Snapshot
Truist Financial Corp reported $5.15B of revenue in Q1 2026, up 5.2% year over year, with diluted EPS of $1.09.
- Revenue
- $5.15B
- YoY growth
- +5.2%
- Diluted EPS
- $1.09
- Operating margin
- —
What management said
- •During this morning's call, they will discuss Truist First Quarter 2026 results, share their perspectives on current business conditions, and provide an updated outlook for 2026.
- •The accompanying presentation, as well as our earnings release and supplemental financial information, are available on the Truist Investor Relations website, ir.truist.com.
- •Our relationships with these clients have led to broad-based franchise engagement, which includes deposits, payments, and lead roles in capital market transactions.
- •A meaningful portion of this benefit is realized through reductions to our tax provision rather than reported revenue.
- •Our performance was driven by continued execution against strategic priorities, including growth in both consumer and wholesale loans, along with strong non-interest income growth led by our investment banking and wealth management businesses.
- •Together, those factors, along with our expense and credit discipline, contributed to 250 basis points of year-over-year positive operating leverage in the quarter.
- •With continued execution against our strategic priorities, continued capital return, and the benefit of expected changes to the capital framework, we're establishing a long-term ROTCE target of 16%-18%.
- •Average loans declined modestly for the fourth quarter, which is consistent with normal seasonality and our goal of emphasizing growth in categories offering the most attractive risk-adjusted returns.
- •Digital share of new-to-bank clients increased to 45%, with Gen Z and Millennials representing more than half of the growth.
- •Active digital users grew year-over-year and digital transaction volumes remained strong, reflecting sustained client engagement with our platforms.
- •Overall, our disciplined focus on capital allocation, pricing, productivity, and digital execution is translating into strong underlying performance and positions Consumer and Small Business Banking well as we progress through the year.
- •In wholesale, we delivered a strong start to 2026 with continued momentum across loans, deposits, and fees while maintaining a disciplined focus on relationship returns and capital efficiency.
What went well
- •Truist delivered first quarter 2026 net income available to common shareholders of $1.4 billion, or $1.09 per diluted share, a 25% increase over the first quarter of last year's $0.87 per share.
- •Investment banking and trading delivered its highest quarterly revenue since 2021, driven by strength across a broad set of product areas, and increased 36% year-over-year.
- •The company generated 250 basis points of year-over-year positive operating leverage, and return on tangible common equity improved 150 basis points to 13.8% versus the first quarter of 2025.
- •Average wholesale loans and deposits increased 9% and 2% respectively year-over-year, with middle market deposits up 11% including 30% growth in expansion markets such as Texas, Ohio, and Pennsylvania.
- •The company established a new long-term ROTCE target of 16%-18% over the next three to five years, while reaffirming clear line of sight to 14% in 2026 and 15% in 2027.
- •Client deposits grew in what is typically a seasonally weak quarter, with average deposits up 0.7% linked quarter and average interest-bearing deposit costs declining 14 basis points to 2.09%.
- •Digital share of new-to-bank clients increased to 45%, with Gen Z and Millennials representing more than half of the growth.
What went wrong
- •Taxable equivalent net interest income decreased 2.8% linked quarter, or $105 million, primarily due to two fewer days in the quarter and seasonal changes in deposit mix.
- •Net interest margin decreased five basis points linked quarter to 3.02%, driven primarily by the seasonal change in deposit mix.
- •Net charge-offs increased four basis points linked quarter to 61 basis points and were up one basis point versus the first quarter of 2025.
- •The full year 2026 net interest income outlook was lowered to 2%-3% growth from the prior 3%-4%, primarily because the federal funds rate is now expected to remain unchanged throughout 2026 versus the prior expectation of two rate cuts.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Net interest income growth | Full year 2026 | 3%-4% | 2%-3% | down |
| Fed funds rate | 2026 | two 25 basis point cuts (April and July) | unchanged throughout 2026 | down |
| Average loan growth | 2026 | approximately 3%-4% | approximately 3%-4% | in line |
| Net interest margin | Full year 2026 average | 3% exit rate by Q4 | exceed 2025 average of 3.03%, but 3% exit unlikely in 2026 (reach 3% in 2027) | down |
| Investment banking and trading growth | 2026 | mid-teens | high teens, maybe even 20% | up |
| Long-term ROTCE target | Next three to five years | n/a | 16%-18% | new |
| Other consumer loan growth | 2026 | n/a | mid- to high-single-digit pace | n/a |
| Average deposit growth | 2026 | n/a | low single digits year-over-year | n/a |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Earnings per share | up 25% versus Q1 2025, up 9% versus Q4 2025 | strong loan growth, non-interest income growth, expense and credit discipline, and lower tax rate |
| Revenue | up 5.1% versus Q1 2025, down 1.9% linked quarter | higher net interest income from loan growth and higher non-interest income year-over-year; linked-quarter decline from day count |
| Investment banking and trading income | up 36% versus Q1 2025, up 11% linked quarter to $372 million | stronger trading income and capital markets activity, partially offset by lower M&A fees |
| Effective tax rate | 12.4% versus 17.9% in Q1 2025 | approximately half the decline from increased client transaction activity in the project finance business |
| Non-interest expense | up 2.6% versus Q1 2025, down 5.9% linked quarter | higher personnel expense year-over-year; linked-quarter decline from lower other expense and lower incentive compensation |
| Wealth management income | up 7.6% versus Q1 2025 | strong wholesale and premier client activity |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| ROTCE target | 15% in 2027 as endpoint | 15% in 2027 reframed as a milestone, new 16%-18% long-term target | raised |
| Rate path / NII | two cuts assumed, 3%-4% NII growth | no cuts assumed, NII growth lowered to 2%-3% | weakening |
| Deposit competition | rationally competitive | more yield-seeking and rate awareness with rates higher for longer | intensifying |
| Investment banking | back to sustainable level, broad-based | highest quarterly revenue since 2021, full-year growth raised to high teens / 20% | improving |
| Loan mix | commercial-led with selective consumer | wholesale up 9% YoY, throttling back lower-return indirect auto, emphasizing risk-adjusted returns | shifting |
| Deposit beta | 45% cumulative interest-bearing | increased to 46%; total beta to 31% | rising |
Q&A summary
How does the lack of Fed funds cuts impact the lowered NII outlook, and what is the competitive deposit environment?
With the April and July cuts removed and the bank positioned liability sensitive on the short end, pressure came through, compounded by a competitive, yield-seeking deposit environment; strong fee momentum and a lower tax outlook allowed the bank to hold the low end of the revenue guide and keep the bottom line in line with January expectations.
How much of the stepped-up buyback is confidence in your outlook versus the Fed's Basel III RWA release?
Management would not attribute the increase from $4 billion to $5 billion to the Basel III proposal; it was a follow-through on capital management targeting a 10% CET1 in 2027, with various moving parts retrending buybacks higher this year.
Why unveil a new long-term 16%-18% ROTCE target today?
Confidence in the direction and momentum, having clarity on the evolving capital framework including Basel III, and the fact that the company did not previously have a long-term target out there given the 14% and 15% targets were short-term, all contributed to establishing the new target.
Why wasn't commercial loan growth higher this quarter and why not more optimistic on the year?
Commercial corporate banking was up over 8% year-over-year with the team focused on higher-quality, higher-return relationships (22% more new relationships, 60% with payments); consumer was intentionally throttled back in lower-return areas like indirect auto, while core consumer businesses like Sheffield, LightStream, and Service Finance were up 7.5%+.
There was a Bloomberg article speculating about a potential partner; what are your thoughts on monetizing the business?
Bill declined to speculate on a rumor he said had been refuted, stating the company feels great about its business and trajectory, with a plan delivering mid-teens EPS growth and an advantaged return to shareholders being the 100% focus of the board, himself, and the team.
What is your confidence in sustaining double-digit investment banking growth beyond 2026 and is it core IB or including trading?
The double-digit reference is for non-trading IB for the year; the business has historically been a high single-digit to low double-digit grower, and management remains confident given continued investment, talent hiring, broad-based product strength, and tight connectivity to the core franchise.