Truist Financial Corporation 2026 Q3 Earnings Call

Thank you, Betsy, and good morning, everyone. Welcome to Truist third quarter 2026 earnings call. With us today are our CEO, Mike Lyons, and our CFO, Mike Maguire. During this morning's call, they will discuss Truist third 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 presentation today will include forward-looking statements and certain non-GAAP financial measures. Please review the disclosures on slides 2 and 3 of the presentation regarding these statements and measures, as well as the appendix for required reconciliations to GAAP. With that, I'll turn it over to Mike Lyons.

Thanks, Brad, and good morning, everyone. It's good to be with you on my first earnings call. I've long admired Truist and its predecessor companies, and I'm excited about the opportunity to build on the company's tremendous assets and attributes to drive better operating performance, faster growth, higher profitability, and greater shareholder value. Before we dig in, and on behalf of everyone at Truist, I want to recognize Bill Rogers and thank him for his leadership and many contributions to the company over his 46-year career. I'm especially grateful for the warm welcome he has shown me since the announcement in June. Turning to the quarter, we grew earnings per share 12% year-on-year, excluding the impact of the previously announced RAC sale and the associated capital neutral AFS repositioning that we completed during the quarter. These results were broadly in line with our expectations.

Wealth management performed ahead of plan. Client deposit growth and asset quality were both better than expected, and we maintained expense discipline, with costs coming in below plan. On the flip side, amid broader market volatility, we had some investment banking revenue get pushed out late in the quarter. Our revenues also reflect lower loan balances as our sharper focus on risk-adjusted returns and wholesale impacted volumes, and we saw higher than expected paydown. Mike will walk you through the quarter in detail in a moment, but first, I wanted to share some of my early observations and how I'm thinking about the opportunity ahead. As I've said to many of you, I came to Truist because of its exceptionally strong foundation and my belief in what this company can become. In my first six weeks, I spent a lot of time meeting with teammates, clients, and investors.

These conversations have only strengthened my conviction in Truist. We have all the raw materials to become one of the country's top-performing banks, and this is our overwhelming number 1 objective. That said, it is no secret that we have not performed up to our potential over the last several years, including falling short of the financial goals set forth at the time of the merger. While I believe that that history and context are important and we have learned from it, we are where we are today, and we know we can perform better. We're now squarely focused on the future and are fortunate to move forward with some tremendous assets. Importantly, we do not need to reinvent Truist to win from here.

From a strategic perspective, while Truist's purpose has always been clear and at the forefront, we have fallen short in translating that purpose into a focused set of strategic priorities and consistently aligning our investment decisions to support them. As a result, some important initiatives have not received the level of investment or attention required, which inevitably makes execution more challenging. Going forward, we are clear on and committed to a strategy which narrows our focus to relationship-based businesses where we are competitively advantaged and can earn attractive returns by becoming the most important financial partner to our clients. We will invest deliberately and consistently to support that strategy. Of course, the path to becoming this most important financial partner requires time and investment and differs across our 2 businesses. In our CSBB segment, it means striving to win the DDA of every client across our branch footprint.

We'll do this by increasing investment in the capabilities that matter most to our clients: great service, value-based products, multi-channel access, speed and safety of payments, durable technology, and trusted personalized advice. As part of this, we are shifting our consumer lending focus to areas that support a strong in-footprint DDA relationship like credit cards, home lending, and unsecured loans. Contrast this approach to today, where we have operated too many nationally focused standalone single product businesses like Marine and RV, RAC, and LightStream, which have diverted attention and resources from growing our core deposit franchise. In wholesale, it means delivering capital and ultimately a broad array of value-added solutions that allow our clients to run their businesses better.

We have an exceptional full-service franchise that offers Wall Street capabilities, industry vertical expertise, and a top 10 balance sheet, which is uniquely combined and delivered through a relationship and community-based model rooted in 150 years plus of history. While wholesale has performed well, we see meaningful opportunity to invest for growth. We're continuing to build a full-service treasury management platform. We have the opportunity to meaningfully expand our sales teams in middle market banking, rates and FX, brokerage, and wealth advisory. There are still a number of attractive lending businesses where we don't yet participate, either at all or at the scale that we should. Put simply, wholesale, including wealth management, has a strong foundation and solid momentum, but there is considerable runway for investment-led growth, and we're already moving on some of this, recently adding over 40 bankers to our commercial middle market business.

From an operational perspective, we need to get back to basics, simplify how we work, remove unnecessary complexity, and eliminate low-priority activities. This is the straightforward operational framework that will support our strategy: simplify, focus, execute, and grow. We start with a great foundation. We have now established a clear strategy and the operational framework to support it. From here, we have some important capital and resource allocation work to do to position ourselves to execute on this strategy successfully. This starts with reconfiguring and improving our balance sheet composition and reallocating parts of our expense base to drive growth through key investments.

With respect to the balance sheet, we plan to remix our securities away from long-dated MBS into a greater mix of US Treasuries, limit the use of our deposits to core strategic lending areas where we can build deep, long-standing relationships, reduce wholesale borrowings, and maintain a strong through-the-cycle capital position. In terms of required investments, we are focused on closing key gaps and strengthening our branch and ATM networks, modernizing our technology, including more AI capabilities, adding client-facing talent, and building digital and payments capabilities, including mobile banking, treasury management, and credit cards. Our goal is to make our branches more inviting, service more consistent, technology more resilient, our product set broader, operations simpler, and ensure our teammates are better supported. To fund these investments, we are systematically reviewing all businesses, operations, and processes through a straightforward lens that asks three questions: Is it core to our strategy?

Is it generating targeted returns? Is it protecting the bank or helping our clients? If something does not pass these tests, we are redirecting resources and capital to fund strategic growth investments while maintaining expense discipline. Our sale of RAC, and the associated repositioning of the balance sheet, and today's announcement with LightStream come directly from this process and reflect our new framework, accelerated pace, and enhanced shareholder focus. We are aiming to finish this evaluation by the end of the year. In early 2027, we will provide more details on our outlook for the year and our path to becoming a top-performing bank as the investments we are making take shape over time. Of course, making the right strategic and resource allocation decisions is only the first part of the equation. From there, we have to execute sharply on our day-to-day operations and a significant investment agenda.

To that end, we have made some important leadership changes in CSBB designed to ensure that we have the right breadth and depth of leadership to execute and achieve our ambitions. As part of this, Steve Boland will join Truist as Vice Chair, bringing more than three decades of consumer banking experience, including as the former President of Retail Banking at Bank of America. Shim Sameer, who we announced this summer as the Head of Truist Wealth Management after a 20-plus-year career at Bank of America, will move over to become Chief Consumer Banking Officer. Shim has extensive experience leading large-scale consumer and branch businesses and operations and will play a critical role as we focus on growing deposits. Jeff Warner will join Truist to lead small business banking, a highly attractive segment where we are well-positioned with significant upside.

Jeff brings over 25 years of business and corporate banking experience to us. In short, we've sharpened CSBB's focus, added highly experienced leaders to complement our existing talent, and flattened the organization, all designed to drive the execution of our growth plan. Going forward across Truist, we will bring disciplined management and deliver crisp execution and operational excellence, and we will hold ourselves accountable for outcomes measured against the industry's top performers. By doing so, we will become a consistently high performer ourselves, making our existing profitability targets look more like table stakes. We remain committed to delivering on our ROTCE targets, which includes 15% in 2027 and 16%-18% over the long term.

Regarding returns, I should note that while some of the actions we're taking in the near term, like RAC and LightStream, will necessarily reduce the balance sheet, our strategy is not about shrinking to achieve higher returns. It's about creating a stronger foundation for both sustainable growth and higher returns over time. We appreciate your support and feedback as we execute this strategic review and position Truist to achieve its full potential. With that, I'll turn it over to Mike to discuss the quarter.