Why did revenue decline sequentially if earnings grew?

Total revenue fell 1.9% sequentially, mainly because net interest income dropped 2.8% (TE basis) on two fewer days in the quarter, deposit mix shifts, and loan repricing that compressed NIM by five basis points. Earnings still rose 9% because noninterest expense fell 5.9%, mostly because 4Q25 included a legal accrual that did not recur, and the effective tax rate dropped to 12.4% from 13.4%.

Is asset quality deteriorating?

Metrics remain strong in absolute terms, but trends are mixed. The NCO ratio rose to 0.61% from 0.57%, driven by commercial construction, and nonperforming loans rose to 0.50% of loans. Much of the NPA increase (indirect auto) reflects a January 2026 change to nonaccrual criteria rather than purely a credit deterioration. The ALLL ratio held at 1.53%, and 30-89 day delinquencies declined $237 million.

What are the 2026 outlook and capital return plans?

Management expects 2026 net interest income to grow 2% to 3% versus 2025, with average loan growth of 3% to 4%, revenue up about 4%, and noninterest expense up about 1.75%. The full-year net charge-off ratio is guided to about 55 bps, and the effective tax rate to about 14.5%. Share repurchases are now targeted at about $5 billion for 2026, with $1.2 billion planned for 2Q26. Management says M&A is not a priority.

What does the new 16% to 18% ROTCE target mean for investors?

It is a long-term aspiration that extends beyond the 15% 2027 target and compares with 13.8% in 1Q26. Achieving it would depend on continued fixed-rate asset repricing, positive operating leverage, loan growth, and sustained capital returns. The company's bridge assumes stable economic conditions. Investors should weigh the target against the sensitivity of NIM and credit costs to rate and macro changes, and the proposed Basel III changes, which management estimates would reduce RWA by roughly 9% to 11%.

Are there any one-time items that affect the quarter's comparability?

The company reported no selected items in 1Q26. The comparison with 4Q25 is affected by a $130 million pre-tax legal accrual (about $0.08 per diluted share) and a $68 million regulatory cost swing tied to a 4Q25 FDIC special assessment credit. Year-over-year comparisons are less affected, though 1Q25 included a $1 million securities loss.

TRUIST FINANCIAL CORP 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed April 17, 2026. Cited figures are marked; the original filing is the authoritative source.

Truist Financial (TFC) reported first quarter 2026 results that show earnings momentum alongside a modest top-line decline sequentially.

Net income available to common shareholders was $1.38 billion^a ($1.09 diluted EPS), up 25% year over year and 9% versus the fourth quarter. ROTCE rose to 13.8% (up 150 bps year over year) and the efficiency ratio improved to 57.9%. Total revenue (TE) fell 1.9% sequentially, driven by a 2.8% decline in taxable-equivalent net interest income and NIM compression of five basis points to 3.02%, though noninterest income was stable at $1.55 billion, up 12% year over year on investment banking, trading, and wealth management strength.

Noninterest expense fell 5.9% sequentially, largely because the fourth quarter included a legal accrual, but was up 2.6% year over year. Asset quality is stable overall but showing some pressure at the margin. The NCO ratio rose to 0.61% from 0.57% sequentially, driven by commercial construction, and nonperforming assets rose $152 million to $1.8 billion^b, largely due to an enhanced nonaccrual policy for indirect auto effective January 1, 2026.

The ALLL ratio held at 1.53%. CET1 was flat at a preliminary 10.8% despite $1.1 billion^c of buybacks, and management raised its 2026 share repurchase target to $5 billion from $4 billion.

Management also set a new long-term ROTCE target of 16%^d to 18% and reiterated a 15% ROTCE goal for 2027. Guidance calls for 2026 net interest income to rise 2% to 3%, revenue to grow about 4%, and noninterest expense to increase about 1.75%.

02—Key points

Key Highlights

EPS of $1.09 diluted, up 25% year over year and 9% sequentially; ROTCE of 13.8%, up 150 bps year over year
Total revenue (TE) down 1.9% sequentially to $5.2 billion; NIM (TE) compressed 5 bps to 3.02% on loan repricing
Noninterest income flat sequentially at $1.55 billion but up 12% year over year, led by investment banking and trading (+36%) and wealth management (+8%)
Noninterest expense down 5.9% sequentially to $2.98 billion, benefiting from the absence of the 4Q25 legal accrual; efficiency ratio improved to 57.9%
Asset quality mixed: NCO ratio rose to 0.61% (from 0.57%) and NPAs rose $152 million to $1.8 billion, partly from a nonaccrual policy change in indirect auto; ALLL ratio steady at 1.53%
Capital returns accelerated: $1.1 billion of buybacks in 1Q26, 2026 repurchase target raised to $5 billion (from $4 billion); CET1 stable at 10.8% (preliminary)
New long-term ROTCE target of 16% to 18%, with a 2027 ROTCE target of 15% reaffirmed

03—Questions

Frequently Asked Questions

Why did revenue decline sequentially if earnings grew?
Total revenue fell 1.9% sequentially, mainly because net interest income dropped 2.8% (TE basis) on two fewer days in the quarter, deposit mix shifts, and loan repricing that compressed NIM by five basis points. Earnings still rose 9% because noninterest expense fell 5.9%, mostly because 4Q25 included a legal accrual that did not recur, and the effective tax rate dropped to 12.4% from 13.4%.
Is asset quality deteriorating?
Metrics remain strong in absolute terms, but trends are mixed. The NCO ratio rose to 0.61% from 0.57%, driven by commercial construction, and nonperforming loans rose to 0.50% of loans. Much of the NPA increase (indirect auto) reflects a January 2026 change to nonaccrual criteria rather than purely a credit deterioration. The ALLL ratio held at 1.53%, and 30-89 day delinquencies declined $237 million.
What are the 2026 outlook and capital return plans?
Management expects 2026 net interest income to grow 2% to 3% versus 2025, with average loan growth of 3% to 4%, revenue up about 4%, and noninterest expense up about 1.75%. The full-year net charge-off ratio is guided to about 55 bps, and the effective tax rate to about 14.5%. Share repurchases are now targeted at about $5 billion for 2026, with $1.2 billion planned for 2Q26. Management says M&A is not a priority.
What does the new 16% to 18% ROTCE target mean for investors?
It is a long-term aspiration that extends beyond the 15% 2027 target and compares with 13.8% in 1Q26. Achieving it would depend on continued fixed-rate asset repricing, positive operating leverage, loan growth, and sustained capital returns. The company's bridge assumes stable economic conditions. Investors should weigh the target against the sensitivity of NIM and credit costs to rate and macro changes, and the proposed Basel III changes, which management estimates would reduce RWA by roughly 9% to 11%.
Are there any one-time items that affect the quarter's comparability?
The company reported no selected items in 1Q26. The comparison with 4Q25 is affected by a $130 million pre-tax legal accrual (about $0.08 per diluted share) and a $68 million regulatory cost swing tied to a 4Q25 FDIC special assessment credit. Year-over-year comparisons are less affected, though 1Q25 included a $1 million securities loss.

04—Continue

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