
30 - 89 days past due
30 - 89 days past due
30 - 89 days past due
90 days or more past due
90 days or more past due
90 days or more past due

Total

Total

Total
Gross charge-offs
Gross charge-offs
Gross charge-offs
Total
Total
Total
Gross charge-offs
Gross charge-offs
Gross charge-offs

16 Truist Financial Corporation 15


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
December 31, 2023 (Dollars in millions)

December 31, 2023 (Dollars in millions)

2023
2023
Commercial:
Commercial:
Commercial:	Commercial:
Commercial and industrial:	Commercial and industrial:
Commercial and industrial:
Commercial and industrial:
Pass
Pass
Pass	Pass	$	45,890	$	21,642	$	11,219	$	8,258	$	4,977	$	9,686			$	57,854				$	—	$	(199)	$	159,327
Special mention	Special mention	243		302		143		160		61		88		721				—			—		1,718
Special mention
Special mention
Substandard
Substandard
Substandard	Substandard	518		387		113		413		249		187		997				—			—		2,864
Nonperforming	Nonperforming	47		53		10		28		46		27		187				—			—		398
Nonperforming
Nonperforming
Total	Total	46,698		22,384		11,485		8,859		5,333		9,988		59,759				—			(199)		164,307
Total
Total
Gross charge-offs
Gross charge-offs
Gross charge-offs
CRE:
CRE:
CRE:	CRE:
Pass	Pass	6,141		3,595		2,220		3,846		2,092		2,265		757				—			(70)		20,846
Pass
Pass
Special mention
Special mention
Special mention	Special mention	106		118		74		229		281		5		18				—			—		831
Substandard	Substandard	106		99		35		422		121		134		—				—			—		917
Substandard
Substandard
Nonperforming
Nonperforming
Nonperforming	Nonperforming	—		3		—		—		77		2		—				—			—		82
Total	Total	6,353		3,815		2,329		4,497		2,571		2,406		775				—			(70)		22,676
Total
Total
Gross charge-offs
Gross charge-offs
Gross charge-offs
Commercial construction:
Commercial construction:
Commercial construction:	Commercial construction:
Pass	Pass	1,501		1,500		825		290		212		71		1,056				—			—		5,455
Pass
Pass
Special mention
Special mention
Special mention	Special mention	80		—		93		—		—		—		35				—			—		208
Substandard	Substandard	114		—		18		1		53		—		—				—			—		186
Substandard
Substandard
Nonperforming
Nonperforming
Nonperforming
Total
Total
Total
Gross charge-offs
Gross charge-offs
Gross charge-offs

Total		1,695		1,500		936		291		265		71		1,091				—			—		5,849

Consumer:

Consumer:

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

Current

Current

Current	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	55		61		32		37		43		386		—				—			—		614
30 - 89 days past due
30 - 89 days past due
90 or more days past due
90 or more days past due
90 or more days past due	90 or more days past due	5		31		62		62		91		535		—				—			—		786
Nonperforming	Nonperforming	4		6		10		12		17		191		—				—			—		240
Nonperforming
Nonperforming
Total	Total	13,888		17,438		6,271		3,195		1,535		14,318		—				—			—		56,645
Total
Total
Gross charge-offs
Gross charge-offs
Gross charge-offs
Home equity:
Home equity:
Home equity:	Home equity:

Current	Current													6,843				3,818			—		10,661

Current

Current
30 - 89 days past due
30 - 89 days past due
30 - 89 days past due	30 - 89 days past due													48				20			—		68
90 days or more past due	90 days or more past due													9				3			—		12
90 days or more past due
90 days or more past due
Nonperforming
Nonperforming
Nonperforming	Nonperforming													44				91			—		135
Total	Total	—		—		—		—		—		—		6,944				3,932			—		10,876
Total
Total
Gross charge-offs
Gross charge-offs
Gross charge-offs
Indirect auto:
Indirect auto:
Indirect auto:	Indirect auto:

Current	Current	11,646		7,141		4,105		2,461		1,096		559		—				—			7		27,015

Current

Current
30 - 89 days past due
30 - 89 days past due
30 - 89 days past due	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
90 days or more past due
Nonperforming
Nonperforming
Nonperforming	Nonperforming	41		77		56		56		34		25		—				—			—		289
Total	Total	11,835		7,392		4,272		2,617		1,190		638		—				—			7		27,951
Total
Total
Gross charge-offs
Gross charge-offs
Gross charge-offs
Other consumer:
Other consumer:
Other consumer:	Other consumer:

Current	Current	11,270		5,805		3,167		1,814		865		1,061		3,278				29			—		27,289

Current

Current
30 - 89 days past due
30 - 89 days past due
30 - 89 days past due	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	8		1		1		1		—		—		2				—			—		13
90 days or more past due
90 days or more past due
Nonperforming
Nonperforming
Nonperforming	Nonperforming	4		11		8		9		2		8		2				—			—		44
Total	Total	11,350		5,861		3,202		1,844		877		1,076		3,292				31			—		27,533
Student:
Total
Total
Gross charge-offs
Gross charge-offs
Gross charge-offs
Student:(2)
Student:(2)
Student:(2)

Gross charge-offs

Gross charge-offs

Gross charge-offs
Credit card:
Credit card:
Credit card:
Current
Current
Current	Current	—		—		17		71		57		4,034		—				—			—		4,179
30 - 89 days past due	30 - 89 days past due	—		—		—		1		1		400		—				—			—		402
30 - 89 days past due
30 - 89 days past due
90 days or more past due
90 days or more past due
90 days or more past due	90 days or more past due	—		—		—		1		1		704		—				—			—		706

Total	Total	—		—		17		73		59		5,138		—				—			—		5,287
Credit card:
Current														4,750				16			—		4,766
30 - 89 days past due														63				1			—		64
90 days or more past due														36				1			—		37

Total	Total	—		—		—		—		—		—		4,849				18			—		4,867

Total	Total	$	91,819	$	58,390	$	28,512	$	21,376	$	11,830	$	33,635	$	76,710			$	3,981		$	(262)	$	325,991
Gross charge-offs
Gross charge-offs
Gross charge-offs
Total
Total
Total
Gross charge-offs
Gross charge-offs
Gross charge-offs

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

(2)Truist sold its student loan portfolio at the end of the second quarter of 2023. Charge-offs include $98 million related to the sale.

16 Truist Financial Corporation 17

ACL

The following tables present activity in the ACL:


(Dollars in millions)	(Dollars in millions)	Balance at Jan 1, 2022		Charge-Offs		Recoveries		Provision (Benefit)		Other(1)		Balance at Mar 31, 2022

(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
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:
Consumer:
Consumer:
Residential mortgage
Residential mortgage
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		117		(6)		—		3		1		115
Student(2)
Credit card	Credit card	350		(41)		9		30		—		348

ALLL
ALLL
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)
(Dollars in millions)	(Dollars in millions)	Balance at Jan 1, 2023		Charge-Offs		Recoveries		Provision (Benefit)		Other(1)		Balance at Mar 31, 2023			Balance at Jan 1, 2024		Charge-Offs		Recoveries		Provision (Benefit)		Other(1)		Balance at Mar 31, 2024
Commercial:	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:
Consumer:
Consumer:
Residential mortgage
Residential mortgage
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		98		(5)		—		5		—		98

Credit card
Credit card
Credit card	Credit card	360		(51)		9		40		(3)		355

ALLL
ALLL
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.

(2)Truist sold its student loan portfolio at the end of the second quarter of 2023.

The commercial ALLL increased ~~$156~~$27 million and the consumer ALLL decreased ~~$49~~$25 million for the three months ended March 31, ~~2023.~~2024. The increase in the commercial ALLL primarily reflects ~~loan growth~~an increase in reserves related to the CRE and ~~increased economic uncertainty.~~commercial construction portfolios. The decrease in the consumer ALLL ~~was~~ primarily ~~driven by the impact~~reflects a reduction in loan volume and consideration of ~~the Troubled Debt Restructurings~~continued performance and ~~Vintage Disclosures accounting standard, under which reasonable expectations of TDRs are no longer considered,~~improved outlook in consumer real estate, partially offset by increased economic uncertainty. Considerations for the increased economic uncertainty include the potential impacts related to the risks associated with inflation, rising rates, geopolitical events, and recession.an increase in certain consumer non-real estate portfolios.

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. Forecasts of macroeconomic variables used in loss forecasting include, but are not limited to, unemployment trends, U.S. real GDP, corporate credit spreads, ~~rental rates,~~ property values, home price indices, and used car prices.

The ~~primary~~overall 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, ~~2023~~2024 ACL, unchanged since December 31, ~~2022.~~2023. While the scenario weightings were unchanged, ~~each forecast scenario reflected deterioration~~the economic outlook relative to the prior period varied by economic variables, including improvement in certain ~~economic~~ variables (e.g., House Price Index) and projected softness in others over the reasonable and supportable forecast ~~period when compared to the prior~~ period. The ~~primary~~overall economic forecast shaping the ACL estimate at March 31, ~~2023~~2024 included GDP growth in the low-single digits and an unemployment rate near the mid-single digits.

18 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, ~~2023~~2024 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, ~~2022~~2023 for additional information.

NPAs

The following table provides a summary of nonperforming loans and leases, excluding LHFS:


		March 31, 2023				December 31, 2022
		Recorded Investment				Recorded Investment
		March 31, 2024
		March 31, 2024
		March 31, 2024
		Recorded Investment
		Recorded Investment
		Recorded Investment
(Dollars in millions)
(Dollars in millions)
(Dollars in millions)	(Dollars in millions)	Without an ALLL		With an ALLL		Without an ALLL		With an ALLL
Commercial:	Commercial:
Commercial:
Commercial:
Commercial and industrial
Commercial and industrial
Commercial and industrial	Commercial and industrial	$	68	$	326	$	120	$	278
CRE	CRE	11		106		75		7
CRE
CRE
Commercial construction
Commercial construction
Commercial construction	Commercial construction	—		1		—		—

Consumer:	Consumer:

Consumer:

Consumer:
Residential mortgage
Residential mortgage
Residential mortgage	Residential mortgage	—		233		4		236
Home equity	Home equity	1		131		2		171
Home equity
Home equity
Indirect auto
Indirect auto
Indirect auto	Indirect auto	—		270		3		286
Other consumer	Other consumer	—		45		—		6
Other consumer
Other consumer

Total

Total

Total	Total	$	80	$	1,112	$	204	$	984

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

(Dollars in millions)

Mar 31, 2023

Dec 31, 2022

(Dollars in millions)

Nonperforming loans and leases HFI

1,192

1,188

Nonperforming loans and leases HFI

Nonperforming LHFS

Foreclosed real estate

Other foreclosed property

Total nonperforming assets

1,261

1,250

Residential mortgage loans in the process of foreclosure

226

248

Residential mortgage loans in the process of foreclosure

Loan Modifications

The following ~~table summarizes~~tables summarize the ~~period-end~~ amortized cost basis and the weighted average financial effect 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
Three Months Ended March 31, 2024 (Dollars in millions)
Three Months Ended March 31, 2024 (Dollars in millions)
Three Months Ended March 31, 2024 (Dollars in millions)
Commercial:
Commercial:
Commercial:	Commercial:
Commercial and industrial	Commercial and industrial	$	390	$	51	$	—	$	—	$	—	$	—	$	—	$	—	$	441	0.26	%
Commercial and industrial
Commercial and industrial
CRE
CRE
CRE	CRE	103		—		—		71		—		—		—		—		174		0.77
Commercial construction	Commercial construction	1		—		—		—		—		—		—		—		1		0.02
Commercial construction
Commercial construction
Consumer:
Consumer:
Consumer:	Consumer:
Residential mortgage	Residential mortgage	—		29		32		25		1		92		20		4		203		0.36
Residential mortgage
Residential mortgage
Home equity
Home equity
Home equity	Home equity	—		—		—		—		2		—		—		1		3		0.03
Indirect auto	Indirect auto	—		5		—		5		5		—		—		6		21		0.08
Indirect auto
Indirect auto
Other consumer	Other consumer	—		5		—		—		1		—		—		1		7		0.03

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

18Truist Financial Corporation 19


Three Months Ended March 31, 2023 (Dollars in millions)	Renewals		Term Extensions		Capitalizations		Payment Delays		Combination - Interest Rate Adjustment 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	%

Three Months Ended March 31, 2024

Loan Type

Financial Effect

Renewals

Commercial and industrial

Extended the term by 11 months and increased the interest rate by 0.5%

CRE

Extended the term by 6 months and increased the interest rate by 0.5%

Commercial construction

Extended the term by 11 months and increased the interest rate by 0.1%

Term Extensions

Residential mortgage

Extended the term by 105 months.

Indirect auto

Extended the term by 26 months.

Other consumer

Extended the term by 26 months.

Capitalizations

Residential mortgage

Capitalized a portion of forborne loan and other advanced payments into the outstanding loan balance.

Payment Delays

Commercial and industrial

Provided 90 days of payment deferral.

CRE

Provided 90 days of payment deferral.

Residential mortgage

Provided 193 days of payment deferral.

Indirect auto

Provided 186 days of payment deferral.

Combination - Interest Rate Adjustment and Term Extension

Home equity

Extended the term by 275 months and decreased the interest rate by 3%.

Indirect auto

Extended the term by 33 months and decreased the interest rate by 3%.

Other consumer

Extended the term by 61 months and increased the interest rate by 0.025%.

Combination - Capitalization and Term Extension

Residential mortgage

Capitalized a portion of forborne loan and other advanced payments into the outstanding loan balance and extended the term by 85 months.

Combination - Capitalization, Interest Rate and Term Extension

Residential mortgage

Capitalized a portion of forborne loan and other advanced payments into the outstanding loan balance, extended the term by 134 months, and decreased the interest rate by 0.5%.

20 Truist Financial Corporation

Three Months Ended March 31, 2023

Loan Type

Financial Effect

Renewals

Commercial and industrial

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

CRE

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

Commercial construction

Extended the term by 5 months.

Term Extensions

Commercial and industrial

Extended the term by 3 months.

Residential mortgage

Extended the term by 158 months.

Indirect auto

Extended the term by 25 months.

Other Consumer

Extended the term by 25 months.

Capitalizations

Residential mortgage

Capitalized a portion of forborne loan and other advanced payments into the outstanding loan balance.

Payment Delays

CRE

Provided 233 days of payment deferral.

Residential mortgage

Provided 195 days of payment deferral.

Indirect auto

Provided 129 days of payment deferral.

Combination - Interest Rate Adjustment and Term Extension

Residential mortgage

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

Home equity

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

Indirect auto

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

Other consumer

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

Combination - Capitalization and Term Extension

Residential mortgage

Capitalized a portion of forborne loan and other advanced payments into the outstanding loan balance and extended the term by 111 months.

Combination - Capitalization, Interest Rate and Term Extension

Residential mortgage

Capitalized a portion of forborne loan and other advanced payments into the outstanding loan balance, extended the term by 82 months, and decreased the interest rate by 0.3%.

The ~~table~~tables above ~~excludes~~exclude trial modifications totaling $40 million and $64 million ~~as of~~for the three months ended March 31, ~~2023.~~2024 and 2023, respectively. 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, 2024 and December 31, 2023, Truist had ~~$353~~$489 million and $702 million, respectively, 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~~lend additional funds 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.~~

difficulty for which Truist has modified the terms of the receivables in the ways described above during the twelve months preceding March 31, 2024 and December 31, 2023, respectively.

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 1921

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 period-end delinquency status and amortized cost of loans that were modified in the last 12 months. The period-end delinquency status of loans that were modified ~~during~~are disclosed at amortized cost and reflect the ~~quarter:~~impact of any paydowns, payoffs, and/or charge-offs that occurred subsequent to modification.

Payment Status (Amortized Cost Basis)

March 31, 2023

(Dollars in millions)

Current

30-89 Days Past Due

90 Days or More Past Due

Total

Payment Status (Amortized Cost Basis)

March 31, 2024

(Dollars in millions)

March 31, 2024

(Dollars in millions)

March 31, 2024

(Dollars in millions)

Commercial:

Commercial and industrial

406

441

Commercial and industrial

CRE

174

—

174

Commercial construction

—

Commercial construction

Consumer:

Residential mortgage

153

203

Residential mortgage

Home equity

—

Indirect auto

Other consumer

—

Other consumer

Credit card

Total

766

855

Total

Total nonaccrual loans included above

131

180

Total nonaccrual loans included above

Payment Status (Amortized Cost Basis)

December 31, 2023

(Dollars in millions)

December 31, 2023

(Dollars in millions)

December 31, 2023

(Dollars in millions)

Commercial:

Commercial and industrial

CRE

Commercial construction

Consumer:

Residential mortgage

Home equity

Indirect auto

Other consumer

Credit card

Total

Total nonaccrual loans included above

22 Truist Financial Corporation

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


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
March 31, 2024 (Dollars in millions)
March 31, 2024 (Dollars in millions)
March 31, 2024 (Dollars in millions)
Commercial:	Commercial:
Commercial:
Commercial:
Commercial and industrial
Commercial and industrial
Commercial and industrial	Commercial and industrial	$	34	$	—	$	—	$	—	$	—	$	—	$	—	34

Consumer:	Consumer:

Consumer:

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

Indirect auto	Indirect auto	—		—		—		—		—		—		1		1

Indirect auto

Indirect auto

Credit card

Credit card

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

December 31, 2023 (Dollars in millions)

December 31, 2023 (Dollars in millions)

December 31, 2023 (Dollars in millions)
Commercial:
Commercial:
Commercial:
Commercial and industrial
Commercial and industrial
Commercial and industrial
CRE
CRE
CRE

Consumer:

Consumer:

Consumer:
Residential mortgage
Residential mortgage
Residential mortgage

Indirect auto

Indirect auto

Indirect auto

Credit card

Credit card

Credit card
Total
Total
Total

~~TDRs~~

~~The following table presents a summary of TDRs:~~


~~(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~~

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.

~~20 Truist Financial Corporation~~

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)

Mar 31, 2023

Dec 31, 2022

(Dollars in millions)

Unearned income, discounts, and net deferred loan fees and costs

299

269

Unearned income, discounts, and net deferred loan fees and costs

Truist Financial Corporation 23

NOTE 6. Goodwill and Other Intangible Assets

In conjunction with these realignments, goodwill of $1.7 billion was realigned to WB from CSBB based on the relative fair value of CSBB and Wealth, and goodwill of $220 million was realigned to CSBB from WB based on the relative fair value of WB and the realigned small business banking client segmentation. In addition, the Company completed an assessment of any potential goodwill impairment for all impacted reporting units immediately prior and subsequent to the realignments and determined that no impairment existed. The quantitative valuation of WB performed in conjunction with these goodwill realignments indicated that as of January 1, 2024, the fair value of the WB reporting unit exceeded its carrying value by less than 10%, indicating that the goodwill of the WB reporting unit may be at risk of impairment.

The Company ~~performed a qualitative assessment of current~~monitored events and circumstances during the period from January 1, 2024 to March 31, 2024, 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~~January 1, ~~2022 qualitative impairment test.~~2024 quantitative valuations associated with the realignments of goodwill, and the sensitivity of the January 1, 2024 quantitative results to changes in assumptions as of March 31, 2024. Based on these considerations, 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, 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, 2022 for additional information.2024.

The changes in the carrying amount of goodwill attributable to operating segments are reflected in the table below. Activity during ~~2023~~2024 primarily 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.~~segment realignment described above. Refer to “Note 2. ~~Business Combinations” in Truist’s Annual Report on Form 10-K for the year ended December 31, 2022~~Discontinued Operations” for additional information ~~on the acquisitions~~related to discontinued operations and “Note 18. Operating Segments” for additional information on segments.

(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



(Dollars in millions)	CSBB		WB		Total







Goodwill, December 31, 2023	$	13,503	$	3,653	$	17,156
Segment realignment	(1,498)		1,498		—


Adjustments and other	—		1		1
Goodwill, March 31, 2024	$	12,005	$	5,152	$	17,157

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




			March 31, 2023									December 31, 2022									March 31, 2024				December 31, 2023
(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		$	2,473		$	(1,465)		$	1,008		$	2,473		$	(1,403)		$	1,070
Other, primarily client relationship intangibles	Other, primarily client relationship intangibles		3,802			(1,275)			2,527			3,812			(1,210)			2,602
Total	Total		$	6,275		$	(2,740)		$	3,535		$	6,285		$	(2,613)		$	3,672

24 Truist Financial Corporation 21

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)

Mar 31, 2023

Dec 31, 2022

(Dollars in millions)

UPB of residential mortgage loan servicing portfolio

272,323

274,028

UPB of residential mortgage loans serviced for others, primarily agency conforming fixed rate

214,830

217,046

UPB of residential mortgage loans serviced for others, primarily agency conforming fixed rate

Mortgage loans sold with recourse

200

Maximum recourse exposure from mortgage loans sold with recourse liability

128

127

Maximum recourse exposure from mortgage loans sold with recourse liability

Indemnification, recourse and repurchase reserves

As of / For the Three Months Ended March 31,
(Dollars in millions)

2023

2022

As of / For the Three Months Ended March 31,
(Dollars in millions)

UPB of residential mortgage loans sold from LHFS

2,507

8,818

Pre-tax gains recognized on mortgage loans sold and held for sale

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

0.27

0.31

Approximate weighted average servicing fee on the outstanding balance of residential mortgage loans serviced for others

Weighted average interest rate on mortgage loans serviced for others

3.52

3.41

Weighted average interest rate on mortgage loans serviced for others

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)

2023

2022

(Dollars in millions)

Residential MSRs, carrying value, January 1

3,428

2,305

Additions

147

Additions

Sales

(428)

—

Sales

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)

Realization of expected net servicing cash flows, passage of time, and other

Residential MSRs, carrying value, March 31

2,986

2,692

(1)The ~~first quarter of~~three months ended March 31, 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, 2023								December 31, 2022
		Range				Weighted Average				Range								Weighted Average
	March 31, 2024																										March 31, 2024							December 31, 2023
	Range																									Range					Weighted Average				Range							Weighted Average
(Dollars in millions)	(Dollars in millions)	Min		Max			Weighted Average				Min				Max						Weighted Average
Prepayment speed
Prepayment speed
Prepayment speed	Prepayment speed	7.7	%	14.0	%	8.3			%			8.6	%			12.5	%			9.0		%	6.5	%	17.3	%		7.3	%			6.7	%			18.2	%			7.5	%
Effect on fair value of a 10% increase	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					(167)												(211)
OAS	OAS	1.7	%	12.1	%	4.6		%		1.2		%		11.4		%		4.0		%	OAS		2.4	%	11.9	%		4.5	%			2.2	%			12.0	%			4.6	%
Effect on fair value of a 10% increase	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					(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					99.5		%										99.5		%	Fixed-rate residential mortgage loans									99.6	%												99.6	%
Adjustable-rate residential mortgage loans	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					7.1 years												6.8 years			Weighted average life							7.6 years										7.5 years

The sensitivity calculations above are hypothetical and should not be considered 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.

22 Truist Financial Corporation 25

Commercial Mortgage Activities

The following table summarizes commercial mortgage servicing activities:


(Dollars in millions)
(Dollars in millions)
(Dollars in millions)	(Dollars in millions)	Mar 31, 2023		Dec 31, 2022		Mar 31, 2024	Dec 31, 2023
UPB of CRE mortgages serviced for others	UPB of CRE mortgages serviced for others	$	36,245	$	36,622
CRE mortgages serviced for others covered by recourse provisions	CRE mortgages serviced for others covered by recourse provisions	9,829		9,955
Maximum recourse exposure from CRE mortgages sold with recourse liability	Maximum recourse exposure from CRE mortgages sold with recourse liability	2,820		2,861
Recorded reserves related to recourse exposure	Recorded reserves related to recourse exposure	16		17
CRE mortgages originated during the year-to-date period	CRE mortgages originated during the year-to-date period	1,041		7,779
Commercial MSRs at fair value	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, 2024

		March 31, 2024

		March 31, 2024																		December 31, 2023

		March 31, 2023						December 31, 2022

(Dollars in millions)

(Dollars in millions)

(Dollars in millions)	(Dollars in millions)	Operating Leases			Finance Leases			Operating Leases			Finance Leases			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

Total lease liabilities

Total lease liabilities
Weighted average remaining term	Weighted average remaining term	6.4 years			5.4 years			6.6 years			5.6 years			Weighted average remaining term	6.1 years			6.6 years				6.2 years			6.6 years
Weighted average discount rate	Weighted average discount rate	2.8		%	3.4		%	2.7		%	3.4		%	Weighted average discount rate	3.2	%		5.2	%			3.1	%		5.1	%

Three Months Ended March 31,

(Dollars in millions)

2023

2022

Operating lease costs

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.~~leases held for investment. This table excludes subleases on assets included in premises and equipment.

(Dollars in millions)

Mar 31, 2023

Dec 31, 2022

Assets held under operating leases(1)

2,090

(Dollars in millions)

Mar 31, 2024

Dec 31, 2023

Assets held under operating leases(1)(2)

Accumulated depreciation

(554)

(550)

Accumulated depreciation

Net

1,536

1,540

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

(2)Excludes operating leases held-for-sale that totaled $40 million and $32 million at March 31, 2024 and December 31, 2023, respectively.

Bank-Owned Life Insurance

Bank-owned life insurance consists of life insurance policies held on certain teammates for which the Company is the beneficiary. The carrying value of bank-owned life insurance was $7.7 billion at March 31, ~~2023~~2024 and ~~$7.6 billion at~~ December 31, ~~2022.~~2023.

26 Truist Financial Corporation 23

NOTE 9. Borrowings

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

(Dollars in millions)

Mar 31, 2023

Dec 31, 2022

FHLB advances

18,900

FHLB advances

Securities sold under agreements to repurchase

2,122

2,128

Securities sold short

1,789

1,551

Collateral in excess of derivative exposures

455

403

Master notes

310

370

Securities sold short

Other short-term borrowings

102

Total short-term borrowings

23,678

23,422

Total short-term borrowings

The following table presents a summary of long-term debt:

(Dollars in millions)

Mar 31, 2023

Dec 31, 2022

(Dollars in millions)

Mar 31, 2024

Dec 31, 2023

Carrying Amount

(Dollars in millions)

Carrying Amount

Truist Financial Corporation:

Fixed rate senior notes(1)

Floating rate senior notes

Fixed rate subordinated notes(1)(2)

Capital notes(2)

Truist Bank:

Fixed rate senior notes

16,059

14,107

Floating rate senior notes

999

Fixed rate subordinated notes(1)

1,895

1,882

Capital notes(1)

626

625

Structured notes(2)

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

Fixed rate subordinated notes(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

Total long-term debt

(1)Certain senior and subordinated notes convert from fixed to floating one year prior to maturity, and are callable within the final year of maturity at par.

(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.

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

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

24 Truist Financial Corporation 27

NOTE 10. Shareholders’ Equity

Common Stock

The following table presents total dividends declared per share of common stock:
Three Months Ended March 31,
2023 2022
Cash dividends declared per share $ 0.52 $ 0.48


	Three Months Ended March 31,
		2024		2023
Cash dividends declared per share		$	0.52	$	0.52

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.


(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		$	(86)	$	(9)	$	(1,510)	$	—	$	1	$	(1,604)
OCI before reclassifications, net of tax		2		—		(5,036)		—		1		(5,033)
AFS Securities transferred to HTM, net of tax		—		—		2,872		(2,872)		—		—
Amounts reclassified from AOCI:
Before tax		8		6		61		57		—		132
Tax effect		2		1		14		13		—		30
Amounts reclassified, net of tax		6		5		47		44		—		102
Total OCI, net of tax		8		5		(4,989)		44		1		(4,931)
AOCI balance, March 31, 2022		$	(78)	$	(4)	$	(3,627)	$	(2,828)	$	2	$	(6,535)

(Dollars in millions)

(Dollars in millions)														Pension and OPEB Costs	Cash Flow Hedges	AFS Securities	HTM Securities	Other, net	Total
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:
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)
AOCI balance, January 1, 2024
OCI before reclassifications, net of tax

Amounts reclassified from AOCI:
Amounts reclassified from AOCI:
Amounts reclassified from AOCI:
Before tax
Tax effect
Amounts reclassified, net of tax
Total OCI, net of tax
AOCI balance, March 31, 2024

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

28 Truist Financial Corporation 25

NOTE 12. Income Taxes

For the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, the provision for income taxes from continuing operations was ~~$394~~$232 million and ~~$330~~$361 million, respectively, representing effective tax rates of ~~20.6%~~17.0% and ~~18.9%~~20.4%, respectively. The ~~higher~~lower effective tax rate for the three months ended March 31, ~~2023~~2024 was primarily due to ~~higher income before taxes, discrete tax expense recognized~~a decrease in the 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.full year forecasted pre-tax earnings. 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,

(Dollars in millions)

Income Statement Location

2023

2022

Service cost

Personnel expense

139

(Dollars in millions)

Service cost(1)

Interest cost

Other expense

111

Estimated return on plan assets

Other expense

(228)

(269)

Estimated return on plan assets

Amortization and other

Other expense

Net periodic (benefit) cost

(4)

(34)

Net periodic (benefit) cost

(1)Includes $7 million for the three months ended March 31, 2024 and 2023 of service cost reported in net income from discontinued operations for the qualified defined benefit pension plan for employees of TIH. Following the sale of TIH, Truist will (i) no longer recognize the service costs for TIH employees, (ii) retain the related postretirement benefit obligation for TIH employees, and (iii) remeasure the postretirement benefit obligation of the plan.

Truist makes contributions to the qualified pension plans up to the maximum amount deductible for federal income tax purposes. ~~Discretionary contributions totaling $1.3 billion were made~~Truist did not make a discretionary contribution to the ~~Truist~~ pension plan during the three months ended March 31, ~~2023.~~2024.

~~26 Truist Financial Corporation~~

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, 2023

Dec 31, 2022

(Dollars in millions)

Balance Sheet Location

Mar 31, 2024

Dec 31, 2023

Investments in affordable housing projects and other qualified tax credits:

Carrying amount

Other assets

5,765

5,869

Amount of future funding commitments included in carrying amount

Other liabilities

1,726

1,762

Lending exposure

Loans and leases for funded amounts

1,625

1,547

Renewable energy investments:

Carrying amount

Other assets

272

264

Amount of future funding commitments not included in carrying amount

444

361

SBIC and certain other equity method investments:

Carrying amount

Other assets

597

596

Carrying amount

Amount of future funding commitments not included in carrying amount

597

532

Truist Financial Corporation 29

The following table presents a summary of tax credits and amortization expense associated with the Company’s tax credit investment activity. Activity related to the Company’s renewable energy investments, other than qualified tax credits, was immaterial.
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 started being recognized in the Provision for income taxes as of the adoption of this standard. This activity was previously recognized in Other income. Refer to “Note 1. Basis of Presentation” for additional information.


		Three Months Ended March 31,
(Dollars in millions)	Income Statement Location	2024		2023
Tax credits:


Investments in affordable housing projects, other qualified tax credits, and other community development investments	Provision for income taxes	$	185	$	157

Amortization and other changes in carrying amount:
Investments in affordable housing projects and other qualified tax credits	Provision for income taxes	$	171	$	148
Other community development investments	Other noninterest income	2		2

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, 2023		Dec 31, 2022		(Dollars in millions)	Mar 31, 2024	Dec 31, 2023
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	200		200
CRE mortgages serviced for others covered by recourse provisions	CRE mortgages serviced for others covered by recourse provisions	9,829		9,955
Other loans serviced for others covered by recourse provisions		759		723
Other loans serviced for others covered by recourse and other provisions
Letters of credit	Letters of credit	6,158		6,030

~~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 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)

Mar 31, 2023

Dec 31, 2022

(Dollars in millions)

Mar 31, 2024

Dec 31, 2023

Total return swaps:

VIE assets

1,880

1,830

VIE assets

Trading loans and bonds

1,801

1,790

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, 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 clients via the TRS contracts. For additional information on TRS contracts and the related VIEs, see “Note 16. Derivative Financial Instruments.”

30 Truist Financial Corporation

Pledged Assets

Certain assets were pledged to secure municipal deposits, securities sold under agreements to repurchase, certain derivative agreements, and borrowings or borrowing capacity, as well as to fund certain obligations related to nonqualified defined benefit and defined contribution retirement plans and for other purposes as required or permitted by law. Assets pledged to the FHLB and FRB are subject to applicable asset discounts when determining borrowing capacity. The Company has capacity for secured financing from both the FRB and FHLB and letters of credit from the 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)

Mar 31, 2023

Dec 31, 2022

(Dollars in millions)

Mar 31, 2024

Dec 31, 2023

Pledged securities

71,890

38,012

Pledged loans:

FRB

75,018

71,234

FHLB

70,766

68,988

Unused borrowing capacity:

FRB

53,291

49,250

FRB

FHLB

24,678

20,770

~~Litigation~~Legal Proceedings and ~~Regulatory~~Other Matters

Truist ~~and/or~~and its subsidiaries are routinely named as defendants in or parties to numerous actual or threatened legal proceedings ~~including civil~~and other matters and are or may be subject to potential liability in connection with them. The legal proceedings and other matters may be formal or informal and include litigation and arbitration with one or more identified claimants, certified or purported class actions with yet-to-be-identified claimants, and regulatory or other governmental information-gathering requests, examinations, investigations, and enforcement proceedings. Claims may be based in law or ~~enforcement matters,~~equity—such as those arising ~~from the ordinary conduct~~under contracts or in tort and those involving banking, consumer-protection, securities, antitrust, tax, employment, and other laws—and some present novel legal theories, allegations 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, ordemands for injunctive or ~~other relief. Investigations may involve both formal~~similar relief, and ~~informal proceedings, by both governmental agencies and self-regulatory organizations, and could result in~~requests for fines, penalties, restitution, ~~and/~~or alterations in Truist’s business practices. ~~These~~Our legal proceedings ~~are at~~and other matters exist in varying stages of adjudication, arbitration, negotiation, or investigation and span our business lines and operations.

The course and outcome of legal proceedings and other matters are inherently unpredictable. This is especially so when a matter is still in its early stages, the damages sought are indeterminate or unsupported, significant facts are unclear or disputed, novel questions of law or other meaningful legal uncertainties exist, a request to certify a proceeding as a class action is outstanding or granted, multiple parties are named, or regulatory or other governmental entities are involved. As a result, we often are unable to determine how or when actual or threatened legal proceedings and other matters will be resolved and what losses may ~~consist of a variety of claims, including common law tort~~be incrementally 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.ultimately incurred. 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 proceedings and other 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 evaluated each quarter and may be adjusted, upward or downward, based on ~~management’s~~our best judgment after consultation with counsel and others. No assurance exists that our accruals will not need to be adjusted in the future. Actual losses may be higher or lower than any amounts accrued, possibly to a significant degree.

~~28 Truist Financial Corporation~~

The Company estimates reasonably possible losses, in excess of amounts accrued, of up to approximately ~~$200~~$375 million as of March 31, ~~2023.~~2024. This estimate does not represent Truist’s maximum loss exposure, and actual losses may vary significantly. Also, the outcome of a particular matter may be one that the Company did not take into account in its estimate because the Company judged the likelihood of that outcome to be remote. In addition, the matters underlying this estimate ~~will~~may change from time to time. Estimated losses, like accruals, 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.~~judgment.

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~~matter provide additional information sufficient to support such an estimate. ~~Such~~These matters are not accrued for and are not reflected in the estimate of reasonably possible losses.

Truist Financial Corporation 31

The following is a description of certain legal proceedings and other matters 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~~alleges 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~~The amended complaint asserts 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. The ~~Company previously filed~~class seeks a ~~motion~~return of up to $452 million in paid overdraft fees from the 2006 to 2017 period above, plus prejudgment interest which, based on the amount of claimed fees, was estimated to be approximately $407 million as of March 31, 2024. A court-ordered mediation was held on February 28, 2024, but no resolution was reached. On March 4, 2024, the trial court issued an order granting in part and denying in part Truist’s motions to amend the class definition ~~in which it sought~~ to narrow the scope of the class, ~~and renewed motions~~ to compel arbitration against certain class members, ~~which~~and for summary judgment. Truist and the ~~court found were premature. On September 22, 2022,~~class filed separate notices of appeal from the trial court’s order, and Truist has filed a notice of cross-appeal. The trial court ~~entered a scheduling order holding that~~suspended the ~~court will consider such motions after discovery, which is ongoing, is completed. Trial is presently set to commence on~~previously scheduled trial date of April 29, ~~2024. The Company continues to believe that the underlying claims are without merit.~~2024, related pre-trial deadlines pending appeal.

~~United Services Automobile Association v. Truist Bank~~Recordkeeping Matters

~~USAA filed a lawsuit on July 29, 2022 against~~The SEC and CFTC have requested information from various subsidiaries of the Company ~~in the United States District Court~~that conduct broker-dealer, investment adviser, and swap dealer activities regarding compliance with applicable recordkeeping requirements 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.business-related electronic communications. The Company ~~filed its answer~~has cooperated with these requests and ~~affirmative defenses on October 11, 2022, denying that it infringes any~~is in advanced discussions regarding resolutions of these matters with the ~~patents at issue in~~agencies though there can be no assurance as to 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.outcome of these discussions.

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).Investigation Regarding Trusts

In 2016 and 2018, the Civil Division of the U.S. DOJ issued subpoenas to a corporate predecessor of Truist Bank under the Financial Institutions Reform, Recovery, and Enforcement Act. These subpoenas requested documents and other information related to specified trusts for which Truist Bank serves as trustee. Truist Bank is continuing to cooperate in the investigation.

FDIC Special Assessment

In November 2023, the FDIC issued a final rule to implement a special assessment to recoup losses to the DIF associated with bank failures in the first half of 2023. The assessment is based on an insured depository institution’s estimated uninsured deposits reported as of December 31, 2022. The special assessment for Truist is $582 million, with $507 million recognized in the fourth quarter of 2023 and an additional $75 million recognized in the first quarter of 2024 due to an increase in the estimated relevant losses to the DIF reported by the FDIC in February 2024. The special assessment will be paid in eight quarterly installments beginning in the second quarter of 2024. The ultimate amount of expenses associated with the special assessment will also be impacted by the finalization of the losses incurred by the FDIC in the resolutions of Silicon Valley Bank and Signature Bank, which could result in additional expense.

32 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 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, 2023 (Dollars in millions)		Total		Level 1		Level 2		Level 3		Netting Adjustments(1)
March 31, 2024 (Dollars in millions)
March 31, 2024 (Dollars in millions)
March 31, 2024 (Dollars in millions)
Assets:
Assets:
Assets:	Assets:
Trading assets:	Trading assets:
Trading assets:
Trading assets:
U.S. Treasury
U.S. Treasury
U.S. Treasury	U.S. Treasury	$	120	$	—	$	120	$	—	$	—
GSE	GSE	112		—		112		—		—
Agency MBS - residential		797		—		797		—		—
GSE
GSE

States and political subdivisions

States and political subdivisions

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

Corporate and other debt securities	Corporate and other debt securities	1,118		—		1,118		—		—

Corporate and other debt securities

Corporate and other debt securities
Loans
Loans
Loans	Loans	1,869		—		1,869		—		—
Other	Other	292		260		32		—		—
Other
Other
Total trading assets
Total trading assets
Total trading assets	Total trading assets	4,601		260		4,341		—		—
AFS securities:	AFS securities:
AFS securities:
AFS securities:
U.S. Treasury
U.S. Treasury
U.S. Treasury	U.S. Treasury	10,441		—		10,441		—		—
GSE	GSE	301		—		301		—		—
Agency MBS - residential		55,175		—		55,175		—		—
Agency MBS - commercial		2,398		—		2,398		—		—
GSE
GSE
Agency MBS – residential
Agency MBS – residential
Agency MBS – residential
Agency MBS – commercial
Agency MBS – commercial
Agency MBS – commercial
States and political subdivisions
States and political subdivisions
States and political subdivisions	States and political subdivisions	425		—		425		—		—
Non-agency MBS	Non-agency MBS	3,098		—		3,098		—		—
Non-agency MBS
Non-agency MBS
Other
Other
Other	Other	20		—		20		—		—
Total AFS securities	Total AFS securities	71,858		—		71,858		—		—
Total AFS securities
Total AFS securities
LHFS at fair value
LHFS at fair value
LHFS at fair value	LHFS at fair value	1,911		—		1,911		—		—
Loans and leases	Loans and leases	17		—		—		17		—
Loans and leases
Loans and leases
Loan servicing rights at fair value
Loan servicing rights at fair value
Loan servicing rights at fair value	Loan servicing rights at fair value	3,303		—		—		3,303		—
Other assets:	Other assets:
Other assets:
Other assets:
Derivative assets	Derivative assets	692		625		1,816		13		(1,762)
Derivative assets
Derivative assets
Equity securities
Equity securities
Equity securities	Equity securities	857		757		100		—		—

Total assets	Total assets	$	83,239	$	1,642	$	80,026	$	3,333	$	(1,762)

Total assets

Total assets
Liabilities:	Liabilities:
Liabilities:
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits:
Interest-bearing deposits:
Brokered time deposits
Brokered time deposits
Brokered time deposits
Short-term borrowings:
Short-term borrowings:
Short-term borrowings:
Securities sold short
Securities sold short
Securities sold short
Other liabilities:
Other liabilities:
Other liabilities:
Derivative liabilities	Derivative liabilities	$	2,589	$	394	$	3,971	$	31	$	(1,807)
Securities sold short		1,789		113		1,676		—		—
Derivative liabilities
Derivative liabilities
Total liabilities
Total liabilities
Total liabilities	Total liabilities	$	4,378	$	507	$	5,647	$	31	$	(1,807)

30 Truist Financial Corporation 33


December 31, 2022 (Dollars in millions)		Total		Level 1		Level 2		Level 3		Netting Adjustments(1)
December 31, 2023 (Dollars in millions)
December 31, 2023 (Dollars in millions)
December 31, 2023 (Dollars in millions)
Assets:
Assets:
Assets:	Assets:
Trading assets:	Trading assets:
Trading assets:
Trading assets:
U.S. Treasury
U.S. Treasury
U.S. Treasury	U.S. Treasury	$	137	$	—	$	137	$	—	$	—
GSE	GSE	457		—		457		—		—
Agency MBS - residential		804		—		804		—		—
Agency MBS - commercial		62		—		62		—		—
GSE
GSE

States and political subdivisions

States and political subdivisions

States and political subdivisions	States and political subdivisions	422		—		422		—		—

Corporate and other debt securities	Corporate and other debt securities	761		—		761		—		—

Corporate and other debt securities

Corporate and other debt securities
Loans
Loans
Loans	Loans	1,960		—		1,960		—		—
Other	Other	302		261		41		—		—
Other
Other
Total trading assets
Total trading assets
Total trading assets	Total trading assets	4,905		261		4,644		—		—
AFS securities:	AFS securities:
AFS securities:
AFS securities:
U.S. Treasury
U.S. Treasury
U.S. Treasury	U.S. Treasury	10,295		—		10,295		—		—
GSE	GSE	303		—		303		—		—
Agency MBS - residential		55,225		—		55,225		—		—
Agency MBS - commercial		2,424		—		2,424		—		—
GSE
GSE
Agency MBS – residential
Agency MBS – residential
Agency MBS – residential
Agency MBS – commercial
Agency MBS – commercial
Agency MBS – commercial
States and political subdivisions
States and political subdivisions
States and political subdivisions	States and political subdivisions	416		—		416		—		—
Non-agency MBS	Non-agency MBS	3,117		—		3,117		—		—
Non-agency MBS
Non-agency MBS
Other
Other
Other	Other	21		—		21		—		—
Total AFS securities	Total AFS securities	71,801		—		71,801		—		—
Total AFS securities
Total AFS securities
LHFS at fair value
LHFS at fair value
LHFS at fair value	LHFS at fair value	1,065		—		1,065		—		—
Loans and leases	Loans and leases	18		—		—		18		—
Loans and leases
Loans and leases
Loan servicing rights at fair value
Loan servicing rights at fair value
Loan servicing rights at fair value	Loan servicing rights at fair value	3,758		—		—		3,758		—
Other assets:	Other assets:
Other assets:
Other assets:
Derivative assets	Derivative assets	684		472		1,980		1		(1,769)
Derivative assets
Derivative assets
Equity securities
Equity securities
Equity securities	Equity securities	898		796		102		—		—

Total assets	Total assets	$	83,129	$	1,529	$	79,592	$	3,777	$	(1,769)

Total assets

Total assets
Liabilities:	Liabilities:
Liabilities:
Liabilities:

Short-term borrowings:

Short-term borrowings:

Short-term borrowings:
Securities sold short
Securities sold short
Securities sold short
Other liabilities:
Other liabilities:
Other liabilities:
Derivative liabilities	Derivative liabilities	$	2,971	$	364	$	4,348	$	37	$	(1,778)
Securities sold short		1,551		114		1,437		—		—
Derivative liabilities
Derivative liabilities
Total liabilities
Total liabilities
Total liabilities	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, ~~2023~~2024 and December 31, ~~2022,~~2023, investments totaling ~~$367~~$464 million and ~~$385~~$459 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.

The following discussion focuses on the valuation techniques and significant inputs for brokered time deposit liabilities that are measured at fair value on a recurring basis. 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, ~~2022.~~2023.

Brokered time deposits: The Company has elected to measure certain CDs that contain embedded derivatives at fair value. This fair value election better aligns the economics of the CDs with the Company’s risk management strategies. The Company elects, on an instrument by instrument basis, whether a new issuance will be measured at fair value. The Company has classified CDs measured at fair value as level 2 instruments due to the Company’s ability to observe all significant inputs to model-derived valuations in active markets. The Company employs a discounted cash flow approach based on observable market interest rates for the term of the CD and an estimate of the Bank’s credit risk. For any embedded derivative features, the Company uses the same valuation methodologies as if the derivative were a standalone derivative, as discussed in the “Derivative assets and liabilities” section in “Note 18. Fair Value Disclosures” of the Annual Report on Form 10-K for the year ended December 31, 2023.

34 Truist Financial Corporation

Activity for Level 3 assets and liabilities is summarized below:
Three Months Ended March 31, 2023 and 2022
(Dollars in millions) Loans and Leases Loan Servicing Rights Net Derivatives
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
Transfers out of level 3 and other (2) — —
Balance at March 31, 2022 $ 21 $ 3,013 $ (74)
Balance at January 1, 2023 $ 18 $ 3,758 $ (36)
Total realized and unrealized gains (losses):
Included in earnings — (5) (2)
Issuances — 48 (2)
Sales — (428) —
Settlements (1) (70) 22
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 $ — $ (54) $ (5)

~~Truist Financial Corporation 31~~




Three Months Ended March 31, 2024 and 2023 (Dollars in millions)	Loans and Leases		Loan Servicing Rights		Net Derivatives
Balance at January 1, 2023	$	18	$	3,758	$	(36)
Total realized and unrealized gains (losses):
Included in earnings	—		(5)		(2)


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


Balance at March 31, 2023	$	17	$	3,303	$	(18)
Balance at January 1, 2024	$	15	$	3,378	$	(19)
Total realized and unrealized gains (losses):
Included in earnings	—		82		(3)


Issuances	—		32		(1)
Sales	—		(1)		—
Settlements	(1)		(74)		2


Balance at March 31, 2024	$	14	$	3,417	$	(21)
Change in unrealized gains (losses) included in earnings for the period, attributable to assets and liabilities still held at March 31, 2024	$	—	$	82	$	(9)









































Primary income statement location of realized gains (losses) included in earnings	Other income		Mortgage banking income		Mortgage banking income

Fair Value Option

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


		March 31, 2023						December 31, 2022							March 31, 2024			December 31, 2023
(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	$	1,869	$	1,989	$	(120)	$	1,960	$	2,101	$	(141)
Loans and leases	Loans and leases	17		19		(2)		18		20		(2)
LHFS at fair value	LHFS at fair value	1,911		1,883		28		1,065		1,056		9
Brokered time deposits

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)

Mar 31, 2023

Dec 31, 2022

(Dollars in millions)

Carrying value:

LHFS

127

271

LHFS

Loans and leases

434

500

Loans and leases

Other

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,
(Dollars in millions) 2023 2022
Valuation adjustments:
LHFS $ — $ (3)
Loans and leases (166) (97)
Other(1)
(44) (29)

~~(1)Prior period amounts were revised.~~


	Three Months Ended March 31,
(Dollars in millions)	2024		2023
Valuation adjustments:
LHFS	$	(9)	$	—
Loans and leases	(272)		(166)
Other	(83)		(44)

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 ~~$122~~$44 million and ~~$108~~$409 million of LHFS carried at cost at March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, respectively, that did not require a valuation adjustment during the period. The remainder of LHFS is carried at fair value.

Truist Financial Corporation 35

Loans and leases 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 of Income. Refer to “Note 1. Basis of Presentation” in Truist’s Annual Report on Form 10-K for the year ended December 31, ~~2022~~2023 for additional discussion of individually evaluated loans and leases.

Other includes foreclosed real estate, other foreclosed property, ~~ROU assets,~~partnership investments, premises and equipment, OREO, and ~~OREO,~~held for sale operating leases, and consists primarily of residential homes, commercial properties, vacant lots, and automobiles. ~~ROU assets~~Partnership investments are measured based on ~~the fair value of the assets, which considers the potential for sublease income.~~discounted expected future cash flows. 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, 2023

December 31, 2022

March 31, 2024

December 31, 2023

(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:

HTM securities

Level 2

56,932

48,097

57,713

47,791

HTM securities

Loans and leases HFI, net of ALLL

Level 3

323,177

312,107

321,596

308,738

Financial liabilities:

Time deposits

Level 2

32,326

32,140

23,474

23,383

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 ~~$282~~$297 million and ~~$272~~$295 million at March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, respectively.

36 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:


		March 31, 2024
		March 31, 2024
		March 31, 2024

		March 31, 2023						December 31, 2022
		Notional Amount		Fair Value				Notional Amount			Fair Value
(Dollars in millions)	(Dollars in millions)			Assets		Liabilities				Assets			Liabilities
(Dollars in millions)
(Dollars in millions)
Cash flow hedges:	Cash flow hedges:
Cash flow hedges:
Cash flow hedges:
Interest rate contracts:
Interest rate contracts:
Interest rate contracts:	Interest rate contracts:

Swaps hedging commercial loans	Swaps hedging commercial loans	$	19,400	$	—	$	—	$	16,650		$	—		$	—

Swaps hedging commercial loans

Swaps hedging commercial loans
Fair value hedges:
Fair value hedges:
Fair value hedges:	Fair value hedges:
Interest rate contracts:	Interest rate contracts:
Interest rate contracts:
Interest rate contracts:
Swaps hedging long-term debt
Swaps hedging long-term debt
Swaps hedging long-term debt	Swaps hedging long-term debt	16,018		—		(53)		16,393			—			(68)

Swaps hedging AFS securities	Swaps hedging AFS securities	7,097		—		—		7,097			—			—

Swaps hedging AFS securities

Swaps hedging AFS securities

Total

Total

Total	Total	23,115		—		(53)		23,490			—			(68)
Not designated as hedges:	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:	Client-related and other risk management:
Interest rate contracts:	Interest rate contracts:
Interest rate contracts:
Interest rate contracts:
Swaps	Swaps	160,381		625		(2,169)		155,670			579			(2,665)

Swaps
Swaps
Options
Options
Options	Options	42,648		171		(166)		29,840			172			(192)
Forward commitments	Forward commitments	791		2		(10)		1,495			8			(2)
Forward commitments
Forward commitments
Other
Other
Other	Other	3,092		8		(7)		3,823			1			—
Equity contracts	Equity contracts	34,979		727		(1,109)		33,185			644			(901)
Equity contracts
Equity contracts
Credit contracts:
Credit contracts:
Credit contracts:	Credit contracts:
Trading assets	Trading assets	160		—		—		140			—			—
Trading assets
Trading assets
Loans and leases
Loans and leases
Loans and leases	Loans and leases	780		—		(1)		394			—			—
Risk participation agreements	Risk participation agreements	7,156		—		(3)		6,824			—			(3)
Risk participation agreements
Risk participation agreements
Total return swaps	Total return swaps	1,793		71		(6)		1,729			81			(2)

Total return swaps
Total return swaps
Foreign exchange contracts
Foreign exchange contracts
Foreign exchange contracts	Foreign exchange contracts	21,527		300		(304)		19,022			364			(380)
Commodity	Commodity	7,534		454		(450)		4,881			444			(447)

Commodity
Commodity
Total
Total
Total	Total	280,841		2,358		(4,225)		257,003			2,293			(4,592)
Mortgage banking:	Mortgage banking:
Mortgage banking:
Mortgage banking:
Interest rate contracts:
Interest rate contracts:
Interest rate contracts:	Interest rate contracts:
Swaps	Swaps	227		—		—		115			—			—

Swaps
Swaps
Options
Options
Options
Interest rate lock commitments
Interest rate lock commitments
Interest rate lock commitments	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	3,470		15		(17)		2,128			25			(6)
When issued securities, forward rate agreements and forward commitments
When issued securities, forward rate agreements and forward commitments
Other
Other
Other	Other	243		1		—		140			1			—

Total	Total	5,777		28		(29)		3,382			27			(23)

Total

Total
MSRs:
MSRs:
MSRs:	MSRs:
Interest rate contracts:	Interest rate contracts:
Interest rate contracts:
Interest rate contracts:
Swaps	Swaps	14,329		—		—		14,566			—			—

Swaps
Swaps
Options
Options
Options	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	2,184		14		(3)		2,459			11			(15)
When issued securities, forward rate agreements and forward commitments
When issued securities, forward rate agreements and forward commitments
Other
Other
Other	Other	2,268		1		(1)		1,532			—			(3)
Total	Total	33,870		68		(89)		32,487			133			(66)
Total
Total
Total derivatives not designated as hedges
Total derivatives not designated as hedges
Total derivatives not designated as hedges	Total derivatives not designated as hedges	320,488		2,454		(4,343)		292,872			2,453			(4,681)
Total derivatives	Total derivatives	$	363,003	2,454		(4,396)		$	333,012		2,453			(4,749)
Total derivatives
Total derivatives
Gross amounts in the Consolidated Balance Sheets:	Gross amounts in the Consolidated Balance Sheets:
Amounts subject to master netting arrangements				(1,251)		1,251					(1,223)			1,223
Gross amounts in the Consolidated Balance Sheets:
Gross amounts in the Consolidated Balance Sheets:
Amounts subject to master netting arrangements and exchange traded derivatives
Amounts subject to master netting arrangements and exchange traded derivatives
Amounts subject to master netting arrangements and exchange traded derivatives
Cash collateral (received) posted for amounts subject to master netting arrangements	Cash collateral (received) posted for amounts subject to master netting arrangements			(511)		556					(546)			555
Cash collateral (received) posted for amounts subject to master netting arrangements
Cash collateral (received) posted for amounts subject to master netting arrangements

Net amount

Net amount

Net amount	Net amount			$	692	$	(2,589)				$	684		$	(2,971)

34 Truist Financial Corporation 37

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, 2023 (Dollars in millions)		Gross Amount		Amount Offset		Net Amount in Consolidated Balance Sheets		Held/Pledged Financial Instruments		Net Amount
March 31, 2024 (Dollars in millions)												March 31, 2024 (Dollars in millions)	Gross Amount	Amount Offset	Net Amount in Consolidated Balance Sheets	Held/Pledged Financial Instruments	Net Amount
Derivative assets:	Derivative assets:
Derivatives subject to master netting arrangement or similar arrangement
Derivatives subject to master netting arrangement or similar arrangement
Derivatives subject to master netting arrangement or similar arrangement	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	107		—		107		—		107
Exchange traded derivatives	Exchange traded derivatives	625		(392)		233		—		233
Total derivative assets	Total derivative assets	$	2,454	$	(1,762)	$	692	$	—	$	692
Derivative liabilities:	Derivative liabilities:
Derivatives subject to master netting arrangement or similar arrangement	Derivatives subject to master netting arrangement or similar arrangement	$	(3,431)	$	1,415	$	(2,016)	$	95	$	(1,921)
Derivatives subject to master netting arrangement or similar arrangement
Derivatives subject to master netting arrangement or similar arrangement
Derivatives not subject to master netting arrangement or similar arrangement	Derivatives not subject to master netting arrangement or similar arrangement	(572)		—		(572)		—		(572)
Exchange traded derivatives	Exchange traded derivatives	(393)		392		(1)		—		(1)
Total derivative liabilities	Total derivative liabilities	$	(4,396)	$	1,807	$	(2,589)	$	95	$	(2,494)

December 31, 2022 (Dollars in millions)		Gross Amount		Amount Offset		Net Amount in Consolidated Balance Sheets		Held/Pledged Financial Instruments		Net Amount
December 31, 2023 (Dollars in millions)
December 31, 2023 (Dollars in millions)
December 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:
Derivatives subject to master netting arrangement or similar arrangement
Derivatives subject to master netting arrangement or similar arrangement
Derivatives subject to master netting arrangement or similar arrangement	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	86		—		86		—		86
Exchange traded derivatives	Exchange traded derivatives	472		(361)		111		—		111
Total derivative assets	Total derivative assets	$	2,453	$	(1,769)	$	684	$	—	$	684
Derivative liabilities:	Derivative liabilities:
Derivatives subject to master netting arrangement or similar arrangement
Derivatives subject to master netting arrangement or similar arrangement
Derivatives subject to master netting arrangement or similar arrangement	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	(697)		—		(697)		—		(697)
Exchange traded derivatives	Exchange traded derivatives	(364)		361		(3)		—		(3)
Total derivative liabilities	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, 2023							December 31, 2022
						Hedge Basis Adjustment						Hedge Basis Adjustment
		March 31, 2024																		March 31, 2024				December 31, 2023
					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)		$	38,761		$	(534)	$	(4)	$	38,773	$	(630)	$	(4)
Loans and leases	Loans and leases		350			—		9		353		—		10

Long-term debt	Long-term debt		27,385			(303)		(134)		25,378		(780)		218
Long-term debt
Long-term debt

(1)The amortized cost of AFS securities was ~~$45.5~~$58.7 billion at March 31, ~~2023~~2024 and ~~$46.2~~$62.2 billion at December 31, ~~2022.~~2023. Further, as of March 31, 2024, closed portfolios of securities hedged under the portfolio layer method have an amortized cost of $57.6 billion, of which $25.0 billion was designated as hedged. The remaining amount of amortized cost is from securities with terminated hedges where the basis adjustment is being amortized into earnings using the effective interest method over the contractual life of the security.

38 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:

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:

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

Long-term debt

—

(6)

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

Commercial Loans

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

Three Months Ended March 31,

(Dollars in millions)

2023

2022

Investment securities:

Amounts related to interest settlements

(5)

Recognized on derivatives

(95)

414

Recognized on derivatives

Recognized on hedged items

106

(402)

Net income (expense) recognized(1)

Loans and leases:

Recognized on hedged items

(1)

Net income (expense) recognized

(1)

Recognized on hedged items

Long-term debt:

Amounts related to interest settlements

(46)

Amounts related to interest settlements

Recognized on derivatives

156

(429)

Recognized on hedged items

(142)

486

Recognized on hedged items

Net income (expense) recognized

(32)

Net income (expense) recognized, total

(1)Includes ~~$10 million and $8~~$9 million of income recognized for the three months ended March 31, ~~2023~~2024, respectively, and ~~2022,~~$10 million for the three months ended March 31, 2023, 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 39

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

(Dollars in millions)

Mar 31, 2023

Dec 31, 2022

(Dollars in millions)

Cash flow hedges:

Net unrecognized after-tax gain (loss) on active hedges recorded in AOCI

(118)

Net unrecognized after-tax gain (loss) on active hedges recorded in AOCI

Net unrecognized after-tax gain (loss) on terminated hedges recorded in AOCI (to be recognized in earnings through 2029)

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)

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

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

Fair value hedges:

Unrecognized pre-tax net gain (loss) on terminated hedges (to be recognized as interest primarily through 2033)(1)

308

669

Fair value hedges:

Unrecognized pre-tax net gain (loss) on terminated hedges(1)

Portion of pre-tax net gain (loss) on terminated hedges to be recognized as a change in interest during the next 12 months

163

(1)Includes deferred gains that are recorded in AOCI as a result of the reclassification to HTM of previously hedged securities of ~~$447~~$404 million at March 31, ~~2023~~2024 and ~~$457~~$413 million at December 31, ~~2022.~~2023.

Derivatives Not Designated as Hedging Instruments under GAAP

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

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

Three Months Ended March 31,

(Dollars in millions)

Income Statement Location

2023

2022

Client-related and other risk management:

Interest rate contracts

Investment banking and trading income and other income

Foreign exchange contracts

Investment banking and trading income and other income

(3)

Foreign exchange contracts

Equity contracts

Investment banking and trading income and other income

Credit contracts

Investment banking and trading income and other income

(33)

Credit contracts

Commodity contracts

Investment banking and trading income

Mortgage banking:

Interest rate contracts - residential

Mortgage banking income

(1)

261

Interest rate contracts - commercial

Mortgage banking income

(1)

Mortgage banking:

Interest rate contracts – residential

Interest rate contracts – commercial

MSRs:

Interest rate contracts - residential

Mortgage banking income

(349)

Interest rate contracts - commercial

Mortgage banking income

(9)

MSRs:

Interest rate contracts – residential

Interest rate contracts – commercial

Total

40 Truist Financial Corporation

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, ~~2023,~~2024, the remaining terms on these risk participations ranged from less than one year to 1513 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, 2023

Dec 31, 2022

(Dollars in millions)

Mar 31, 2024

Dec 31, 2023

Risk participation agreements:

Maximum potential amount of exposure

618

575

Maximum potential amount of exposure

Total return swaps:

Cash collateral held

473

453

Cash and other collateral received

The following table summarizes collateral positions with counterparties:

(Dollars in millions)

Mar 31, 2023

Dec 31, 2022

(Dollars in millions)

Mar 31, 2024

Dec 31, 2023

Dealer and other counterparties:

Cash and other collateral received from counterparties

511

542

Derivatives in a net gain position secured by collateral received

586

618

Unsecured positions in a net gain with counterparties after collateral postings

Cash collateral posted to counterparties

636

590

Derivatives in a net loss position secured by collateral

809

692

Central counterparties clearing:

Cash collateral, including initial margin, received from central clearing parties

—

Central counterparties clearing:

Cash collateral, including initial margin, posted to central clearing parties

Derivatives in a net loss position

Derivatives in a net gain position

Securities pledged to central counterparties clearing

933

639

Truist Financial Corporation 41

NOTE 17. Computation of EPS

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

Three Months Ended March 31,

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

2023

2022

Net income available to common shareholders from continuing operations

Net income available to common shareholders from discontinued operations

Net income available to common shareholders

1,410

1,327

Weighted average number of common shares

1,328,602

1,329,037

Weighted average number of common shares

Effect of dilutive outstanding equity-based awards

10,878

12,526

Weighted average number of diluted common shares

1,339,480

1,341,563

Weighted average number of diluted common shares

Basic earnings from continuing operations

Basic earnings from discontinued operations

Basic EPS

1.06

1.00

Basic EPS

Diluted earnings from continuing operations

Diluted earnings from discontinued operations

Diluted EPS

1.05

0.99

Anti-dilutive awards

621

—

Anti-dilutive awards

NOTE 18. Operating Segments

Following the segment realignment, Truist operates and measures business activity across ~~three~~two segments: ~~CB&W, C&CB,~~CSBB and ~~IH,~~WB, 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, 2022.~~

~~During~~On February 20, 2024, the ~~first quarter~~Company entered into an agreement to sell the remaining stake of ~~2023, Truist reorganized Prime Rate Premium Finance Corporation,~~the common equity in TIH to an investor group, representing substantially all of the Company’s IH segment, which ~~includes AFCO Credit Corporation~~represented a material strategic shift for the Company, and ~~CAFO Holding~~as a result, the Company ~~into~~recast results for all periods presented under the ~~C&CB segment from~~discontinued operations basis of presentation. On May 6, 2024, the Company completed the sale of its remaining equity interests in TIH. TIH was the principal legal entity of the IH segment. ~~Prior period results have been revised~~As the operations of TIH are now included in discontinued operations, the Company no longer presents the IH segment as one of its reportable segments. Refer to ~~conform~~“Note 2. Discontinued Operations” for additional information related to discontinued operations.

Consumer and Small Business Banking

CSBB serves consumer and small businesses clients, providing deposits and payment services, credit cards, loans, mortgages, brokerage, and investment advisory services and insurance solutions through an extensive network of branches, ATMs, digital channels, contact centers, and other channels. Lending solutions include personal and unsecured loans originated through the ~~current presentation.~~branch network and digital channels; indirect lending services providing a comprehensive set of technology-enabled consumer lending solutions including point-of-sale offerings for autos, recreational vehicles, outdoor power sports, equipment, and home improvement; and real estate lending providing residential mortgages through its retail, direct, and correspondent channels, with the loans either sold in the secondary market, typically with servicing rights retained or held in the Company’s loan portfolio, and home equity loans delivered through the branch network. CSBB also serves as an entry point for clients to access services from other businesses.

Wholesale Banking

WB delivers a comprehensive suite of solutions to our commercial, corporate, institutional, real estate, and wealth clients bringing together a combination of both local and specialized industry expertise. This segment is focused on providing core banking, specialized lending, investment banking, capital markets, strategic advisory, market-making, asset management, trust, brokerage, and investment related services, as well as cash management and payment processing. Truist’s investment banking and corporate banking teams serve clients across the nation, while offering a unique, high-touch advisory approach through our industry experts. Truist’s wealth professionals provide investment advisory services, institutional investment management, full-service and online/discount brokerage products, family office services, as well as other wealth management disciplines.

3842 Truist Financial Corporation

Other, Treasury & Corporate

OT&C includes management of the Company’s investment securities portfolio, long-term debt, derivative instruments used for balance sheet hedging, short-term liquidity and funding activities, balance sheet risk management and most real estate assets, as well as the Company’s functional activities such as finance, enterprise risk, legal, and enterprise technology and management, among others. Additionally, OT&C houses intercompany eliminations, including intersegment net referral fees and residual interest rate risk after segment allocations have taken place.

Truist promotes revenue growth through the Company’s Integrated Relationship Management approach, which is designed to deepen client relationships and bring the full breadth and depth of Truist’s products and services to meet clients’ financial needs. The objective is to provide Truist’s entire suite of products to its clients with the end goal of providing clients the best financial experience in the marketplace. Revenues of certain products and services are reflected in the results of the segment providing those products and services and are also allocated to CSBB and WB. These allocated revenues between segments are reflected as net referral fees in noninterest income and eliminated in OT&C.

The segment results are presented based on internal management methodologies that were designed to support these strategic objectives. Unlike financial accounting, there is no comprehensive authoritative body of guidance for management accounting equivalent to GAAP. The performance of the segments is not comparable with Truist’s consolidated results or with similar information presented by any other financial institution. Additionally, because of the interrelationships between the various segments, the information presented is not indicative of how the segments would perform if they operated as independent entities.

Because business segment results are presented based on management accounting practices, the transition to the consolidated results prepared under U.S. GAAP creates certain differences, which are reflected as residuals in OT&C. Business segment reporting conventions include, but are not limited to, the items as detailed below.

Segment net interest income reflects matched maturity funds transfer pricing, which ascribes credits or charges based on the economic value or cost created by assets and liabilities of each segment. Residual differences between these credits and charges are captured in OT&C.

Noninterest income includes inter-segment referral fees, as well as federal and state tax credits that are grossed up on a pre-tax equivalent basis, related primarily to certain community development investments. Recoveries for these allocations are reported in OT&C.

Corporate expense allocations, including overhead or functional expenses that are not directly charged to the segments, are allocated to segments based on various drivers (number of FTEs, number of accounts, loan balances, net revenue, etc.). Recoveries for these allocations are reported in OT&C.

Provision for credit losses represents net charge-offs by segment combined with an allocation to the segments for the provision attributable to each segment’s quarterly change in the ALLL. Provision for income taxes is calculated using a blended income tax rate for each segment and includes reversals of the noninterest income tax adjustments described above. The difference between the calculated provision for income taxes at the segment level and the consolidated provision for income taxes is reported in OT&C.

The application and development of management reporting methodologies is an active process and undergoes periodic enhancements. The implementation of these enhancements to the internal management reporting methodology may materially affect the results disclosed for each segment, with no impact on consolidated results. When significant changes to management reporting methodologies take place, the impact of these changes is quantified and prior period information is revised as practicable.

Truist Financial Corporation 43

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

2024
2024
Net interest income (expense)
Net interest income (expense)
Net interest income (expense)	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)	1,139		656		(556)		171		13		2		(596)		(829)		—		—
Net intersegment interest income (expense)
Net intersegment interest income (expense)
Segment net interest income
Segment net interest income
Segment net interest income	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	274		74		232		(150)		—		—		(4)		(19)		502		(95)
Allocated provision for credit losses
Allocated provision for credit losses
Segment net interest income after provision
Segment net interest income after provision
Segment net interest income after provision	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	873		910		630		656		817		733		(86)		(157)		2,234		2,142
Noninterest income
Noninterest income
Amortization of intangibles
Amortization of intangibles
Amortization of intangibles	Amortization of intangibles	69		73		31		33		36		30		—		1		136		137
Other noninterest expense	Other noninterest expense	1,900		1,812		812		755		648		516		195		454		3,555		3,537
Income (loss) before income taxes		1,370		1,135		1,307		1,307		147		190		(915)		(886)		1,909		1,746
Other noninterest expense
Other noninterest expense
Income (loss) before income taxes from continuing operations
Income (loss) before income taxes from continuing operations
Income (loss) before income taxes from continuing operations
Provision (benefit) for income taxes	Provision (benefit) for income taxes	326		274		273		284		36		47		(241)		(275)		394		330
Segment net income (loss)		$	1,044	$	861	$	1,034	$	1,023	$	111	$	143	$	(674)	$	(611)	$	1,515	$	1,416
Provision (benefit) for income taxes
Provision (benefit) for income taxes
Segment net income (loss) from continuing operations
Segment net income (loss) from continuing operations
Segment net income (loss) from continuing operations

Identifiable assets (period end)		$	168,701	$	159,939	$	213,143	$	188,806	$	7,263	$	6,494	$	185,247	$	188,740	$	574,354	$	543,979
Identifiable assets (period end) of continuing operations

Identifiable assets (period end) of continuing operations

Identifiable assets (period end) of continuing operations

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

44 Truist Financial Corporation

NOTE 19. Subsequent Events

On May 6, 2024, the Company completed the sale of its remaining equity interests in TIH. The sale resulted in cash proceeds to Truist of approximately $10.1 billion after-tax, reflecting certain closing adjustments for cash, debt and debt-like items, including the settlement of certain previously granted TIH equity awards, working capital, transaction expenses and an investor return amount associated with the originally sold 20% stake. The transaction improves Truist’s relative capital position and allows Truist to maintain strategic flexibility. Upon closing, the transaction resulted in a full deconsolidation of the TIH subsidiary from Truist and resulted in an approximate after-tax gain of approximately $4.7 billion. Additionally, following the sale, Truist will retain the related postretirement benefit obligation for TIH employees, and will remeasure the postretirement benefit obligation of the plan in the second quarter of 2024. Refer to “Note 2. Discontinued Operations” for additional information related to discontinued operations.

Following the completion of the sale of TIH, Truist executed a strategic balance sheet repositioning of a portion of its AFS investment securities portfolio by selling $27.7 billion of lower-yielding investment securities, resulting in an after-tax loss of $5.1 billion in the second quarter of 2024. The investment securities that were sold had a book value of $34.4 billion and a weighted average book yield of 2.80% for the remainder of 2024 including the impact of hedges and based on the Federal Funds futures curve. Including the tax benefit, the repositioning generated $29.3 billion available for reinvestment.

Truist invested approximately $18.7 billion of the $39.4 billion available in shorter duration investment securities yielding 5.27%. The remaining $20.7 billion will be held in cash. The blended reinvestment rate on the new investment securities purchased and cash is 5.22% for the remainder of 2024 including the impact of hedges and based on the Federal Funds futures curve.

Truist Financial Corporation 3945

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, ~~2022.~~2023.

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.~~2023.

Regulatory and Supervisory Considerations

We are subject to significant regulatory frameworks that affect the products and services that we may offer and the manner in which we may offer them, the risks that we may take, the ways in which we may operate, and the corporate and financial actions that we may take. We are also subject to direct supervision and periodic examinations by various governmental agencies and self-regulatory organizations that are charged with overseeing the kinds of business activities in which we engage. The regulatory and supervisory framework applicable to banking organizations is intended primarily for the protection of depositors and other customers, the DIF, the broader economy, and the stability of the U.S. financial system, rather than for the protection of shareholders and non-deposit creditors. ~~Truist is subject~~In addition to banking laws and regulations, ~~and~~Truist is subject to various other laws and regulations, all of which directly or indirectly 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 certain updates to significant federal and state laws to which Truist is subject since the filing of the Annual Report on Form 10-K for the year ended December 31, ~~2022 to state and federal laws to which Truist is subject.~~2023. 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~~statutes or regulatory provisions. Refer to “Regulatory and Supervisory Considerations” in Truist’s Annual Report on Form 10-K for the year ended December 31, ~~2022~~2023 for additional disclosures.

In ~~March~~November 2023, the ~~FRB created~~FDIC issued a final rule to implement a special assessment to recoup losses to the ~~Bank Term Funding Program~~DIF associated with bank failures in the first half of 2023. Under the rule, the assessment base for the special assessment is equal to ~~support American businesses~~an insured depository institution’s estimated uninsured deposits reported as of December 31, 2022, adjusted to exclude the first $5 billion of uninsured deposits. The special assessment for Truist is $582 million, with $507 million recognized in the fourth quarter of 2023 and ~~households by making~~an additional ~~funding available~~$75 million recognized in the first quarter of 2024 due to ~~eligible depository institutions. This program offers loans up~~an increase in the estimated relevant losses to ~~one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging any collateral eligible for purchase~~the DIF reported by the ~~FRB~~FDIC in ~~open market operations, such as U.S. Treasuries, U.S. agency securities,~~February 2024. The ultimate amount of expenses associated with the special assessment will also be impacted by the finalization of the losses incurred by the FDIC in the resolutions of Silicon Valley Bank and ~~U.S. agency mortgage-backed securities. These assets will be valued at par.~~Signature Bank, which could result in additional expense.

In March 2024, the ~~aftermath~~FDIC released proposed revisions to its statement of policy on bank merger transactions. The proposal reflects regulatory, legislative, and industry changes since the statement of policy was last published for comment and amended, makes the statement more principles-based, communicates the FDIC Board’s expectations regarding the evaluation of merger applications filed under the Bank Merger Act, and describes the types of merger applications for which the FDIC is the responsible agency. We continue to evaluate the proposal and the potential impacts, if adopted as proposed, on the Company and Truist Bank.

The FRB’s capital plan rule provides that a BHC must update and resubmit its capital plan if the BHC determines there has been or will be a material change in its risk profile, financial condition, or corporate structure since it last submitted the capital plan. Truist determined that the sale of our remaining equity interests in TIH constitutes such a material change and, therefore, addressed the material change in our capital plan submitted in April 2024. The capital plan rule further provides that, upon the occurrence of an event requiring resubmission, a BHC may not make any capital distribution unless it has received prior approval of the ~~recent bank failures, we expect that the banking agencies will propose certain actions, including reforms that may impose different~~FRB. Accordingly, Truist’s capital ~~and liquidity requirements, including increased requirements to issue long term debt. In addition, there may be special assessments to repay losses~~distributions are now subject to the ~~FDIC’s Deposit Insurance Fund. It is not yet possible to quantify~~prior approval of the ~~impact~~FRB, pending the FRB's consideration of ~~these potential actions.~~our capital plan and stress capital buffer requirement. Truist’s Board of Directors declared common and preferred stock dividends payable in June 2024, which have been approved by the FRB.

Executive Overview

~~In a challenging~~We are pleased with the progress 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 monitoringmomentum 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 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 source of strength and stability for our clients and communities.

Truist made 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 have taken to fulfill our purpose to inspire and build better lives and communities, followed by a discussion of our financial results for the first quarter of 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~~business in the first quarter of ~~2023~~2024. Our expense discipline was evident and reflects important decisions we made last year. Investments we have made in our investment banking business resulted in strong performance in improving markets. Loan demand was muted and deposit costs continue to be under pressure.

•~~Opened T3 Accelerator Lab in the Innovation & Technology Center where we’re redefining the client~~Asset quality metrics are normalizing but remain manageable as our nonperforming loans remained relatively stable on a linked-quarter basis and ~~teammate experience, putting feedback and ideas to the test in real-world scenarios before rolling out to clients~~loan losses were within our expectations.

4046 Truist Financial Corporation

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

•~~Published 2022 Corporate Responsibility Report, TCFD Report,~~Effective January 1, 2024, several business activities were realigned reflecting updates to the Company’s operating structure. First, the CB&W segment was renamed CSBB and ~~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~~the C&CB segment was renamed WB. Second, the Wealth business was realigned into the WB segment from the CSBB segment, representing a ~~35% reduction~~separate reporting unit in ~~both Scope 1 and Scope 2 emissions by 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~~that segment. Third, the small business ~~credit cards to a new processing platform~~banking client segmentation was realigned into the CSBB segment from the WB segment.

•~~Announced a new goal to increase female and ethnically diverse representation~~Following the departure of our CIO in ~~leadership roles by 15% and 20%, respectively, by 2025~~

•~~Committed $282 million from Truist Community Capital to support affordable housing and job creation in underserved communities and $22 million through Truist Foundation~~April 2024, we have appointed an interim CIO while our search for a ~~multiyear program~~permanent CIO continues. Our Interim CIO has 20 years of banking experience across risk management, commercial, consumer, operations, technology, and vertically integrated businesses. He oversees the provision of comprehensive technology, data, security, and information related platforms.

On May 6, 2024, we completed the sale of TIH previously announced on February 20, which strengthened our relative capital position, facilitated a balance sheet repositioning, and will allow Truist to ~~strengthen small businesses~~provide even greater support to our core banking clients and ~~create career pathways~~evaluate a return of capital to shareholders via share buybacks later in 2024 depending upon market conditions and other factors. Financial information attributed to TIH has been reflected in discontinued operations for ~~ethnically diverse individuals~~the periods presented within and, ~~entrepreneurs~~unless otherwise stated, the following discussion excludes amounts reported as discontinued operations. Refer to “Note 2. Discontinued Operations” for additional information.

•Our strengthening capital position allows us to better weather any economic environment, and importantly, will enable us to be in a more offensive position with our core banking franchise. We are ~~also~~optimistic about our future as we operate Truist from this increased position of financial strength in some of the best markets in the process of realigning our LightStream platforms with our broader consumer business, with the goal of bringing the innovation, digital capabilities, efficiencies, and certain cloud-based infrastructure of LightStream to the broader Truist client basecountry.

Financial Results

Net income available to common shareholders for the first quarter of ~~2023~~2024 of ~~$1.4~~$1.1 billion was ~~up 6.3%~~down 23% compared with the first quarter of ~~2022.~~2023. On a diluted per common share basis, earnings for the first quarter of ~~2023~~2024 were ~~$1.05, an increase~~$0.81, a decrease of ~~$0.06,~~$0.24, or ~~6.1%~~23%, compared to the first quarter of ~~2022.~~2023. Truist’s results of operations for the first quarter of ~~2023~~2024 produced an annualized return on average assets of ~~1.10%~~0.91% and an annualized return on average common shareholders’ equity of ~~10.3%~~8.4% compared to prior year returns of ~~1.07%~~1.10% and ~~9.0%~~10.3%, respectively.

Net income from continuing operations was $1.1 billion for the first quarter of 2024, compared to $1.4 billion for the first quarter of 2023.

•Results from continuing operations for the first quarter of ~~2023~~2024 included ~~merger-related and~~ restructuring charges of ~~$63~~$51 million ($4839 million after-tax, or $0.03 per share) and the FDIC special assessment of $75 million ($57 million after-tax, or $0.04 per share).

•Results from continuing operations for the first quarter of ~~2022~~2023 included ~~$216~~restructuring charges of $56 million ($~~166~~43 million after-tax, or ~~$0.12~~$0.03 per share).

Net income from discontinued operations was $67 million for the first quarter of ~~merger-related~~2024, compared to $105 million for the first quarter of 2023.

•Results from discontinued operations for the first quarter of 2024 included the accelerated recognition of TIH equity compensation expense for certain event-driven awards of $89 million ($68 million after tax, or $0.05 per share), and restructuring charges ~~$202~~of $19 million ($~~155~~14 million after-tax, or $0.12 per share) of incremental operating expenses related to the Merger, a gain on the redemption of noncontrolling equity interest of $74 million ($57 million 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, or $0.04$0.01 per share).

Taxable-equivalent net interest income for the first quarter of ~~2023~~2024 was ~~up $710~~down $493 million, or ~~22%~~13%, compared to the first quarter of ~~2022~~2023 primarily due to higher ~~short-term interest rates~~funding costs and ~~strong loan growth, alongside well controlled deposit costs. These increases were partially offset by~~ lower ~~purchase accounting accretion and PPP revenue.~~earning assets. Net interest margin was ~~3.17%~~2.89%, ~~up 41~~down 28 basis points.

•The yield on the average total loan portfolio was ~~5.81%~~6.38%, up ~~212~~57 basis points, primarily reflecting higher market interest ~~rates, partially offset by lower purchase accounting accretion and PPP revenue.~~rates. The yield on the average securities portfolio was ~~2.14%~~2.46%, up ~~46 basis points primarily due to the higher rate environment. The average cost of total deposits was 1.12%, up 109~~32 basis points.

•The average cost of total deposits was 2.03%, up 91 basis points. The average cost of short-term borrowings was ~~4.69%~~5.62%, up ~~409~~93 basis points. The average cost of long-term debt was ~~4.05%~~4.74%, up ~~255~~69 basis points. The increase in rates on deposits and other funding sources was largely attributable to the higher rate environment.

Noninterest income was up ~~$92~~$25 million, or ~~4.3%~~1.8%, compared to the first quarter of ~~2022~~2023 due to ~~12% growth in insurance~~higher investment banking and trading income and higher ~~mortgage banking~~other 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 included $69 million of securities losses~~mortgage banking income and ~~a $74 million gain~~service charges on ~~the redemption of noncontrolling equity interest (included in other income).~~deposits.

Noninterest expense was ~~up $17~~down $62 million, or ~~0.5%~~2.1%, compared to the first quarter of ~~2022~~2023 due to ~~higher personnel expense,~~lower other expense and ~~regulatory costs. These increases were~~personnel expense, partially offset by ~~lower merger-related and restructuring charges and professional fees and outside processing expenses. Merger-related and restructuring charges and incremental operating expenses related to~~ the ~~merger decreased $153 million and $202 million, respectively, due to the completion~~FDIC special assessment (regulatory costs) of ~~integration-related activities.~~$75 million. Adjusted noninterest expenses, which exclude ~~merger-related costs~~the FDIC special assessment, restructuring charges, and the amortization of intangibles, ~~increased $373~~decreased $120 million, or ~~12%.~~4.2%, compared to the earlier quarter.

~~The provision for income taxes was $394 million for the 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%,~~2024 decreased compared to ~~18.9% for~~ the ~~earlier quarter.~~first quarter of 2023 primarily due to a decrease in the full year forecasted pre-tax earnings.

~~Asset quality remains excellent, reflecting Truist’s prudent risk culture and diverse portfolio.~~

Truist Financial Corporation 47

An increase in the loan loss reserve reflects normalization of asset quality.

•Nonperforming loans and leases held for investment were ~~0.36%~~0.45% of loans and leases held for investment at March 31, ~~2023, flat~~2024, up one basis point compared to December 31, ~~2022.~~

2023.

~~Truist Financial Corporation 41~~

•The allowance for credit losses was ~~$4.8~~$5.1 billion and includes ~~$4.5~~$4.8 billion for the allowance for loan and lease losses and ~~$282~~$297 million for the reserve for unfunded commitments. The ALLL ratio was ~~1.37%~~1.56%, up ~~three~~two basis points compared with December 31, ~~2022 primarily due to increased economic uncertainty.~~2023.

•The provision for credit losses was ~~$502~~$500 million compared to ~~a benefit of $95~~$502 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.2023.

•The net charge-off ratio was 3764 basis points, up 1227 basis points compared to the first quarter of ~~2022 driven by~~2023 due to higher net charge-offs in the CRE, other consumer, credit card, and indirect auto ~~and other consumer portfolios due to normalizing trends, as well as an increase in the commercial and industrial portfolio.~~portfolios.

Capital ~~and liquidity~~ remained strong ~~compared to~~during the ~~regulatory requirements for well capitalized banks.~~first quarter of 2024.

•~~Truist~~Truist’s CET1 ratio was ~~9.1%~~10.1% as of March 31, ~~2023. The increase since~~2024, flat compared to December 31, ~~2022 represents~~2023 as organic capital generation and RWA optimization were partially offset by the CECL phase-in.

•~~Truist closed the sale of the minority stake in TIH on April 3, 2023, which adds 30 basis points to the risk-based regulatory capital ratios.~~

•Truist declared common dividends of $0.52 per share during the first quarter of ~~2023.~~2024. The dividend payout ratio for the first quarter of ~~2023~~2024 was ~~49%~~64%. Truist did not repurchase any shares in the first quarter of ~~2023.~~2024.

•Truist’s average consolidated LCR was ~~113%~~115% for the three months ended March 31, ~~2023,~~2024, compared to the regulatory minimum of 100%.

•

On May 6, 2024, the Company completed the sale of its remaining equity interests in TIH. The sale resulted in after-tax cash proceeds to Truist ~~has significant~~of approximately $10.1 billion, reflecting certain closing adjustments for cash, debt and ~~strong access~~debt-like items, including the settlement of certain previously granted TIH equity awards, working capital, transaction expenses and an investor return amount associated with the originally sold 20% stake. The transaction improves Truist’s relative capital position and allows Truist to ~~liquidity with $166~~maintain strategic flexibility. Upon closing, the transaction resulted in a full deconsolidation of the TIH subsidiary from Truist and resulted in an approximate after-tax gain of approximately $4.7 billion. Additionally, following the sale, Truist will retain the related postretirement benefit obligation for TIH employees, and will remeasure the postretirement benefit obligation of the plan in the second quarter of 2024. Refer to “Note 2. Discontinued Operations” for additional information related to discontinued operations.

•Truist ~~increased its~~invested approximately $18.7 billion of the $39.4 billion available in shorter duration investment securities yielding 5.27%. The remaining $20.7 billion will be held in cash. The blended reinvestment rate on the new investment securities purchased and cash ~~position in response to market events.~~

•~~AOCI improved by $1.0 billion, or 7.5%, since December 31, 2022.~~is 5.22% for the remainder of 2024 including the impact of hedges and based on the Federal Funds futures curve.

Analysis of Results of Operations

Net Interest Income and NIM

•Average earning assets ~~increased $29.2~~decreased $22.6 billion, or ~~6.2%~~4.5%, primarily due to ~~growth~~declines in average total loans of ~~$35.1~~$18.1 billion, or ~~12%~~5.5%, and a decrease in average securities of $9.3 billion, or 6.6%, partially offset by growth in other earning assets of ~~$6.7~~$5.4 billion, or ~~35%~~21%, primarily due to an increase in balances held at the Federal Reserve to support ~~liquidity build, partially offset by a decrease in average securities of $12.1 billion, or 7.9%.~~liquidity.

•The yield on the average total loan portfolio was ~~5.81%~~6.38%, up ~~212~~57 basis points, primarily reflecting higher market interest ~~rates, partially offset by lower purchase accounting accretion and PPP revenue.~~rates. The yield on the average securities portfolio was ~~2.14%~~2.46%, up 4632 basis ~~points primarily due to the higher rate environment.~~points.

•Average deposits decreased ~~$6.8~~$19.4 billion, or ~~1.6%~~4.7%, average short-term borrowings increased ~~$17.1~~$2.2 billion, or 9.0%, and average long-term debt ~~increased $15.7~~decreased $10.3 billion, or ~~44.5%~~20%.

•The average cost of total deposits was ~~1.12%~~2.03%, up ~~109~~91 basis points. The average cost of short-term borrowings was ~~4.69%~~5.62%, up ~~409~~93 basis points. The average cost of long-term debt was ~~4.05%~~4.74%, up ~~255~~69 basis points. The increase in rates on deposits and other funding sources was largely attributable to the 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 and long-term debt were $741 million and $81 million, respectively.

The remaining unamortized purchase accounting fair value mark on loans and leases consists of $447 million for consumer loans and leases, and $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.

4248 Truist Financial Corporation


Table 1: Taxable-Equivalent Net Interest Income and Rate / Volume Analysis	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(1)				Annualized Yield/Rate(2)				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
		2023		2022		2023		2022		2023		2022				Rate			Volume	2024							2023				2024			2023				2024				2023				Rate	Volume
Assets	Assets																							Assets
AFS and HTM securities at amortized cost:	AFS and HTM securities at amortized cost:																					AFS and HTM securities at amortized cost:
U.S. Treasury	U.S. Treasury	$	11,117	$	9,890	1.07	%	0.72	%	$	30	$	18	$	12		$	10		$	2
GSE	GSE	335		1,120		2.86		2.13		2		6		(4)			2			(6)
Agency MBS	Agency MBS	124,746		137,052		2.23		1.72		694		590		104			160			(56)
States and political subdivisions	States and political subdivisions	425		374		4.07		3.72		4		3		1			—			1
Non-agency MBS	Non-agency MBS	3,907		4,224		2.34		2.25		23		24		(1)			1			(2)
Other	Other	21		27		5.30		2.04		—		—		—			—			—

Total securities	Total securities	140,551		152,687		2.14		1.68		753		641		112			173			(61)
Total securities
Total securities
Interest earning trading assets	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)	25,589		18,932		4.67		0.63		295		30		265			251			14
Loans and leases, net of unearned income:	Loans and leases, net of unearned income:

Commercial and industrial	Commercial and industrial	165,095		138,872		5.98		2.88		2,436		987		1,449			1,233			216

Commercial and industrial

Commercial and industrial
CRE	CRE	22,689		23,555		6.32		2.84		355		168		187			193			(6)
Commercial Construction	Commercial Construction	5,863		5,046		7.14		3.05		101		35		66			59			7

Residential mortgage

Residential mortgage

Residential mortgage	Residential mortgage	56,422		47,976		3.73		3.57		526		428		98			20			78
Home equity	Home equity	10,735		10,822		6.80		4.33		180		116		64			65			(1)
Indirect auto	Indirect auto	27,743		26,088		5.82		5.56		398		357		41			17			24
Other consumer	Other consumer	27,559		24,921		6.76		6.24		459		383		76			33			43
Student	Student	5,129		6,648		7.04		3.86		89		63		26			43			(17)
Credit card	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	326,020		288,610		5.81		3.70		4,680		2,641		2,039			1,693			346
Total loans and leases HFI
Total loans and leases HFI
LHFS	LHFS	1,527		3,874		6.71		2.87		25		28		(3)			21			(24)
Total loans and leases	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	499,149		469,940		4.72		2.90		5,836		3,383		2,453			2,181			272
Nonearning assets	Nonearning assets	60,478		66,041
Assets of discontinued operations
Assets of discontinued operations
Assets of discontinued operations
Total assets
Total assets
Total assets	Total assets	$	559,627	$	535,981
Liabilities and Shareholders’ Equity	Liabilities and Shareholders’ Equity
Liabilities and Shareholders’ Equity
Liabilities and Shareholders’ Equity
Interest-bearing deposits:	Interest-bearing deposits:
Interest-bearing deposits:
Interest-bearing deposits:
Interest-checking
Interest-checking
Interest-checking	Interest-checking	$	108,886	$	112,159	1.60		0.05		430		14		416			416			—
Money market and savings	Money market and savings	139,802		141,500		1.38		0.03		476		11		465			465			—
Time deposits	Time deposits	28,671		15,646		3.10		0.18		219		7		212			202			10

Total interest-bearing deposits
Total interest-bearing deposits
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	24,056		6,944		4.69		0.60		278		10		268			197			71
Long-term debt	Long-term debt	51,057		35,337		4.05		1.50		514		132		382			303			79
Total interest-bearing liabilities	Total interest-bearing liabilities	352,472		311,586		2.20		0.22		1,917		174		1,743			1,583			160
Noninterest-bearing deposits	Noninterest-bearing deposits	131,099		145,933																		Noninterest-bearing deposits	108,888			131,099				131,099
Other liabilities	Other liabilities	13,979		11,664																		Other liabilities	12,885			11,225				11,225
Liabilities of discontinued operations
Shareholders’ equity
Shareholders’ equity
Shareholders’ equity	Shareholders’ equity	62,077		66,798																		59,011			62,077			62,077
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	559,627	$	535,981																	Total liabilities and shareholders’ equity	$	531,002		$			$	559,627
Average interest-rate spread	Average interest-rate spread					2.52	%	2.68	%													Average interest-rate spread										2.00	%		2.53	%
NIM/net interest income - taxable equivalent	NIM/net interest income - taxable equivalent					3.17	%	2.76	%	$	3,919	$	3,209	$	710		$	598		$	112
Taxable-equivalent adjustment	Taxable-equivalent adjustment									$	51	$	26									Taxable-equivalent adjustment																	$	53	$		$	51
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.

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

Truist Financial Corporation 4349

Provision for Credit Losses

The provision for credit losses was ~~$502~~$500 million compared to ~~a benefit of $95~~$502 million for the first quarter of ~~2022.~~ 2023.

•The ~~net charge-off ratio~~current quarter provision expense was ~~37 basis points, up 12 basis points~~relatively flat compared to 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.2023.

•The net charge-off ratio was up compared to the first quarter of ~~2022~~2023 driven by higher net charge-offs in the CRE, other consumer, credit card, and indirect auto ~~and other consumer portfolios due to normalizing trends, as well as an increase in the commercial and industrial portfolio.~~portfolios.

Refer to “Note 5. Loans and ACL” for additional discussion of the ACL.

Noninterest Income

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


Table 2: Noninterest Income	Table 2: Noninterest Income
			Three Months Ended March 31,
Table 2: Noninterest Income
Table 2: Noninterest Income
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(Dollars in millions)	(Dollars in millions)			2023		2022		% Change
Insurance income				$	813	$	727	11.8	%
(Dollars in millions)
(Dollars in millions)
Wealth management income
Wealth management income
Wealth management income	Wealth management income			339		343		(1.2)
Investment banking and trading income	Investment banking and trading income			261		261		—
Investment banking and trading income
Investment banking and trading income
Card and payment related fees
Card and payment related fees
Card and payment related fees
Service charges on deposits	Service charges on deposits			249		252		(1.2)
Card and payment related fees				230		212		8.5
Service charges on deposits
Service charges on deposits
Mortgage banking income
Mortgage banking income
Mortgage banking income	Mortgage banking income			142		121		17.4
Lending related fees	Lending related fees			106		85		24.7
Lending related fees
Lending related fees
Operating lease income	Operating lease income			67		58		15.5
Securities gains (losses)				—		(69)		NM
Operating lease income
Operating lease income

Other income	Other income			27		152		(82.2)

Other income

Other income
Total noninterest income
Total noninterest income
Total noninterest income	Total noninterest income			$	2,234	$	2,142	4.3

•~~Insurance income increased primarily due to acquisitions~~Investment banking and ~~4.7% organic growth.~~

•~~Mortgage banking~~trading income increased due to ~~a gain on the sale of a servicing portfolio, partially offset by mortgage servicing rights valuation adjustments in the current quarter.~~

•~~Lending related~~higher merger and acquisition fees ~~increased primarily due to~~and higher ~~unused commitment~~equity and bond origination fees.

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

•Other income ~~decreased~~increased due to ~~the aforementioned gain in the year ago quarter, lower investment income from the Company’s SBIC and other investments, partially offset by~~ higher income from investments held for certain post-retirement benefits (which is primarily offset by higher personnel expense)., partially offset by lower income from certain equity investments.

•Mortgage banking income decreased due to a gain on the sale of a servicing portfolio in the prior year, partially offset by mortgage servicing rights valuation adjustments in the prior year.

•Service charges on deposits decreased primarily due to reduced overdraft fees as a result of continued growth of Truist One Banking.

~~44 Truist Financial Corporation~~

Noninterest Expense

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

								Table 3: Noninterest Expense
		Three Months Ended March 31,
Table 3: Noninterest Expense
Table 3: Noninterest Expense
						Three Months Ended March 31,
						Three Months Ended March 31,
						Three Months Ended March 31,
(Dollars in millions)
(Dollars in millions)
(Dollars in millions)	(Dollars in millions)	2023		2022		% Change
Personnel expense	Personnel expense	$	2,181	$	2,051	6.3	%
Personnel expense
Personnel expense
Professional fees and outside processing
Professional fees and outside processing
Professional fees and outside processing	Professional fees and outside processing	314		363		(13.5)
Software expense	Software expense	214		232		(7.8)
Software expense
Software expense
Net occupancy expense
Net occupancy expense
Net occupancy expense	Net occupancy expense	183		208		(12.0)
Amortization of intangibles	Amortization of intangibles	136		137		(0.7)
Amortization of intangibles
Amortization of intangibles
Equipment expense
Equipment expense
Equipment expense	Equipment expense	110		118		(6.8)
Marketing and customer development	Marketing and customer development	78		84		(7.1)
Marketing and customer development
Marketing and customer development
Operating lease depreciation
Operating lease depreciation
Operating lease depreciation	Operating lease depreciation	46		48		(4.2)
Regulatory costs	Regulatory costs	75		35		114.3
Merger-related and restructuring charges		63		216		(70.8)
Regulatory costs
Regulatory costs
Restructuring charges
Restructuring charges
Restructuring charges

Other expense	Other expense	291		182		59.9

Other expense

Other expense
Total noninterest expense
Total noninterest expense
Total noninterest expense	Total noninterest expense	$	3,691	$	3,674	0.5

50 Truist Financial Corporation

•Other expense decreased primarily due to lower pension expense and operating losses.

•Personnel expense ~~increased~~decreased due to ~~investments in teammates~~lower headcount, partially offset 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 due to lower project spend for merger-related activities, partially offset by 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 ~~2023 merger-related and~~2024 restructuring costs ~~primarily~~predominately reflect ~~charges as a result of the restructuring activities,~~various initiatives, including costs for severance and other benefits and costs related to exiting ~~facilities, and other restructuring initiatives.~~facilities.

										Table 4: Merger-Related and Restructuring Accrual Activity
Table 4: Restructuring Accrual Activity

Table 4: Restructuring Accrual Activity

Table 4: Restructuring Accrual Activity

(Dollars in millions)	(Dollars in millions)	Accrual at Jan 1, 2023		Expense		Utilized		Accrual at Mar 31, 2023
(Dollars in millions)
(Dollars in millions)
Severance and personnel-related
Severance and personnel-related
Severance and personnel-related	Severance and personnel-related	$	9	$	39	$	(31)	$	17
Occupancy and equipment	Occupancy and equipment	—		19		(19)		—
Professional services		12		1		(12)		1
Occupancy and equipment
Occupancy and equipment

Other		5		4		(5)		4

Total	Total	$	26	$	63	$	(67)	$	22

Total

Total

Provision for Income Taxes

~~The~~

For the three months ended March 31, 2024 and 2023, the provision for income taxes from continuing operations was ~~$394~~$232 million ~~for the first quarter~~and $361 million, respectively, representing effective tax rates of ~~2023, compared to $330 million for the earlier quarter.~~17.0% and 20.4%, respectively. 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~~2024 decreased compared to the first quarter of ~~2022~~2023 primarily ~~driven by higher income before taxes, discrete tax expense recognized~~due to a decrease in the current quarter compared to discrete tax benefits recognized in the prior quarter, 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. 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 guidance was adopted prospectively and had no impact on prior periods results. Refer to “Note 1. Basis of Presentation” for additional information on the adoption of this guidance.full year forecasted pre-tax earnings.

~~Truist Financial Corporation 45~~

Segment Results

Truist operates and measures business activity across ~~three~~two segments: ~~Consumer Banking~~CSBB and ~~Wealth, Corporate and Commercial Banking, and Insurance Holdings,~~WB, with functional activities included in ~~Other, Treasury, and Corporate.~~OT&C. The Company’s business segment structure is based on the manner in which financial information is evaluated by management as well as the products and services provided or the type of client served. ~~During~~

Effective January 1, 2024, several business activities were realigned reflecting updates to the ~~first quarter of 2023, Truist reorganized Prime Rate Premium Finance Corporation, which includes AFCO Credit Corporation~~Company’s operating structure. First, the CB&W segment was renamed CSBB and ~~CAFO Holding Company, into~~ the C&CB segment was renamed WB. Second, the Wealth business was realigned into the WB segment from the CSBB segment, representing a separate reporting unit in that segment. Third, the small business banking client segmentation was realigned into the CSBB segment from the WB segment.

On February 20, 2024, the Company entered into an agreement to sell the remaining stake of the common equity in TIH to an investor group, representing substantially all of the Company’s IH segment, which represented a material strategic shift for the Company, and as a result, the Company recast results for all periods presented under the discontinued operations basis of presentation. On May 6, 2024, the Company completed the sale of its remaining equity interests in TIH. TIH was the principal legal entity of the IH segment. ~~Prior period results have been revised~~As the operations of TIH are now included in discontinued operations, the Company no longer presents the IH segment as one of its reportable segments. Refer 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, 2022~~2. Discontinued Operations” for additional ~~disclosures~~information related to ~~Truist’s reportable business segments, including additional details related to results of~~discontinued 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) 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


Table 5: Net Income from Continuing Operations by Reportable Segment
	Three Months Ended March 31,					% Change
(Dollars in millions)		2024		2023			2024 vs. 2023
Consumer and Small Business Banking		$	880	$	1,023		(14.0)	%
Wholesale Banking		876		987			(11.2)
Other, Treasury & Corporate		(623)		(600)			3.8
Truist Financial Corporation		$	1,133	$	1,410		(19.6)

Consumer ~~Banking~~ and ~~Wealth~~Small Business Banking

~~CB&W~~CSBB net income was ~~$1.0 billion~~$880 million for the first quarter of ~~2023, an increase~~2024, a decrease of ~~$183~~$143 million compared to the first quarter of ~~2022.~~2023.

•Segment net interest income ~~increased $556~~decreased $87 million primarily driven by ~~favorable funding credit on deposits attributable to the higher rate environment~~lower deposit and ~~higher average~~ loan balances, partially offset by higher funding ~~costs, lower average~~credit on deposits and ~~lower purchase accounting accretion.~~one extra day in the current period.

Truist Financial Corporation 51

•The provision for credit losses increased ~~$200~~$33 million reflecting ~~increased economic uncertainty in the current quarter as well as~~ higher charge offs in the other consumer and indirect auto portfolios, partially offset by an allowance release in the current quarter and ~~other consumer portfolios and a reserve release~~an allowance build in the earlier quarter.

•Noninterest income decreased $37 million compared to earlier quarter primarily due to a gain on the redemption of noncontrolling equity interest in the earlier quarter, partially offset by higher mortgage banking income in the current quarter.

•Noninterest expense increased $84 million compared to the earlier 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 increased $11.2 billion, or 8.5%, for the first quarter of 2023 compared to the first quarter of 2022, primarily driven by an increase in residential mortgage balances due to slower run-off and increased correspondent production, along with increased Service Finance and Dealer Finance loans, partially offset by lower Student and Partnership loans.

Average total deposits decreased $14.4 billion, or 5.7%, for the first quarter of 2023 compared to the first quarter of 2022, primarily driven by decreases in interest bearing checking, money market and savings, and noninterest bearing deposits.

~~Corporate and Commercial Banking~~

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

•Segment net interest income increased $463 million primarily due to higher funding credit on deposits and higher average loan balances, partially offset by lower purchase accounting accretion and lower PPP revenue.

•The provision for credit losses increased $382 million which reflects an increase in reserves driven by increased economic uncertainty and loan growth in the current quarter as well as an allowance release in the earlier quarter.

•~~Noninterest income decreased $26~~$50 million compared to the earlier quarter primarily due to lower ~~investment income from the Company’s SBIC and other investments, lower structured real estate fees, and commercial~~residential mortgage income ~~partially offset by increases in lending related fees, core trading revenues,~~ and ~~merger and acquisition fees.~~decreased service charges on deposits.

•Noninterest expense increased ~~$55~~$11 million compared to the earlier quarter driven by higher operations support expenses, corporate technology costs and the FDIC special assessment, partially offset by lower salaries expense and operating charge-offs.

CSBB average loans and leases held for investment decreased $12.6 billion, or 9.2%, for the first quarter of 2024 compared to the first quarter of 2023, primarily driven by a decrease in indirect auto balances, the sale of the student loan portfolio at the end of the second quarter of 2023, and decreases in residential mortgage as well as decreases in small business loans, partially offset by increases in the outdoor power sports, equipment, and home improvement balances.

CSBB average total deposits decreased $7.3 billion, or 3.3%, for the first quarter of 2024 compared to the first quarter of 2023, primarily driven by decreases in interest checking, noninterest-bearing deposits, and money market and savings, partially offset by an increase in time deposits.

Wholesale Banking

WB net income was $876 million for the first quarter of 2024, a decrease of $111 million compared to the first quarter of 2023.

•Segment net interest income decreased $153 million primarily due to lower deposit and loan balances combined with higher cost of deposits, partially offset by favorable loan spreads.

•The provision for credit losses decreased $37 million which reflects a lower allowance build in the current quarter compared to the earlier quarter, partially offset by higher commercial and industrial loan charge offs.

•Noninterest income increased $25 million compared to the earlier quarter primarily due to higher income from merger and acquisition activity and higher equity and bond origination fees, partially offset by lower income from strategic investments and commercial mortgage lending.

•Noninterest expense increased $75 million compared to the earlier quarter primarily due to the FDIC special assessment as well as higher corporate technology costs and operations support expenses, partially offset by lower personnel ~~expenses, and merger-related~~expense and restructuring charges.

~~46 Truist Financial Corporation~~

~~C&CB~~WB average loans held for investment ~~increased $26.7~~decreased $4.9 billion, or ~~17%~~2.6%, for the first quarter of ~~2023~~2024 compared to the first quarter of ~~2022,~~2023, primarily due to ~~increases~~decreases in commercial and industrial ~~loans, partially offset by decreases in average PPP loans (commercial and industrial) and average commercial real estate.~~loans.

~~Average~~WB average total deposits decreased ~~$11.4~~$17.7 billion, or ~~7.5%~~11%, for the first quarter of ~~2023~~2024 compared to the first quarter of ~~2022,~~2023, primarily due to declines in average ~~noninterest bearing~~noninterest-bearing deposits, ~~partially offset by increases in~~ money market and ~~savings.~~

~~Insurance Holdings~~

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

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

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

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

Other, Treasury & Corporate

OT&C generated a net loss of ~~$674~~$623 million in the first quarter of ~~2023,~~2024, compared to a net loss of ~~$611~~$600 million in the first quarter of ~~2022.~~2023.

•~~Net~~Segment net interest income decreased ~~$345~~$255 million primarily due to ~~higher~~ funding credit on deposits to other segments and higher rates on Treasury funding, partially offset by ~~higher~~ funding charges primarily on loans to other ~~segments from the higher rate environment.~~

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

•Noninterest income increased ~~$71~~$50 million primarily due to ~~losses on the sale of securities in the earlier quarter.~~higher income from investments held for certain post-retirement benefits (which is more than offset by higher personnel expense).

•Noninterest expense decreased ~~$260~~$148 million compared to the earlier quarter primarily due to ~~a decrease in incremental operating~~credit from other segments for operations support expenses ~~related to the merger,~~and corporate technology project support, partially offset by ~~an increase in professional fees and outside processing, salaries, and regulatory costs.~~higher other post-retirement benefit expense (which is almost entirely offset by higher other income).

~~Truist Financial Corporation 47~~

Analysis of Financial Condition

Investment Activities

The securities portfolio totaled ~~$128.8~~$119.4 billion at March 31, ~~2023,~~2024, compared to ~~$129.5~~$121.5 billion at December 31, ~~2022.~~2023. U.S. Treasury, GSE, and Agency MBS represents 97% of the total securities portfolio as of March 31, ~~2023~~2024 and December 31, ~~2022.~~2023. 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.

52 Truist Financial Corporation

•The decrease in 2024 includes paydowns and maturities of ~~$2.1~~$4.7 billion as well as a decrease in the fair value of AFS securities, partially offset by ~~unrealized gains of $1.1~~$3.8 billion ~~during the quarter.~~in purchases.

•As of March 31, ~~2023, 41%~~2024, 40% of the investment securities portfolio was classified as held-to-maturity based on amortized ~~cost.~~cost, excluding portfolio level basis adjustments.

•As of March 31, ~~2023 and December 31, 2022,~~2024, approximately 5.6% of the securities portfolio was variable rate, excluding the impact of ~~swaps.~~swaps, compared to 5.7% as of December 31, 2023.

•The effective duration of the AFS securities portfolio was ~~6.7~~6.0 years at March 31, ~~2023~~2024 and 6.1 years at December 31, ~~2022.~~2023, excluding the impact of swaps, or 3.9 years at March 31, 2024 and 4.0 years at December 31, 2023, including the impact of swaps. The effective duration of the HTM securities portfolio was 7.1 years at March 31, 2024 and 7.3 years at December 31, 2023.

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)			Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022
		Three Months Ended																Three Months Ended
(Dollars in millions)													(Dollars in millions)	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023		Mar 31, 2023
Commercial:	Commercial:
Commercial and industrial
Commercial and industrial
Commercial and industrial	Commercial and industrial		$	165,095	$	159,308	$	152,123	$	145,558	$	138,872
CRE	CRE		22,689		22,497		22,245		22,508		23,555
Commercial construction	Commercial construction		5,863		5,711		5,284		5,256		5,046

Consumer:	Consumer:
Consumer:
Consumer:
Residential mortgage
Residential mortgage
Residential mortgage	Residential mortgage		56,422		56,292		53,271		49,237		47,976
Home equity	Home equity		10,735		10,887		10,767		10,677		10,822
Indirect auto	Indirect auto		27,743		28,117		28,057		26,496		26,088
Other consumer	Other consumer		27,559		27,479		26,927		25,918		24,921
Student	Student		5,129		5,533		5,958		6,331		6,648
Credit card	Credit card		4,785		4,842		4,755		4,728		4,682

Total average loans and leases HFI	Total average loans and leases HFI		$	326,020	$	320,666	$	309,387	$	296,709	$	288,610
Total average loans and leases HFI
Total average loans and leases HFI

Average loans ~~increased $5.4~~held for investment decreased $4.1 billion, or ~~1.7%~~1.3%, compared to the prior quarter primarily due to momentum from the prior quarter within the commercial portfolio and the impact of the BankDirect acquisition. Loan growth moderated during the quarter as production in lower return portfolios was reduced with end of period loans up 0.5% compared to December 31, 2022.quarter.

•Average commercial loans ~~increased 3.3%~~decreased 0.9% due to ~~broad-based growth within~~a decline in the commercial and industrial ~~portfolio and the BankDirect acquisition. The BankDirect acquisition contributed approximately $900 million of average loan growth compared to the fourth quarter of 2022.~~portfolio.

•Average consumer loans decreased ~~0.6%~~2.0% due to ~~runoff in student loans and partnership lending, as well as lower indirect auto production.~~declines across all portfolios.

At March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, 54% and 53%, respectively, of loans and leases HFI were variable rate.

Truist Financial Corporation 53

Asset Quality

The following tables summarize asset quality information:


Table 7: Asset Quality	Table 7: Asset Quality
Table 7: Asset Quality
Table 7: Asset Quality
(Dollars in millions)
(Dollars in millions)
(Dollars in millions)	(Dollars in millions)	Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022
NPAs:	NPAs:
NPAs:
NPAs:
NPLs:
NPLs:
NPLs:	NPLs:
Commercial and industrial	Commercial and industrial	$	394	$	398	$	443	$	393	$	330
Commercial and industrial
Commercial and industrial
CRE	CRE	117		82		5		19		27
CRE
CRE
Commercial construction
Commercial construction
Commercial construction	Commercial construction	1		—		—		—		—

Residential mortgage	Residential mortgage	233		240		227		269		315

Residential mortgage

Residential mortgage
Home equity
Home equity
Home equity	Home equity	132		135		132		133		122
Indirect auto	Indirect auto	270		289		260		244		227
Indirect auto
Indirect auto
Other consumer
Other consumer
Other consumer	Other consumer	45		44		39		32		23

Total NPLs HFI	Total NPLs HFI	1,192		1,188		1,106		1,090		1,044

Total NPLs HFI

Total NPLs HFI
Loans held for sale
Loans held for sale
Loans held for sale	Loans held for sale	—		—		72		33		39
Total nonaccrual loans and leases	Total nonaccrual loans and leases	1,192		1,188		1,178		1,123		1,083
Total nonaccrual loans and leases
Total nonaccrual loans and leases
Foreclosed real estate
Foreclosed real estate
Foreclosed real estate	Foreclosed real estate	3		4		4		3		3
Other foreclosed property	Other foreclosed property	66		58		58		47		49
Other foreclosed property
Other foreclosed property
Total nonperforming assets
Total nonperforming assets
Total nonperforming assets	Total nonperforming assets	$	1,261	$	1,250	$	1,240	$	1,173	$	1,135

Loans 90 days or more past due and still accruing:	Loans 90 days or more past due and still accruing:

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	$	35	$	49	$	44	$	27	$	22
CRE		—		1		1		3		—
Commercial and industrial
Commercial and industrial

Commercial construction	Commercial construction	—		—		—		3		—

Residential mortgage - government guaranteed		649		759		808		884		996
Residential mortgage - nonguaranteed		25		27		26		27		31
Commercial construction

Commercial construction

Residential mortgage – government guaranteed

Residential mortgage – government guaranteed

Residential mortgage – government guaranteed
Residential mortgage – nonguaranteed
Residential mortgage – nonguaranteed
Residential mortgage – nonguaranteed
Home equity
Home equity
Home equity	Home equity	10		12		9		8		9
Indirect auto	Indirect auto	—		1		1		1		1
Indirect auto
Indirect auto
Other consumer	Other consumer	10		13		9		5		5
Student - government guaranteed		590		702		770		796		818
Student - nonguaranteed		4		4		5		5		4
Other consumer
Other consumer
Student – government guaranteed
Student – government guaranteed
Student – government guaranteed
Student – nonguaranteed
Student – nonguaranteed
Student – nonguaranteed
Credit card
Credit card
Credit card	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	$	1,361	$	1,605	$	1,709	$	1,787	$	1,914

Total loans 90 days or more past due and still accruing

Total loans 90 days or more past due and still accruing
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:	Loans 30-89 days past due and still accruing:
Commercial and industrial	Commercial and industrial	$	125	$	256	$	162	$	223	$	280
Commercial and industrial
Commercial and industrial
CRE
CRE
CRE	CRE	34		25		15		10		13
Commercial construction	Commercial construction	3		5		3		4		1
Commercial construction
Commercial construction

Residential mortgage - government guaranteed		232		268		234		233		216
Residential mortgage - nonguaranteed		259		346		300		302		326
Residential mortgage – government guaranteed

Residential mortgage – government guaranteed

Residential mortgage – government guaranteed
Residential mortgage – nonguaranteed
Residential mortgage – nonguaranteed
Residential mortgage – nonguaranteed
Home equity
Home equity
Home equity	Home equity	65		68		67		68		80
Indirect auto	Indirect auto	511		646		591		584		529
Indirect auto
Indirect auto
Other consumer	Other consumer	164		187		152		166		127
Student - government guaranteed		350		396		375		447		476
Student - nonguaranteed		6		6		6		6		6
Other consumer
Other consumer
Student – government guaranteed
Student – government guaranteed
Student – government guaranteed
Student – nonguaranteed
Student – nonguaranteed
Student – nonguaranteed
Credit card
Credit card
Credit card	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	$	1,805	$	2,267	$	1,957	$	2,091	$	2,101

Total loans 30-89 days past due and still accruing

Total loans 30-89 days past due and still accruing

Nonperforming assets totaled ~~$1.3~~$1.5 billion at March 31, ~~2023, relatively stable~~2024, down slightly compared to December 31, ~~2022.~~2023, due to declines in LHFS and the CRE and indirect auto portfolios, partially offset by an increase in the commercial and industrial portfolio. Nonperforming loans and leases held for investment were ~~0.36%~~0.45% of loans and leases held for investment at March 31, ~~2023, unchanged~~2024, up one basis point compared to December 31, ~~2022.~~2023.

Loans 90 days or more past due and still accruing totaled ~~$1.4 billion~~$538 million at March 31, ~~2023, down $244 million, or seven~~2024, up one basis ~~points~~point as a percentage of loans and leases compared with the prior ~~quarter primarily due to declines in government guaranteed student loans and government guaranteed residential mortgages.~~quarter. 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, ~~2023, flat~~2024, unchanged from December 31, ~~2022.~~2023.

Loans 30-89 days past due and still accruing of ~~$1.8~~$1.7 billion at March 31, ~~2023~~2024 were down ~~$462~~$255 million, or 15seven basis points as a percentage of loans and leases, compared to the prior quarter ~~primarily~~ due to ~~a seasonal decrease~~decreases in the ~~consumer portfolios coupled with a decline in the~~indirect auto, commercial and industrial, ~~portfolio.~~and other consumer portfolios.

54 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 NPLs.


Table 8: Asset Quality Ratios	Table 8: Asset Quality Ratios
		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022
Table 8: Asset Quality Ratios
Table 8: Asset Quality Ratios
		Mar 31, 2024
		Mar 31, 2024
		Mar 31, 2024
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
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	0.55	%	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	0.42		0.49		0.54		0.59		0.66
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
NPLs as a percentage of loans and leases HFI
NPLs as a percentage of loans and leases HFI
NPLs as a percentage of loans and leases HFI	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)	0.36		0.36		0.37		0.37		0.37
NPLs as a percentage of total loans and leases(1)
NPLs as a percentage of total loans and leases(1)
NPAs as a percentage of:
NPAs as a percentage of:
NPAs as a percentage of:	NPAs as a percentage of:
Total assets(1)	Total assets(1)	0.22		0.23		0.23		0.22		0.21
Total assets(1)
Total assets(1)
Loans and leases HFI plus foreclosed property	Loans and leases HFI plus foreclosed property	0.38		0.38		0.37		0.38		0.38
Loans and leases HFI plus foreclosed property
Loans and leases HFI plus foreclosed property

ALLL as a percentage of loans and leases HFI

ALLL as a percentage of loans and leases HFI

ALLL as a percentage of loans and leases HFI	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	3.8x		3.7x		3.8x		3.8x		4.0x

Ratio of ALLL to NPLs

Ratio of ALLL to NPLs
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)
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 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)
Table 9: Asset Quality Ratios (Continued)
		Quarter Ended
		Three Months Ended
		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022
		Three Months Ended

		Three Months Ended
		Mar 31, 2024
		Mar 31, 2024
		Mar 31, 2024
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:	Net charge-offs as a percentage of average loans and leases HFI:
Commercial:	Commercial:
Commercial:
Commercial:
Commercial and industrial
Commercial and industrial
Commercial and industrial	Commercial and industrial	0.15	%	0.08	%	0.02	%	0.01	%	0.04	%
CRE	CRE	0.09		0.19		(0.01)		(0.10)		0.01
CRE
CRE
Commercial construction
Commercial construction
Commercial construction	Commercial construction	(0.04)		(0.06)		(0.10)		(0.08)		(0.02)

Consumer:	Consumer:

Consumer:

Consumer:
Residential mortgage
Residential mortgage
Residential mortgage	Residential mortgage	—		(0.02)		0.01		(0.02)		(0.03)
Home equity	Home equity	(0.15)		(0.01)		(0.13)		(0.17)		(0.12)
Home equity
Home equity
Indirect auto
Indirect auto
Indirect auto	Indirect auto	1.47		1.52		1.15		0.77		1.23
Other consumer	Other consumer	1.29		1.11		1.31		1.27		0.87
Other consumer
Other consumer
Student
Student
Student	Student	0.42		0.34		0.40		0.30		0.33
Credit card	Credit card	3.54		3.68		2.80		2.63		2.77
Credit card
Credit card
Total
Total
Total	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	3.7x		4.1x		5.0x		6.5x		5.8x

Ratio of ALLL to net charge-offs

Ratio of ALLL to net charge-offs

Ratios are annualized, as applicable.

The following table presents activity related to NPAs:

Table 10: Rollforward of NPAs

(Dollars in millions)

2023

2022

Balance, January 1

1,250

1,163

Balance, January 1

New NPAs

621

395

Advances and principal increases

214

108

Advances and principal increases

Disposals of foreclosed assets(1)

(147)

(112)

Disposals of NPLs(2)

(3)

(37)

Disposals of NPLs(2)

Charge-offs and losses

(204)

(115)

Payments

(306)

(180)

Payments

Transfers to performing status

(160)

(101)

Other, net

(4)

Other, net

Ending balance, March 31

1,261

1,135

Ending balance, March 31

(1)Includes charge-offs and losses recorded upon sale of ~~$42~~$66 million and ~~$29~~$42 million for the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, respectively.

(2)Includes gains, net of charge-offs ~~recorded upon sale of $5 million and charge-offs~~ and losses recorded upon sale of $3$4 million and $5 million for the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, respectively.

50Truist Financial Corporation 55

Commercial Credit Concentrations

Truist has established the following general practices to manage commercial credit risk:

•limiting the amount of credit that Truist may extend to a borrower;

•establishing a process for credit approval accountability;

•initial underwriting and analysis of borrower, transaction, market, and collateral risks;

•ongoing servicing and monitoring of individual loans and lending relationships;

•continuous monitoring of the portfolio, market dynamics, and the economy; and

•periodically reevaluating the Company’s strategy and overall exposure as economic, market, and other relevant conditions change.

Truist continuously monitors various segments of its credit portfolios to assess potential concentration risks. Management is actively involved in the credit approval and review process, and risk acceptance criteria are adjusted as needed to reflect the Company’s risk appetite. Consistent with established risk management objectives, the Company utilizes various risk mitigation techniques, including collecting collateral and security interests, obtaining guarantees, and, to a limited extent, through the purchase of credit loss protection via third party insurance and/or use of credit derivatives such as credit default swaps.

In the commercial portfolio, risk concentrations are evaluated regularly on both an aggregate portfolio level and on an individual client basis. The Company manages its commercial exposure through portfolio targets, limits, and transactional risk acceptance criteria as well as other techniques, including but not limited to, loan syndications/participations, loan sales, collateral, structure, covenants, and other risk reduction techniques.

The following tables provide industry distribution by major types of commercial credit exposure and the geographical distribution of commercial exposures. Industry classification for commercial and industrial loans is based on the North American Industry Classification System. Commercial real estate loans are classified based on type of property. For the geographic disclosures, amounts are generally assigned to a state based on the physical billing address of the client or physical property address.

56 Truist Financial Corporation

~~CRE~~


Table 11: Commercial and Industrial Portfolio Industry and Geography
	March 31, 2024				December 31, 2023

(Dollars in millions)	LHFI		% of Total			NPL		LHFI		% of Total		NPL
Industry:
Manufacturing	$	14,598	9.3	%		$	104	$	14,418	9.0	%	$	65
Finance and insurance	13,927		8.8			35		15,526		9.7		40
Health care and social assistance	12,951		8.2			136		12,997		8.1		46
Real estate and rental and leasing	12,446		7.9			8		12,663		7.9		16
Retail trade	12,339		7.8			85		12,740		7.9		89
Public administration	9,721		6.2			—		9,802		6.1		—
Information	8,363		5.3			1		8,346		5.2		—
Wholesale trade	7,963		5.1			2		8,263		5.1		3
Transportation and warehousing	5,612		3.6			17		5,703		3.5		8
Educational services	4,844		3.1			30		5,151		3.2		31
Professional, scientific, and technical services	4,351		2.8			12		4,445		2.8		26
Utilities	4,172		2.6			—		4,555		2.8		—
Administrative and support and waste management and remediation services	3,476		2.2			14		3,716		2.3		49
Arts, entertainment, and recreation	3,384		2.1			—		3,227		2.0		—
Other services (except public administration)	3,138		2.0			1		3,305		2.1		1
Accommodation and food services	2,937		1.9			4		3,067		1.9		13
Other(1)	12,761		8.0			27		12,159		7.5		41
Subtotal	136,983		86.9			476		140,083		87.1		428
Business owner occupied	20,686		13.1			36		20,705		12.9		42
Total commercial and industrial	$	157,669	100.0	%		$	512	$	160,788	100.0	%	$	470

Geography:
Florida	$	18,842	12.0	%		$	261	$	18,947	11.8	%	$	228
Texas	14,666		9.3			8		15,374		9.6		24
North Carolina	12,528		7.9			12		12,959		8.1		11
Georgia	12,167		7.7			49		12,167		7.6		32
New York	10,527		6.7			3		10,336		6.4		3
Virginia	9,341		5.9			10		9,724		6.0		35
California	8,679		5.5			12		9,115		5.7		1
Pennsylvania	7,328		4.6			5		7,423		4.6		4
Maryland	6,740		4.3			4		6,668		4.1		6
Tennessee	5,375		3.4			85		5,852		3.6		43
South Carolina	3,991		2.5			2		4,134		2.6		1
Illinois	3,910		2.5			—		3,892		2.4		10
New Jersey	3,788		2.4			30		3,754		2.3		36
Ohio	2,904		1.8			—		3,220		2.0		6
Other(2)	36,883		23.5			31		37,223		23.2		30
Total commercial and industrial	$	157,669	100.0	%		$	512	$	160,788	100.0	%	$	470

(1)Represents other remaining industries that are deemed to be individually insignificant.

(2)Includes non-U.S. loans of $4.7 billion and ~~Commercial Construction~~$5.1 billion at March 31, 2024 and December 31, 2023, respectively. The remainder represents other remaining states that are deemed to be individually insignificant.

Truist has noted that the CRE and commercial construction portfolios have the potential for heightened risk in the current environment. Truist ~~maintains~~seeks to maintain 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~~totaled $29.6 billion as of March 31, ~~2023.~~2024, which includes 35% related to multifamily residential, 17% related to industrial, 16% related to office, 14% related to retail, and the remainder composed of hotel and other commercial real estate.

Our ~~office portfolio, which makes up approximately 18% of total~~combined CRE and commercial construction ~~loans,~~office portfolio is ~~weighted towards Class A~~primarily composed of multi-tenant, non-gateway properties located within Truist Bank’s footprint. As of March 31, 2024, approximately 98% of these properties are multi-tenant. Additionally, as of March 31, ~~2023. Nonperforming~~2024, 25% and 29% of these exposures are scheduled to mature in 2024 and 2025, respectively, with the remainder scheduled to mature in 2026 and beyond.

Truist Financial Corporation 57


Table 12: CRE Portfolio Property Type and Geography
	March 31, 2024				December 31, 2023

(Dollars in millions)	LHFI		% of Total			NPL		LHFI		% of Total		NPL
Industry:
Multifamily	$	5,825	26.3	%		$	1	$	5,731	25.4	%	$	3
Office	4,117		18.6			244		4,286		19.0		264
Retail	4,080		18.4			6		4,172		18.5		9
Industrial	3,976		18.0			3		4,054		18.0		3
Hotel	2,378		10.7			—		2,445		10.8		—
Other(1)	1,766		8.0			7		1,882		8.3		5
Total CRE	$	22,142	100.0	%		$	261	$	22,570	100.0	%	$	284

Geography:
North Carolina	$	2,607	11.8	%		$	4	$	2,726	12.1	%	$	1
Georgia	2,461		11.1			147		2,532		11.2		120
Florida	2,432		11.0			5		2,481		11.0		5
California	1,729		7.8			56		1,709		7.6		81
Texas	1,600		7.2			—		1,611		7.1		—
New York	1,567		7.1			3		1,574		7.0		3
Pennsylvania	1,353		6.1			—		1,403		6.2		—
Virginia	1,235		5.6			—		1,276		5.7		—
District of Columbia	1,020		4.6			10		1,043		4.6		—
Maryland	897		4.1			12		956		4.2		16
Other(2)	5,241		23.6			24		5,259		23.3		58
Total CRE	$	22,142	100.0	%		$	261	$	22,570	100.0	%	$	284

(1)Represents other remaining property types that are deemed to be individually insignificant.

(2)Includes non-U.S. loans of $69 million and ~~criticized~~$73 million at March 31, 2024 and December 31, 2023, respectively. The remainder represents other remaining states that are deemed to be individually insignificant.


Table 13: Commercial Construction Portfolio Property Type and Geography
	March 31, 2024				December 31, 2023

(Dollars in millions)	LHFI		% of Total			NPL		LHFI		% of Total		NPL
Industry:
Multifamily	$	4,547	60.9	%		$	23	$	3,868	57.9	%	$	23
Industrial	1,050		14.1			—		877		13.1		—
Single Family - CP	801		10.7			—		819		12.3		—
Office	581		7.8			—		634		9.5		1
Single Family – AD and CL	172		2.3			—		196		2.9		—
Other(1)	321		4.2			—		289		4.3		—
Total commercial construction	$	7,472	100.0	%		$	23	$	6,683	100.0	%	$	24

Geography:
Georgia	$	1,147	15.4			$	—	$	1,059	15.8		$	—
Texas	1,046		14.0			23		956		14.3		23
North Carolina	871		11.7			—		777		11.6		—
Florida	867		11.6			—		741		11.1		—
California	501		6.7			—		512		7.7		—
Other(2)	3,040		40.6			—		2,638		39.5		1
Total commercial construction	$	7,472	100.0	%		$	23	$	6,683	100.0	%	$	24

(1)Represents other remaining property types that are deemed to be individually insignificant.

(2)Includes non-U.S. loans ~~in 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
of $22 million and $16 million at March 31, 2024 and December 31, 2023, respectively. The remainder represents other remaining states that are deemed to be individually insignificant.

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

58 Truist Financial Corporation 51

ACL

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


Table 12: Activity in ACL
		For the Three Months Ended
Table 14: Activity in ACL
Table 14: Activity in ACL
Table 14: Activity in ACL
		Three Months Ended
		Three Months Ended
		Three Months Ended
(Dollars in millions)	(Dollars in millions)	Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022
(Dollars in millions)
(Dollars in millions)
Balance, beginning of period(1)
Balance, beginning of period(1)
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	482		467		234		171		(95)

Provision for credit losses

Provision for credit losses

Charge-offs:

Charge-offs:

Charge-offs:	Charge-offs:
Commercial and industrial	Commercial and industrial	(75)		(44)		(51)		(17)		(31)
Commercial and industrial
Commercial and industrial
CRE	CRE	(6)		(11)		—		(1)		(1)
CRE
CRE
Commercial construction
Commercial construction
Commercial construction	Commercial construction	—		—		—		—		(1)

Residential mortgage	Residential mortgage	(1)		(1)		(4)		(2)		(2)

Residential mortgage

Residential mortgage
Home equity
Home equity
Home equity	Home equity	(2)		(6)		(3)		(3)		(1)
Indirect auto	Indirect auto	(127)		(129)		(103)		(77)		(102)
Indirect auto
Indirect auto
Other consumer
Other consumer
Other consumer	Other consumer	(105)		(96)		(109)		(100)		(76)
Student	Student	(5)		(5)		(7)		(4)		(6)
Student
Student
Credit card
Credit card
Credit card	Credit card	(51)		(53)		(42)		(40)		(41)

Total charge-offs	Total charge-offs	(372)		(345)		(319)		(244)		(261)

Total charge-offs

Total charge-offs
Recoveries:
Recoveries:
Recoveries:	Recoveries:
Commercial and industrial	Commercial and industrial	13		14		43		13		17
Commercial and industrial
Commercial and industrial
CRE	CRE	1		1		—		6		1
CRE
CRE
Commercial construction
Commercial construction
Commercial construction	Commercial construction	1		1		2		1		1

Residential mortgage	Residential mortgage	2		3		3		4		6

Residential mortgage

Residential mortgage
Home equity
Home equity
Home equity	Home equity	6		6		8		6		5
Indirect auto	Indirect auto	26		21		21		26		23
Indirect auto
Indirect auto
Other consumer	Other consumer	17		17		21		20		21
Student		—		1		—		—		—
Other consumer
Other consumer

Credit card

Credit card

Credit card	Credit card	9		8		8		9		9
Total recoveries	Total recoveries	75		72		106		85		83
Total recoveries
Total recoveries
Net charge-offs
Net charge-offs
Net charge-offs	Net charge-offs	(297)		(273)		(213)		(159)		(178)
Other(2)	Other(2)	(73)		—		—		(1)		1
Other(2)
Other(2)
Balance, end of period
Balance, end of period
Balance, end of period	Balance, end of period	$	4,761	$	4,649	$	4,455	$	4,434	$	4,423

ACL:(1)	ACL:(1)

ACL:(1)

ACL:(1)
ALLL
ALLL
ALLL	ALLL	$	4,479	$	4,377	$	4,205	$	4,187	$	4,170
RUFC	RUFC	282		272		250		247		253
RUFC
RUFC
Total ACL	Total ACL	$	4,761	$	4,649	$	4,455	$	4,434	$	4,423
Total ACL
Total ACL

(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.

The allowance for credit losses was ~~$4.8~~$5.1 billion and includes ~~$4.5~~$4.8 billion for the allowance for loan and lease losses and ~~$282~~$297 million for the reserve for unfunded commitments. The ALLL ratio was ~~1.37%~~1.56%, up ~~three~~two basis points compared with December 31, ~~2022 primarily due to increased economic uncertainty.~~2023. The ALLL covered nonperforming loans and leases held for investment ~~3.8X~~3.4X compared to ~~3.7X~~3.5X at December 31, ~~2022.~~2023. At March 31, ~~2023,~~2024, the ALLL was ~~3.7X~~2.4X annualized net charge-offs, compared to ~~4.1X~~2.7X at December 31, ~~2022.~~2023.

52 Truist Financial Corporation 59

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 13: Allocation of ALLL by Category
		March 31, 2023						December 31, 2022
Table 15: Allocation of ALLL by Category														Table 15: Allocation of ALLL by Category
	March 31, 2024																				March 31, 2024										December 31, 2023
(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	$	1,497	33.5	%	51.1	%	$	1,409	32.3	%	50.3	%	Commercial and industrial	$	1,360	28.3		28.3	%			51.4	%		$	1,404	29.4			29.4	%		51.6	%
CRE	CRE	251		5.6		6.9		224		5.1		7.0
Commercial construction	Commercial construction	87		1.9		1.8		46		1.1		1.8

Residential mortgage	Residential mortgage	332		7.4		17.2		399		9.1		17.4
Residential mortgage
Residential mortgage
Home equity	Home equity	87		1.9		3.2		90		2.0		3.3
Indirect auto	Indirect auto	993		22.2		8.3		981		22.4		8.6
Other consumer	Other consumer	779		17.4		8.5		770		17.6		8.5
Student		98		2.2		1.5		98		2.2		1.6

Credit card
Credit card
Credit card	Credit card	355		7.9		1.5		360		8.2		1.5
Total ALLL	Total ALLL	4,479		100.0	%	100.0	%	4,377		100.0	%	100.0	%	Total ALLL	4,803		100.0		100.0	%			100.0	%		4,798		100.0			100.0	%		100.0	%
RUFC	RUFC	282						272						RUFC	297														295
Total ACL	Total ACL	$	4,761					$	4,649					Total ACL	$	5,100													$	5,093

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, ~~2023,~~2024, 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 14: Other Assets as of Period End

Table 16: Other Assets as of Period End

(Dollars in millions)

Mar 31, 2023

Dec 31, 2022

(Dollars in millions)

Tax credit and other private equity investments

Bank-owned life insurance

7,651

7,618

Tax credit and other private equity investments

6,730

6,825

Bank-owned life insurance

Prepaid pension assets

5,885

4,539

DTAs

2,393

3,027

Accounts receivable

2,763

2,682

Prepaid pension assets

DTAs, net

Accrued income

2,429

2,265

Leased assets and related assets

2,059

2,082

Leased assets and related assets

Accounts receivable

FHLB stock

2,426

1,279

FHLB stock

Prepaid expenses

Derivative assets

ROU assets

1,151

1,193

Prepaid expenses

1,177

1,162

Equity securities at fair value

857

898

Derivative assets

692

684

ROU assets

Other

792

874

Other

Total other assets

37,005

35,128

60 Truist Financial Corporation 53

Funding Activities

Deposits

The following table presents average deposits:

													Table 15: Average Deposits
Three Months Ended (Dollars in millions)			Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022
Table 17: Average Deposits
Table 17: Average Deposits
Table 17: Average Deposits
		Three Months Ended																Three Months Ended
(Dollars in millions)													(Dollars in millions)	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023		Mar 31, 2023
Noninterest-bearing deposits	Noninterest-bearing deposits		$	131,099	$	141,032	$	146,041	$	148,610	$	145,933
Interest checking	Interest checking		108,886		110,001		111,645		112,375		112,159
Money market and savings	Money market and savings		139,802		144,730		147,659		148,632		141,500
Time deposits	Time deposits		28,671		17,513		14,751		14,133		15,646

Total average deposits	Total average deposits		$	408,458	$	413,276	$	420,096	$	423,750	$	415,238
Total average deposits
Total average deposits

Average deposits for the first quarter of ~~2023~~2024 were ~~$408.5~~$389.1 billion, a decrease of ~~$4.8~~$6.3 billion, or ~~1.2%~~1.6%, 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 deposits decreased ~~7.0%~~4.9% compared to the prior quarter and represented ~~32.1%~~28.0% of total deposits for the first quarter of ~~2023~~2024 compared to ~~34.1%~~29.0% for the fourth quarter of ~~2022~~2023 and ~~35.1%~~32.1% compared to the year ago quarter. ~~Noninterest-bearing deposits declined primarily due to clients seeking high-rate alternatives.~~ Average money market and savings ~~and~~accounts decreased 2.0%. Average interest checking ~~declined 3.4%~~ and ~~1.0%, respectively, compared to the prior quarter. Average~~ time deposits increased ~~64% due to an increase in wholesale funding~~1.8% 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 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, non-operational deposits.0.8%, respectively.

Borrowings

At March 31, ~~2023,~~2024, short-term borrowings totaled ~~$23.7~~$26.3 billion, an increase of ~~$256 million~~$1.5 billion compared to December 31, ~~2022.~~2023. Average short-term borrowings were ~~$24.1~~$26.2 billion, or ~~5.0%~~5.8% of total funding, for the three months ended March 31, ~~2023,~~2024, as compared to ~~$6.9~~$24.1 billion, or ~~1.5%~~5.0%, 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 ~~$69.9~~$39.1 billion at March 31, ~~2023,~~2024, an increase of ~~$26.7 billion~~$153 million compared to December 31, ~~2022. This funding increase was largely to increase our cash position in response to market events.~~2023. During the three months ended March 31, ~~2023,~~2024, the Company had:

•Issued $3.5 billion fixed-to-floating rate senior notes with interest rates between 5.44% and 5.71% due from January 24, 2030 to January 24, 2035.

•Maturities and redemptions of ~~$3.5~~$1.3 billion of senior notes.

•~~Issued $1.5~~Net redemptions of $2.0 billion ~~fixed-to-floating rate senior notes with an interest rate~~ of ~~4.87% due January 26, 2029 and $1.5 billion fixed-to-floating rate senior notes with an interest rate of 5.12% due January 26, 2034.~~

•~~Issued $27.0 billion notional, net, of prepayable FHLB~~ floating rate ~~advances with interest rates of 5.05% to 5.07% due April 10, 2024 to March 13, 2025.~~FHLB advances.

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

Table 18: Book Value per Common Share

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

Mar 31, 2023

Dec 31, 2022

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

Mar 31, 2024

Dec 31, 2023

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

Noncontrolling interests

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

Common shares outstanding at end of period

(1)Tangible common equity ~~and related measures are~~is a non-GAAP ~~measures~~measure that ~~exclude~~excludes the impact of intangible assets, net of deferred ~~taxes, and their related amortization. These measures are~~taxes. This measure is useful for evaluating the performance of a business consistently, whether acquired or developed internally. Truist’s management uses ~~these measures~~this measure to assess ~~profitability, returns relative to~~ balance sheet risk and shareholder value.

Total shareholders’ equity was ~~$62.4~~$59.1 billion at March 31, ~~2023, an increase~~2024, a decrease of ~~$1.9 billion~~$200 million from December 31, ~~2022.~~2023. This ~~increase includes $1.5 billion in net income and a $1.0 billion increase in AOCI, partially offset~~decrease was driven by ~~$794~~$800 million in common and preferred ~~dividends.~~dividends and $716 million in OCI, partially offset by net income of $1.2 billion. Truist’s book value per common share at March 31, ~~2023~~2024 was ~~$41.82,~~$38.97, compared to ~~$40.58~~$39.31 at December 31, ~~2022. Truist~~2023. Truist’s TBVPS ~~of $19.45~~was $21.64 at March 31, ~~2023, increased 7.8%~~2024, compared to $21.83 at December 31, ~~2022 due to increases in AOCI, primarily related to AFS securities, and retained earnings.~~2023.

Truist Financial Corporation 61

Risk Management

Truist ~~maintains~~seeks to maintain 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~~is designed to promote the execution of business strategies and objectives in alignment with its risk appetite.

Truist has developed and employs a risk framework that further guides business functions in identifying, measuring, responding to, monitoring, and reporting on possible exposures to the organization. ~~The~~Truist has developed a risk taxonomy ~~drives~~designed to drive internal risk measurement and monitoring and ~~enables~~enable Truist to clearly and transparently communicate to stakeholders the level of potential risk the Company faces 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~~must be evaluated and prioritized to identify those that present attractive risk-adjusted returns, while preserving asset value and capital.

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~~is designed to support its core values and sound risk management practices in an effort to promote judicious risk-taking behavior.

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

Market Risk

Market risk is the risk to current or anticipated earnings, capital, or economic value arising from changes in the market value of portfolios, securities, or other financial instruments. Market risk results from changes in the level, volatility, or correlations among financial market risk factors or prices, including interest rates, credit spreads, foreign exchange rates, equity, and commodity prices.

~~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~~monitors this risk through two measurement types, (i) NII at risk 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.~~and manages this risk with securities, derivatives, and broader asset liability management activities.

~~The Company’s simulation model takes into account assumptions related~~IRR measurement is reported monthly through the ALCO. Monthly IRR reporting includes exposure and historical trends relative to ~~prepayment trends, using~~risk limit scenarios, impacts to a ~~combination~~wide range of ~~market data~~rate scenarios, 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 comparedsensitivity tests of key assumptions. IRR reporting is provided to the ~~rates applicable to Truist’s assets~~BRC monthly and ~~liabilities. The model also considers Truist’s current and prospective liquidity position, current balance sheet volumes, projected growth and/or contractions, accessibility~~reviews of ~~funds for short-term needs and capital maintenance.~~varying IRR topics are performed quarterly.

~~Deposit betas (the~~IRR measurement is influenced by data, assumptions, and models. Due to their high sensitivity ~~of deposit rate changes relative~~ to market rates, mortgage (loan and security) prepayments leverage an industry model that results in varying prepayment speeds across rate ~~changes) are an important assumption in~~scenarios. Prepayments for non-mortgage loans leverage a mix of dynamic models and static prepayment assumptions based on historical experience. Interest-bearing-deposit rate paid is projected to move at a ratio (deposit beta) of market rates, primarily the ~~interest rate risk modeling process. Truist applies deposit beta assumptions~~Federal Funds Rate, aligned to non-maturity interest-bearing deposit accounts when determining its interest rate sensitivity. Non-maturity, interest-bearing deposit accounts include interest checking accounts, savings accounts, and money market accounts that do not have a contractual maturity. Truist applies an average deposit beta of approximately 50% to its non-maturity interest-bearing accounts when determining its interest rate 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.historical experience.

~~The following table shows the effect that the indicated changes in interest rates would have on net~~Truist uses derivatives to hedge 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
Interest Rate Scenario Annualized Hypothetical Percentage Change in Net Interest Income
Gradual Change in Prime Rate (bps) Prime Rate
Mar 31, 2023 Mar 31, 2022 Mar 31, 2023 Mar 31, 2022
Up 100 9.00 % 4.50 % (0.29) % 4.27 %
Up 50 8.50 4.00 (0.11) 3.29
No Change 8.00 3.50 — —
Down 50(1)
7.50 3.00 (0.58) (3.46)
Down 100(1)
7.00 2.50 (0.70) (3.64)

~~(1)The Down 50~~variability of floating rate loans and ~~100 rate scenarios incorporate a floor~~to hedge valuation changes of ~~one basis point.~~

~~Rate sensitivity decreased compared to prior periods, primarily driven by higher starting rates, higher deposit betas as rates increase~~long-term debt and ~~move into the highest beta tiers, and the addition of forward starting swaps.~~

Management considers how the interest rate risk position could be impacted by changes in balance sheet mix. Liquidity in the banking industry was very strong post-COVID-19, which resulted in growth in noninterest-bearing demand deposits. However, with the significant increase in rates in 2022 and the first quarter of 2023, noninterest-bearing deposits have begun to shift to interest-bearing accounts. Additional movement above what is 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 these advantageous 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.

securities.

5662 Truist Financial Corporation

~~The following table shows~~

NII at risk measures the ~~results of Truist’s interest-rate sensitivity position assuming the loss of additional demand deposits and an associated increase~~change in ~~managed rate deposits versus current projections~~NII under ~~various~~alternate interest rate ~~scenarios. For purposes of this analysis, Truist modeled~~scenarios relative to Truist’s baseline scenario, which incorporates Truist’s current balance sheet and off-balance sheet hedges as well as expectations for new business over the ~~incremental beta of managed rate deposits for the replacement~~forecast horizon. Truist’s baseline scenario relies on assumptions including expectations of the ~~demand deposits~~economy and interest rates – which are influenced by market conditions, new business volume, pricing, and customer behavior. In measuring NII at ~~100%.~~
Table 18: Deposit Mix Sensitivity Analysis
Gradual Change in Rates (bps)
Base Scenario at March 31, 2023(1)
Results Assuming a Decrease in Noninterest-Bearing Demand Deposits
$20 Billion $40 Billion
Up 100 (0.29) % (1.01) % (1.72) %
Up 50 (0.11) (0.63) (1.15)

~~(1)The base scenario is equal~~risk, Truist assumes that changes in key factors, such as prepayments and deposit pricing (betas), largely move in line with those it has experienced in prior rate cycles. However, future behavior of key factors may vary from those used in this measurement. NII at risk measurement assumes, when applicable, that U.S. interest rates floor at zero and does not assume Truist takes any balance sheet or hedging actions in response to the ~~annualized hypothetical~~rate scenarios.

Truist evaluates a wide range of alternate scenarios including instantaneous and gradual as well as parallel and non-parallel changes in interest rates. The table below presents the estimated change to NII over the following 12 months for select parallel alternate scenarios, expressed as a percentage change relative to baseline NII.




Table 19: Interest Sensitivity Simulation Analysis
	Mar 31, 2024		Dec 31, 2023
Up 200bps gradual change in interest rates	(2.35)	%	(1.46)	%
Up 50bps instantaneous change in interest rates	(0.77)		(0.36)
Down 50bps instantaneous change in interest rates	0.31		(0.10)
Down 200bps gradual change in interest rates	0.45		(0.30)

Estimated changes to NII in the table above assume no change in deposit balances or mix relative to the baseline scenario. In increasing interest rate scenarios, rotation from non-interest-bearing into interest bearing deposits would reduce NII. Conversely, in decreasing interest rate scenarios, rotation from higher yielding to lower yielding deposits would benefit net interest ~~income at March 31, 2023 as presented~~income. Truist performs and monitors sensitivity tests of deposit and other key assumptions used in ~~the preceding table.~~NII risk including:

•Asset prepayment speeds

•New loan volume pricing spreads

•Interest-bearing deposit betas

•Non-interest-bearing demand deposit balance runoff, replaced by market funding

EVE measures changes in the economic value of Truist’s current balance sheet and off-balance sheet hedges under alternate rate scenarios relative to starting economic value. Truist uses ~~financial instruments including derivatives to manage~~EVE as a longer-term measure of interest rate ~~risk related to securities, commercial loans, MSRs,~~risk. Truist performs and ~~mortgage banking operations, long-term debt, and other funding sources. Truist has utilized derivatives to facilitate transactions on behalf~~monitors sensitivity tests of its clients and as part of associated hedging activities. As of March 31, 2023, Truist had derivative financial instruments outstanding with notional amounts totaling $363.0 billion. See “Note 16. Derivative Financial Instruments” for additional disclosures.key assumptions used in EVE including:

~~LIBOR Transition~~•Asset prepayment speeds

•Mortgage spreads (mortgage loan and security valuations)

•Interest-bearing deposit beta

•Deposit runoff / decay

~~For most tenors of U.S. dollar LIBOR,~~Key assumption tests are generally performed by increasing and decreasing the ~~administrator of LIBOR extended publication until June 30, 2023. To prepare for~~assumption, whether static or dynamically modeled, relative to their respective starting values and then measuring the ~~transition~~resulting impact to ~~an alternative reference~~NII and EVE under baseline and alternate 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, 2023, Truist had outstanding LIBOR-based instruments that mature after June 30, 2023, including loan and lease exposures totaling approximately $98 billion, notional derivative exposure totaling approximately $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 been reviewed and certain contracts require amendments to support the transition away from LIBOR. Impacted lines of business have started remediating these contracts to include standardized fallback language or amending contracts to new reference rates at maturities or based on client request. Current fallback language used to remediate contracts that mature after June 30, 2023 is generally consistent with ARRC recommendations and includes use of “hardwired fallback” language, which will transition loans to a SOFR based rate after June 30, 2023.scenarios.

The ~~progress~~identification and ~~approach~~testing of key assumptions are influenced by market conditions and management views of key risks. The results of key assumption sensitivity tests are reported to ~~remediation varies based on the type~~ALCO and BRC monthly. The inventory of ~~contract~~key assumptions and ~~existing language used in the agreement. For commercial lending, a significant number of remaining LIBOR contracts required client outreach~~their associated sensitivity tests are reviewed with ALCO 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 ($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 prioritized to provide a more consistent client experience with the “hardwired fallback” transition to SOFR. If there are remaining contracts without fallback language, Truist may leverage the LIBOR Act and corresponding safe harbor provision to transition these loans to SOFR.BRC at least annually.

Truist’s adjustable-rate mortgage products ($3.4 billion) have consistent and adequate fallback language to transition away from LIBOR in line with industry expectations; therefore, these contracts do not require remediation. Remediation of student loans ($4.4 billion) will 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,” 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 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 LIBOR Act to replace LIBOR with a SOFR-based rate established by FRB 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 and have not yet been remediated, providing a remediation path to a SOFR based rate.

~~Truist Financial Corporation 57~~

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 2023. Truist will continue to provide timely notices and information to impacted clients about the transition during 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. The Company is actively using SOFR as a reference rate and has originated approximately $124 billion of loans, issued $12.4 billion of senior and subordinated notes, including fixed rate notes that convert to SOFR in the future, and has $108 billion in notional derivative exposure using this alternative reference rate as of March 31, 2023. Alternatives, such as SOFR, may react differently from LIBOR in times of economic stress. Truist expects SOFR to be the primary pricing benchmark used across the industry and will continue to offer additional SOFR based 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 and early 2023. Additional alternative reference rates, such as Bloomberg Short Term Bank Yield, will be supported based on market demand. 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, 2022.

Market Risk from Trading Activities

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

Truist is also subject to risk-based capital guidelines for market risk under the Market Risk Rule.

Truist Financial Corporation 63

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, ~~2023,~~2024, the aggregate market value of on-balance sheet securitization positions subject to the Market Risk Rule, ~~was $18 million, all of~~ which were non-agency asset backed securities ~~positions.~~positions, was $71 million. 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, ~~2023.~~

~~58 Truist Financial Corporation~~

2024.

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, ~~2023~~2024 and ~~2022. Average one and ten-day VaR measures for the year ended March 31, 2023 decreased from the same period of last year, primarily driven by lower market making inventory.~~2023.


Table 19: VaR-based Measures
		Three Months Ended March 31,
				2023	2022
Table 20: VaR-based Measures
Table 20: VaR-based Measures
Table 20: VaR-based Measures
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
			2024											2024			2023
(Dollars in millions)	(Dollars in millions)				10-Day Holding Period		1-Day Holding Period		10-Day Holding Period		1-Day Holding Period		(Dollars in millions)		10-Day Holding Period	1-Day Holding Period		10-Day Holding Period	1-Day Holding Period
VaR-based Measures:	VaR-based Measures:
Maximum
Maximum
Maximum	Maximum				$	22	$	9	$	38	$	14
Average	Average				15		6		18		6
Minimum	Minimum				10		4		9		3
Period-end	Period-end				22		9		15		4
VaR by Risk Class:	VaR by Risk Class:
Interest Rate Risk	Interest Rate Risk						8				4
Interest Rate Risk
Interest Rate Risk
Credit Spread Risk	Credit Spread Risk						7				4
Equity Price Risk	Equity Price Risk						1				4

Foreign Exchange Risk
Portfolio Diversification	Portfolio Diversification						(9)				(8)
Period-end	Period-end						8				4

64 Truist Financial Corporation

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,
Table 21: Stressed VaR-based Measures - 10 Day Holding Period
Table 21: Stressed VaR-based Measures - 10 Day Holding Period
Table 21: Stressed VaR-based Measures - 10 Day Holding Period
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(Dollars in millions)	(Dollars in millions)		2023		2022		(Dollars in millions)	2024	2023
Maximum	Maximum		$	77	$	109
Average	Average		44		76
Minimum	Minimum		25		59
Period-end	Period-end		31		72

Compared to the same period of prior year, both VaR and Stressed VaR measures ~~decreased~~were generally higher, primarily due to ~~lower~~higher market making inventory ~~levels~~ in ~~2023.~~2024.

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 59~~

VaR Model Backtesting

In accordance with the Market Risk Rule, the Company evaluates the accuracy of its VaR model through daily backtesting by comparing aggregate daily trading gains and losses (excluding fees, commissions, reserves, net interest income, and intraday trading) from covered positions with the corresponding daily VaR-based measures generated by the model. As illustrated in the following graph, there were no Company-wide VaR backtesting exceptions during the twelve months ended March 31, ~~2023.~~2024. 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.

Truist Financial Corporation 65

Model Risk Oversight

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 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~~is reviewed regularly to preemptively address emerging developments in financial markets, assess evolving modeling approaches, and 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 risk factor sensitivities, historical repeats, and hypothetical scenarios with varying liquidity horizons of key risk ~~factor shocks.~~factors. 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~~capture both current and emerging ~~risks are captured appropriately.~~risks. 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.

Net interest income is liability sensitive as elevated rates and quantitative tightening have led to a reduction in deposits, rotation into interest bearing deposits, and higher deposit betas.

Interest rate scenarios in table 19 assume no change in deposit mix. Further rotation from non-interest bearing into interest bearing deposits would increase the liability sensitivity of Truist’s balance sheet.

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.

~~60 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~~promote 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~~conducted for Truist and Truist Bank ~~have sufficient liquidity for~~using 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~~address 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 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.

66 Truist Financial Corporation

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 ~~$87.4~~$85.0 billion and Truist’s average LCR was ~~113%~~115% for the three months ended March 31, ~~2023.~~2024.

Effective July 2021, Truist became subject to final rules implementing the NSFR, which ~~are designed to ensure that~~require banking organizations to maintain a stable, long-term funding profile in relation to their asset composition and off-balance sheet activities. At March 31, ~~2023, the Company~~2024, Truist 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 61~~


Table 22: Selected Liquidity Sources
(Dollars in millions)	Mar 31, 2024		Dec 31, 2023
Unused borrowing capacity:
FRB	$	53,548	$	55,252
FHLB	25,031		24,712
Available investment securities (after haircuts)	73,520		74,717
Available secured borrowing capacity	152,099		154,681
Eligible cash at the FRB	29,353		25,085
Total	$	181,452	$	179,766

At March 31, ~~2023,~~2024, Truist Bank’s available secured borrowing capacity represented approximately 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 and, from time-to-time, potential repurchases or redemptions of a portion of an outstanding tranche of the long-term ~~debt.~~debt of the Parent Company (as may be permitted by the terms of each respective series). See “Note 22. Parent Company Financial Information” in Truist’s Annual Report on Form 10-K for the year ended December 31, ~~2022~~2023 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, ~~2023~~2024 and December 31, ~~2022,~~2023, the Parent Company had 4557 months and 3748 months, respectively, of cash on hand to satisfy projected cash outflows, and 2634 months and 2230 months, respectively, when including the payment of common stock dividends.

Truist Financial Corporation 67

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, ~~2022~~2023 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:

•On ~~March 31,2023, S&P Global~~May 8, 2024, Moody’s Ratings downgraded Truist's long-term senior unsecured rating to Baa1 from A3 and Truist Bank’s baseline credit assessment to a3 from a2 and long-term deposits rating to A1 from Aa3. In addition, Truist Bank’s short-term deposit rating was affirmed ~~the ratings of~~at Prime-1. Ratings outlooks for both Truist and Truist Bank ~~and revised the outlook on those ratings~~were changed to “stable” from “positive,” citing heightened market volatility in the 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 three other large U.S. banks was revised to “stable.”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.

~~62 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 objective is to maintain capital at levels that are in excess of internal capital limits, which are above the regulatory ~~“well capitalized”~~“well-capitalized” minimums. Management 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 internal minimums. Breaches of internal stressed minimums prompt a review of the planned capital actions included in Truist’s capital plan.

Table 22: Capital Requirements

Table 23: Capital Requirements

Minimum Capital

Well Capitalized

Minimum Capital Plus Stress Capital Buffer(1)

Truist

Truist Bank

CET1

4.5

6.5

7.0

CET1

Tier 1 capital

6.0

8.0

8.5

Total capital

8.0

10.0

10.5

Total capital

Leverage ratio

4.0

5.0

Supplementary leverage ratio

3.0

Supplementary leverage ratio

(1)Reflects a SCB requirement of ~~2.5%~~2.9% applicable to Truist as of March 31, ~~2023.~~2024. Truist’s SCB requirement, received in the ~~2022~~2023 CCAR process, is effective from October 1, ~~2022~~2023 to September 30, ~~2023.~~2024. Truist will receive a new preliminary SCB requirement, to become effective October 1, ~~2023,~~2024, following the release of CCAR ~~2023~~2024 results in late June ~~2023.~~2024.

The FRB’s capital plan rule provides that a BHC must update and resubmit its capital plan if the BHC determines there has been or will be a material change in its risk profile, financial condition, or corporate structure since it last submitted the capital plan. Truist determined that the sale of our remaining equity interests in TIH constitutes such a material change and, therefore, addressed the material change in our capital plan submitted in April 2024. The capital plan rule further provides that, upon the occurrence of an event requiring resubmission, a BHC may not make any capital distribution unless it has received prior approval of the FRB. Accordingly, Truist’s capital distributions are now subject to the prior approval of the FRB, pending the FRB's consideration of our capital plan and stress capital buffer requirement. Truist’s Board of Directors declared common and preferred stock dividends payable in June 2024, which have been approved by the FRB.

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

								Table 23: Capital Ratios - Truist Financial Corporation
Table 24: Capital Ratios - Truist Financial Corporation								Table 24: Capital Ratios - Truist Financial Corporation
(Dollars in millions)	(Dollars in millions)	Mar 31, 2023			Dec 31, 2022			(Dollars in millions)	Mar 31, 2024		Dec 31, 2023
Risk-based:	Risk-based:	(preliminary)						Risk-based:	(preliminary)
CET1	CET1	9.1		%	9.0		%	CET1	10.1	%	10.1	%
Tier 1 capital	Tier 1 capital	10.6			10.5
Total capital	Total capital	12.6			12.4
Leverage ratio	Leverage ratio	8.5			8.5
Supplementary leverage ratio	Supplementary leverage ratio	7.3			7.3
Risk-weighted assets	Risk-weighted assets	$	436,549		$	434,413

68 Truist Financial Corporation

Capital ratios remained strong compared to the regulatory requirements for well capitalized banks. Truist declared common dividends of $0.52 per share during the first quarter of ~~2023. The dividend payout ratio for the first quarter of 2023 was 49%.~~2024. Truist did not repurchase any shares in the first quarter of ~~2023 outside of standard activity related to equity compensation plans.~~2024.

~~Truist~~Truist’s CET1 ratio was ~~9.1%~~10.1% as of March 31, ~~2023. The increase since~~2024, flat compared to December 31, ~~2022 represents~~2023, as organic capital generation and RWA optimization were partially offset by the CECL phase-in. ~~Truist closed~~

Truist’s average consolidated LCR was 115% for the ~~sale of the minority stake in Truist Insurance Holdings on April 3, 2023, which adds 30 basis points and 24 basis points~~three months ended March 31, 2024, compared to the ~~risk-based~~ regulatory ~~capital ratios and leverage ratios, respectively.~~minimum of 100%.

Share Repurchase Activity

Table 24: Share Repurchase Activity
(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 1, 2023 to January 31, 2023 — $ — — $ 4,100
February 1, 2023 to February 28, 2023 2 48.84 — 4,100
March 1, 2023 to March 31, 2023 31 32.10 — 4,100
Total 33 $ 33.09 —


Table 25: Share Repurchase Activity
(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	Approximate Dollar Value of Shares that may yet be Purchased Under the Plans
January 1, 2024 to January 31, 2024	—	$	—	—	$	—
February 1, 2024 to February 29, 2024	—	—		—	—
March 1, 2024 to March 31, 2024	9	34.86		—	—
Total	9	$	34.86	—

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

(2)Excludes commissions.

~~(3)~~In July 2022, the Board of Directors approved, effective October 1, 2022, new repurchase authority to effectuate repurchases up to an aggregate of $4.1 billion in shares of the Company’s common stock through September 30, 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, ~~2022.~~2023. 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, ~~2022.~~2023. Disclosures regarding the effects of new accounting pronouncements are included in “Note 1. Basis of Presentation” in this report. There have been no other changes to the ~~significant~~critical accounting policies during ~~2023.~~2024.

Goodwill and Other Intangible Assets

Effective January 1, 2024, several business activities were realigned reflecting updates to the Company’s operating structure. First, the CB&W segment was renamed CSBB and the C&CB segment was renamed WB. Second, the Wealth business was realigned into the WB segment from the CSBB segment, representing a separate reporting unit in that segment. Third, the small business banking client segmentation was realigned into the CSBB segment from the WB segment. Further, TIH was the principal legal entity of the IH segment. As the operations of TIH are now included in discontinued operations, the Company no longer presents the IH segment as one of its reportable segments. Following these realignments, the Company’s three reporting units with goodwill balances were CSBB, WB, and Wealth. Also in conjunction with these realignments, goodwill of $1.7 billion was realigned to WB from CSBB based on the relative fair value of CSBB and Wealth, and goodwill of $220 million was realigned to CSBB from WB based on the relative fair value of WB and the realigned small business banking client segmentation. In addition, the Company completed an assessment of any potential goodwill impairment for all impacted reporting units immediately prior and subsequent to the reassignments and determined that no impairment existed.

Truist Financial Corporation 69

The quantitative valuations of these reporting units for purposes of realigning goodwill use the income approach and a market-based approach, each weighted at 50%. The inputs and assumptions specific to each reporting unit are incorporated in the valuations, including projections of future cash flows, discount rates, and applicable valuation multiples based on the comparable public company information. The income approach utilizes a discounted cash flow analysis of multi-year financial forecasts developed for each reporting unit by considering several inputs and assumptions such as net interest margin, expected credit losses, noninterest income, noninterest expense, and required capital. The market-based approach utilizes comparable public company information, key valuation multiples, and considers a market control premium associated with cost synergies and other cash flow benefits that arise from obtaining control over a reporting unit, and guideline transactions, when applicable.

Truist also assesses the reasonableness of the aggregate estimated fair value of the reporting units by comparison to its market capitalization over a reasonable period of time, including consideration of expected acquirer expense synergies, historic bank control premiums, and the current market.

The projection of net interest margin and noninterest expense are the most significant inputs to the financial projections of the CSBB, WB, and Wealth reporting units. The long-term growth rate used in determining the terminal value of each reporting unit was 3% as of January 1, 2024, based on management’s assessment of the minimum expected terminal growth rate of each reporting unit. Discount rates are estimated based on the Capital Asset Pricing Model, which considers the risk-free interest rate, market risk premium, beta, and unsystematic risk adjustments specific to a particular reporting unit. The discount rates are also calibrated based on risks related to the projected cash flows of each reporting unit. The discount rates utilized for the CSBB, WB and Wealth reporting units as of January 1, 2024 were 13.0%, 11.5%, and 12.5%, respectively.

The quantitative valuation of WB performed in conjunction with the goodwill realignments indicated that as of January 1, 2024, the fair value of the WB reporting unit exceeded its carrying value by less than 10%, indicating that the goodwill of the WB reporting unit may be at risk of impairment. Circumstances that could negatively impact the fair value for the WB reporting unit in the future include a sustained decrease in Truist’s stock price, a decline in industry peer multiples, an increase in the applicable discount rate, and deterioration in the reporting unit’s forecast.

The estimated fair value of a reporting unit is highly sensitive to changes in management’s estimates and assumptions; therefore, in some instances, changes in these assumptions could impact whether the fair value of a reporting unit is greater than its carrying value. The valuation of the WB reporting unit as of January 1, 2024 indicated that if the discount rate were increased less than 50 basis points the reporting unit’s fair value would be less than its carrying value, resulting in a goodwill impairment. Ultimately, future potential changes in management’s assumptions may impact the estimated fair value of a reporting unit and cause the fair value of the reporting unit to be below its carrying value. Additionally, a reporting unit’s carrying value could change based on market conditions, change in the underlying makeup of the reporting unit, or the risk profile of those reporting units, which could impact whether the fair value of a reporting unit is less than carrying value.

The Company monitored events and circumstances during the period from January 1, 2024 to March 31, 2024, including macroeconomic and market factors, industry and banking sector events, Truist specific performance indicators, a comparison of management’s forecast and assumptions to those used in its January 1, 2024 quantitative valuations associated with the realignments of goodwill, and the sensitivity of the January 1, 2024 quantitative results to changes in assumptions as of March 31, 2024. Based on these considerations, 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, 2024.

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 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.

70 Truist Financial Corporation

There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarter ended March 31, ~~2023~~2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Truist Financial Corporation 71

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Refer to the ~~Litigation~~Legal Proceedings and ~~Regulatory~~Other 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, ~~2022.~~2023. 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.

ITEM 5. OTHER INFORMATION

(c) During the three months ended March 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

72 Truist Financial Corporation

ITEM 6. EXHIBITS

Exhibit No.

Description

Location

2.1

Equity Interest Purchase Agreement, dated as of February 20, 2024, by and among Trident Butterfly Investor, Inc., Panther Blocker I, Inc., Panther Blocker II, Inc., Truist Bank, Truist TIH Holdings, Inc., Truist TIH Partners, Inc., TIH Management Holdings, LLC, TIH Management Holdings II, LLC and Truist Insurance Holdings, LLC.

Incorporated herein by reference to Exhibit 2.1 of the Current Report on Form 8-K, filed February 20, 2024.

10.1*

Seventh Amendment to the Truist Financial Corporation 401(k) Savings Plan (August 1, 2020 Restatement)

Incorporated herein by reference to Exhibit 10.61 of the Annual Report on Form 10-K, filed February 27, 2024.

10.2*

Amended and Restated Management Change of Control, Severance, and Noncompetition Plan

Incorporated herein by reference to Exhibit 10.62 of the Annual Report on Form 10-K, filed February 27, 2024.

10.3*

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

~~Filed herewith.~~

10.2*

~~Form of Performance Unit Award Agreement (Senior Executive – 60/5~~10 Retirement) for the Truist Financial Corporation 2022 Incentive Plan.

Filed herewith.

10.3*10.4*

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

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*

Third Amendment to the Truist Financial Corporation Non-Qualified Defined Contribution Plan

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

Filed herewith.

1110.7*

~~Statement re computation of earnings per share.~~Fifth Amendment to the Truist Financial Corporation Non-Qualified Defined Benefit Plan (January 1, 2012 Restatement)

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

10.8*

Eighth Amendment to the Truist Financial Corporation Pension Plan (October 1, 2020 Restatement)

Filed herewith.

10.9*

Eighth Amendment to the Truist Financial Corporation 401(k) Savings Plan (August 1, 2020 Restatement)

Filed herewith.

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 6573

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 ~~1, 2023~~9, 2024

By:

/s/ Michael B. Maguire

Michael B. Maguire

Senior Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

Date:

May ~~1, 2023~~9, 2024

By:

/s/ Cynthia B. Powell

Cynthia B. Powell

Executive Vice President and Corporate Controller

(Principal Accounting Officer)

6674 Truist Financial Corporation






















	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




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

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


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


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	$	—	$	(54)	$	(5)


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




Table 17: Interest Sensitivity Simulation Analysis
Interest Rate Scenario					Annualized Hypothetical Percentage Change in Net Interest Income
Gradual Change in Prime Rate (bps)	Prime Rate
	Mar 31, 2023		Mar 31, 2022		Mar 31, 2023		Mar 31, 2022
Up 100	9.00	%	4.50	%	(0.29)	%	4.27	%
Up 50	8.50		4.00		(0.11)		3.29
No Change	8.00		3.50		—		—
Down 50(1)	7.50		3.00		(0.58)		(3.46)
Down 100(1)	7.00		2.50		(0.70)		(3.64)


Table 18: Deposit Mix Sensitivity Analysis
Gradual Change in Rates (bps)	Base Scenario at March 31, 2023(1)		Results Assuming a Decrease in Noninterest-Bearing Demand Deposits
			$20 Billion		$40 Billion
Up 100	(0.29)	%	(1.01)	%	(1.72)	%
Up 50	(0.11)		(0.63)		(1.15)


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


Table 24: Share Repurchase Activity
(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 1, 2023 to January 31, 2023	—	$	—	—	$	4,100
February 1, 2023 to February 28, 2023	2	48.84		—	4,100
March 1, 2023 to March 31, 2023	31	32.10		—	4,100
Total	33	$	33.09	—