Truist Financial Corp Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: John Pancari - Evercore Inc - Analyst : Good morning.

Question: John Pancari - Evercore Inc - Analyst : Just on your color that you gave around 2026. I appreciate all the detail there, particularly around the revenue expectations and the ROE. On the revenue front for revenue growth to more than double, can you possibly help us break that out a little bit, how you're thinking about the spread revenue component versus the fee revenue side? And then maybe within the spread revenue side, how you would think about the pace of balance sheet growth as you look at 2026 that would underlie that?

Question: John Pancari - Evercore Inc - Analyst : Okay. Great. And then the -- how you think about the breakout of that revenue growth when you look at overall spread revenue versus the pace of revenue growth you would see on the fee side, how are you thinking about that?

Question: John Pancari - Evercore Inc - Analyst : Okay. Great. Thank you. And then just lastly, I know you had talked about the degree of positive operating leverage, accelerating over this year. Any way to help us frame that as well? I know you don't want to be too specific, but just trying to gauge how much of efficiency improvement is baked in, in terms of thinking about the momentum that you could see as you head into '26?

Question: John Pancari - Evercore Inc - Analyst : No. No, that's fine. We can go off the graphic, I guess, on page 15 and make an estimate based on that, but thank you, I appreciate the color. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 17, 2025 / 12:00PM, TFC.N - Q3 2025 Truist Financial Corp Earnings Call

Question: R. Scott Siefers - Piper Jaffray Inc - Analyst : Good morning, guys, thank you for taking my question. Let's see. So Mike, I was glad to see the interest-bearing deposit costs come down a couple of basis points. That was a nice sort of inflection, sound optimistic on the outlook into the fourth quarter. And then, Bill, your comments were all very constructive on to overall growth into next year. Just curious if you can expand upon -- so the options you see with deposit pricing now that the Fed is lowering rates again, and that's sort of what gives you confidence on that growth momentum into next year as well?

Question: R. Scott Siefers - Piper Jaffray Inc - Analyst : Yes. No, that's great. I appreciate all that. Maybe separately, Bill and Mike, I think you both have been pretty clear that you all are focused organically. Just curious for any updated thoughts or your thoughts on M&A changed at all now that the ground is sort of shifting a bit in the large regional space given some of the transactions we've seen over the last 90 days or so.

Question: R. Scott Siefers - Piper Jaffray Inc - Analyst : Perfect. Okay, good. Thank you, guys, very much. I appreciate it.

Question: Erika Najarian - UBS AG - Analyst : Hi, good morning. In terms of the walk, Bill, to 15% ROTCE, what they think is the appropriate efficiency ratio underneath the surface? I'm sure we could all do the math but just wanted to hear from you in terms of where you want this efficiency ratio to go from the 55.7% as you think about the medium-term. And you mentioned that you're being ultra-competitive. There could be deal making, if you're super focused on Truist could also lead to opportunities for you. So how do you balance optimizing efficiency with potentially being more aggressive at taking advantage of some of the consequences and fall out from the deal making in your footprint?

Question: Erika Najarian - UBS AG - Analyst : Got it. And just a follow-up question for Mike. As we think about more than doubling your revenue growth in '26, so that's clearly better than 3% to 5%, which is what -- the double of what the '25 revenue growth is. How should we think about the trajectory of the net interest margin in that context relative to the cuts in the curve?

Question: Erika Najarian - UBS AG - Analyst : And just to clean up the message just because it's a very crowded earnings day, I want to make sure we're taking away the right thing. When Bill said the rate of revenue growth to more than double in '26 versus '25, are we looking at the full year '25 outlook on slide 14?

Question: Erika Najarian - UBS AG - Analyst : So it's more than double 1.5 to 2.5, not more than double 1 to 2. I know it sounds like teeny tiny, but it's important for investors to clarify. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 17, 2025 / 12:00PM, TFC.N - Q3 2025 Truist Financial Corp Earnings Call

Question: Erika Najarian - UBS AG - Analyst : Got it. Thank you.

Question: Ken Usdin - Autonomous - Analyst : Hey, good morning, guys. I wanted to ask, you mentioned that you've got some fixed rate benefits into the medium term. And just wondering if you could kind of flesh that out a little bit. You can see that the loans are getting about 60 basis points in the fourth quarter. But what's the benefit you have as you look further out in terms of the magnitude that you see rolling over the next couple of years that will help that NIM trajectory?

Question: Ken Usdin - Autonomous - Analyst : Great. That's great color. And just one quick one. It's great to see the IB and trading kind of get back to that level where it had been previously. Just wondering if you could flush out like where the drivers were and just obviously, market dependent, what kind of trajectory could we think about going forward?

Question: Ken Usdin - Autonomous - Analyst : Okay. Thanks, Bill.

Question: Ebrahim Poonawala - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Hey, good morning.

Question: Ebrahim Poonawala - Bofa Merrill Lynch Asset Holdings Inc - Analyst : I just had maybe, Bill, and I think we have, Brad, on the call as well. I would love to get sort of your views on -- from a credit quality perspective, where things stand, both given kind of your businesses in terms of direct consumer lending, even on the subprime side? Just give us a health check on where you see credit quality on the consumer side? And then when we look at like nonaccrual C&I loans, NDFI or non-NDFI, do you see credit at the precipice of material deterioration, but that's how the market has been trading these stocks over the last couple of days? So I would love your perspective on both those. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 17, 2025 / 12:00PM, TFC.N - Q3 2025 Truist Financial Corp Earnings Call

Question: Ebrahim Poonawala - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Got it. I'll just leave it at that. Thank you both.

Question: Matt O'Connor - Deutsche Bank Securities Inc - Analyst : Good morning. Just wanted to come back to the capital levels and buyback commentary and just get a sense of -- if there's flexibility to kind of lean on the buybacks, we're obviously seeing some selloff in the market here. And two days might not be enough to make you want to lean in, but if there's more pressure, broadly speaking, it seems like you've got the capital that you could do more if you wanted to. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 17, 2025 / 12:00PM, TFC.N - Q3 2025 Truist Financial Corp Earnings Call

Question: Matt O'Connor - Deutsche Bank Securities Inc - Analyst : Okay. That's helpful. And then just a real question here. Just the loan growth, you had a lot in commercial real estate, and we've heard about some refinancings away from the banks there, but just wondering what drove about, again, not huge, but $2 billion increase off of the $20 billion in the quarter?

Question: Matt O'Connor - Deutsche Bank Securities Inc - Analyst : Okay, thank you.

Question: Matt O'Connor - Deutsche Bank Securities Inc - Analyst : Good morning.

Question: Betsy Graseck - Morgan Stanley - Analyst : Hi good morning. Can you hear me, okay? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 17, 2025 / 12:00PM, TFC.N - Q3 2025 Truist Financial Corp Earnings Call

Question: Betsy Graseck - Morgan Stanley - Analyst : Okay. So I just want to make sure I understand what we just said, which is the First Brands estimated credit impact is in the forward guide, meaning it's not embedded in this quarter that just reported?

Question: Betsy Graseck - Morgan Stanley - Analyst : Okay. Got it. And then I just also wanted to understand how you're thinking about the underwriting in this environment. Does it change at all? And I'm asking with context to C&I has been doing better, obviously accelerating a little bit. And can we expect to have that kind of acceleration continue here? Or is there a change in underwriting style path due diligence that would perhaps slow it down a bit as we move into '26?

Question: Betsy Graseck - Morgan Stanley - Analyst : Thank you.

Question: Gerard Cassidy - RBC Capital Markets Inc - Analyst : Hi Bill. Hi Mike.

Question: Gerard Cassidy - RBC Capital Markets Inc - Analyst : Bill, I'd like to go back to your comments when you opened up about the new branches being AI -- integrating AI into these branches. Can you share with us how are we going to be able to measure the success that this AI infiltration into the banking industry and you guys in particular, as you tap the potential of these investments, how do you think it's going to manifest itself to us outsiders, where we could say, wow, Truist is way ahead of the curve compared to their peers?

Question: Gerard Cassidy - RBC Capital Markets Inc - Analyst : Very good. And then just as a follow-up, I apologize, beating up on credit, but you guys have demonstrated that you're one of the better underwriters out there. So coming back to the First Brands, I'm curious, Brad, the size of that exposure, how big was it? But second, just how did you guys get involved? If you could just give us some color on your thinking of that relationship?

Question: Gerard Cassidy - RBC Capital Markets Inc - Analyst : Understood. No, I appreciate that, thank you.