01—Abstract
Summary
Summary of the 8-K filed July 18, 2025. Cited figures are marked; the original filing is the authoritative source.
Truist Financial (TFC) reported second quarter 2025 GAAP net income available to common shareholders of $1.18 billiona, or $0.90 per diluted share, versus $0.62 in the year-ago quarter, which was distorted by the 2024 balance sheet repositioning and sale of TIH.
On an adjusted basis, diluted EPS was $0.91b, flat year over year and up from $0.87 in the first quarter of 2025. Total TE revenue rose 1.8% linked-quarter (2.1% adjusted), driven by a 2.3% increase in TE net interest income and a stable 3.02% net interest margin. Average loans grew 2.0% to $312.6 billion, led by commercial and industrial, residential mortgage, indirect auto, and other consumer, while average deposits rose 2.1%.
Asset quality improved: the NCO ratio fell to 0.51% from 0.60%, nonperforming loans fell to 0.39% of loans, and the ALLL ratio decreased to 1.54%. Capital remained strong but declined modestly, with the CET1 ratio at a preliminary 11.0%, down 30 basis points from the prior quarter, as Truist returned about $1.4 billionc to shareholders through $750 million of buybacks and dividends of $0.52 per share. The dividend payout ratio was 57% and the total payout ratio was 121%.
Management received a preliminary stress capital buffer of 2.5%, down 30 basis points, effective October 1, 2025, and guided to a $500 milliond buyback in the third quarter. Expense growth was contained, with adjusted noninterest expense up 3.1% linked-quarter but down 2.1% year over year when excluding one-time items, and management reaffirmed its full-year expense outlook. Looking ahead, management guided to third-quarter adjusted revenue growth of 2.5% to 3.5% and adjusted expense growth of about 1%, and kept its full-year 2025 revenue and expense outlook unchanged.
The company expects net interest income to rise about 3% versus 2024 and anticipates investment banking and trading to recover in the second half. Key watch items include the pace of loan growth, the net charge-off trajectory against the 55 to 60 basis point full-year guide, deposit costs, and whether the payout ratio stays elevated relative to capital generation.
02—Key points
Key Highlights
- GAAP diluted EPS of $0.90 and adjusted diluted EPS of $0.91; net income available to common shareholders of $1.18 billion, up from $0.87 per share in 1Q25.
- Net interest income (TE) rose 2.3% linked-quarter to $3.6 billion, with net interest margin steady at 3.02%, supported by loan growth.
- Average loans and leases HFI increased 2.0% to $312.6 billion, with end-of-period loans up 3.3% to $318.8 billion.
- Asset quality improved: net charge-off ratio fell to 0.51% from 0.60%, nonperforming loans fell to 0.39% of loans, and the ALLL covered nonperforming loans 3.9x.
- CET1 ratio declined to a preliminary 11.0% from 11.3% after $1.4 billion in capital returned; preliminary SCB improves to 2.5% effective October 1, 2025.
- Noninterest expense rose 2.8% linked-quarter to $3.0 billion, mainly on personnel costs, while the full-year expense outlook was reaffirmed.
- 3Q25 outlook: adjusted revenue up 2.5% to 3.5% and adjusted expenses up about 1%, with a planned $500 million share repurchase.
03—Questions
Frequently Asked Questions
How did Truist's core earnings perform in the second quarter of 2025?
Truist reported GAAP diluted EPS of $0.90 and adjusted diluted EPS of $0.91, up from $0.87 in the first quarter. Growth was driven by a 2.3% increase in taxable-equivalent net interest income and a 1.8% rise in total revenue, partly offset by higher expenses. Year-over-year GAAP comparisons are not meaningful because of the 2024 securities repositioning loss and the TIH sale gain.
Is Truist's credit quality improving?
Yes. The net charge-off ratio fell to 0.51% from 0.60% in the prior quarter, and nonperforming loans declined to 0.39% from 0.48%. Total nonperforming assets dropped $302 million to $1.3 billion. The allowance for credit losses was built modestly, and the provision rose to $488 million, reflecting loan growth rather than deterioration.
How safe is the dividend and capital return program?
The $0.52 quarterly dividend represented a 57% dividend payout ratio, and the total payout ratio including $750 million in buybacks was 121%. The preliminary CET1 ratio of 11.0% remains well above the regulatory requirement, and the stress capital buffer is expected to fall to 2.5% on October 1, 2025, which should ease capital requirements. However, the elevated total payout ratio means buybacks are being funded partly from capital, which investors should monitor.
What is the outlook for the rest of 2025?
Management reaffirmed its full-year 2025 revenue and expense outlook and expects net interest income to rise about 3% versus 2024. For the third quarter, it guided to adjusted revenue growth of 2.5% to 3.5% and adjusted expense growth of about 1%. It also expects investment banking and trading income to recover in the second half and projects a full-year net charge-off ratio of 55 to 60 basis points, with a 17.5% effective tax rate.
Why did Truist's GAAP results look so different from a year ago?
Second quarter 2024 results included a $6.65 billion securities loss from a balance sheet repositioning, which produced a GAAP net loss from continuing operations of $3.9 billion. That loss was partly offset by a $6.9 billion gain on the sale of TIH, which was reported in discontinued operations. Excluding these items, comparisons are much more meaningful, and adjusted EPS of $0.91 was flat versus the prior year period.
04—Continue