Truist's Q2 2026 EPS rose 37% to $1.23 on 17% fee growth, buybacks, a lower tax rate and a reserve release, while net interest income grew under 1% as its margin slipped to 2.98%.
Net interest income
$3.6B
+0.9% YoY
Net interest margin
2.98%
Net income
$1.6B
+25.2% YoY
Diluted EPS
$1.23
+36.7% YoY
Efficiency ratio
58.0%
Net charge-off ratio
0.50%
CET1 capital ratio
10.9%
Return on tangible common equity
15.4%
Net interest margin (NIM): what a bank earns on its loans and securities minus what it pays for deposits and borrowing, as a share of those assets. Efficiency ratio: operating costs per dollar of revenue (lower is better). Net charge-off (NCO) ratio: loans written off as unrecoverable, net of recoveries, as a share of average loans. CET1: the bank's core capital cushion against losses, as a share of risk-weighted assets.
How TFC compares with Financials peers
Figure
TFC
Peer median
Rank
Net interest margin
2.98%
3.32%
4th of 6
Efficiency ratio (lower is better)
58.0%
55.4%
3rd of 4
Net charge-off ratio (lower is better)
0.50%
0.46%
3rd of 4
CET1 capital ratio
10.9%
10.9%
3rd of 6
EPS growth (YoY)
+36.7%
+31.1%
3rd of 6
Rank 1 = highest net interest margin, lowest efficiency ratio, lowest charge-off ratio, highest CET1 ratio, fastest EPS growth. Peers are the other Financials companies with a 2026 report on this site, each at its latest period we've analyzed; fiscal calendars differ, so periods are not always the same months.
EPS up 37% on fee income, fewer shares and lower credit costs, while lending margins kept shrinking
Truist earned $1.55 billion in the second quarter of 2026 (three months to June 30), up 25% from $1.24 billion a year earlier, and diluted earnings per share rose 37% to $1.23 from $0.90. Most of the improvement came from outside the core lending business: fee income (noninterest income) rose 17%, led by a 72% jump in investment banking and trading. Net interest income, the bank's largest revenue line, grew less than 1%. The rest of the EPS gain came from buying back 5% of the share count, a lower tax rate, and a smaller provision for loan losses.
At a glance
$1.23 diluted EPS, up 37%. Net income rose 25%. The extra ~11 points of per-share growth come mainly from buybacks: diluted shares fell 5.1% to 1.239 billion.
Net interest margin 2.98%, down 4 basis points from a year ago and from last quarter. Truist is lending more but earning a thinner spread on each dollar. Average loans grew 5.7%, while net interest income grew 0.9%.
Net charge-offs at 0.50% of loans (annualized), flat on a year ago and down from 0.61% in Q1. Realized losses are stable. Nonperforming loans, though, rose to 0.51% of loans from 0.39% (see below).
Key figures
Metric
Q2 2026
Q2 2025
YoY Change
Total revenue
$5,265M
$4,987M
+5.6%
Net interest income
$3,621M
$3,587M
+0.9%
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Period-end figures at June 30, 2026: loans and leases held for investment of $329.8 billion and total deposits of $409.4 billion.
A few definitions for the table. Net interest income is what the bank earns on loans and securities minus what it pays on deposits and borrowings. Net interest margin (NIM) is that figure expressed as a percentage of interest-earning assets; Truist reports it on a "taxable-equivalent" (TE) basis, which grosses up tax-exempt income and is a non-GAAP measure. The efficiency ratio is noninterest expense divided by revenue, so lower is better: Truist spent 58 cents to earn each dollar of revenue, against 59.9 cents a year earlier. CET1 measures the bank's core loss-absorbing capital against its risk-weighted assets. ROTCE is profit relative to shareholders' equity after subtracting goodwill and other intangibles, and is also non-GAAP.
Lending grew, but the spread on each loan narrowed
Average earning assets were $11.5 billion (2.4%) higher than a year earlier, mostly because average loans rose $17.9 billion. The growth came almost entirely from corporate borrowers: average loans in the Wholesale Banking segment rose $14.8 billion (8.2%), "primarily due to increases in average commercial and industrial loan balances." Consumer and Small Business Banking loans grew 1.4%.
Net interest income rose only $34 million on that larger loan book because both sides of the balance sheet repriced lower:
The average loan yield fell 33 basis points to 5.68%, and the securities yield fell 20 bps to 2.96%. Overall earning-asset yield fell 27 bps to 4.89%.
The average cost of deposits fell 29 bps to 1.56%, and the cost of long-term debt fell 25 bps to 4.77%. Total interest-bearing liability cost fell 37 bps.
Truist attributes the year-on-year NII gain to "higher earning assets and loan growth, partially offset by lower loan spreads and fixed-rate debt repricing." Compared with Q1, NIM fell 4 bps because of "slightly higher funding costs, lower loan spreads, and a larger balance sheet." Funding is also shifting toward costlier sources. Average long-term debt rose 19% year on year, and time deposits (CDs) grew 4.9% quarter on quarter, faster than any other deposit type. Interest-free deposits slipped to 25.6% of the total from 25.9% in Q1.
The two segments moved in opposite directions. Consumer and Small Business Banking's net interest income rose $280 million on "higher deposit spreads on higher deposit balances and lower cost of deposits." Wholesale Banking's fell $35 million "primarily due to lower loan spreads," even with 8% more loans. Truist is growing corporate lending fastest, and that is where it is earning the least extra interest on each new loan.
Fees did the heavy lifting
Noninterest income rose $244 million (17%) year on year, which was 88% of the $278 million increase in total revenue.
Fee line
Q2 2026
Q2 2025
Change
Investment banking and trading
$352M
$205M
+71.7%
Wealth management
$375M
$348M
+7.8%
Lending related fees
$120M
$99M
+21.2%
Other deposit revenue
$120M
$108M
+11.1%
Mortgage banking
$116M
$107M
+8.4%
Card and treasury management
$353M
$351M
+0.6%
The filing credits investment banking and trading growth to "higher trading income and capital markets revenue," and wealth management growth to "higher assets under management." Both depend on financial markets. Investment banking and trading was already down 5.4% from Q1's $372 million because of lower capital-markets revenue.
Expenses rose a more modest 2.3%. Personnel costs were up $114 million (6.8%) on "higher salaries and incentives," and were partly offset by professional fees down 10.2% as "various projects" were completed. Revenue grew 5.6% while expenses grew 2.3%, a gap of 3.3 points that the company calls positive operating leverage. That gap is what brought the efficiency ratio down to 58.0%.
Takeaway: Truist's 37% EPS jump rests on markets-driven fees, a shrinking share count and lighter tax and credit charges, not on its core lending spread: net interest income grew 0.9% on 5.7% more loans. Management's own full-year outlook has NII rising just 1% to 1.5%, so reaching its 15% ROTCE target for 2027 still depends on fees holding up and buybacks continuing.
What the headline numbers hide
Where the extra $0.33 of EPS came from. This is an approximate split, derived from the income statement:
Source
Approx. EPS contribution
Basis
Higher pre-provision profit (revenue minus expenses)
~+$0.13
Up $209M pre-tax to $2,210M
Share buybacks
~+$0.07
Diluted shares down 5.1%; Q2 2026 earnings on the old share count would be ~$1.16
Lower provision for credit losses
~+$0.06
$395M vs $488M
Lower effective tax rate
~+$0.05
14.4% vs 18.0%; worth ~$65M of net income
Lower preferred dividends
~+$0.02
$34M vs $60M
About $0.13 of the gain, roughly 40%, came from the operating business earning more before credit costs. The remaining ~60% came from financial levers: fewer shares, a lower tax rate, a smaller provision and lower preferred dividends. Of these, only the buybacks are clearly repeatable. Truist says the lower tax rate was "primarily driven by tax credit activity," and management guides to a ~14.5% full-year effective rate, so that benefit should persist through 2026 but is not operating profit.
The provision fell partly because Truist released reserves. Net charge-offs (loans written off, net of recoveries) actually rose 4.5% to $414 million. The provision was lower because Truist set aside $19 million less than it wrote off, which releases part of its reserve. A year earlier it set aside $92 million more than it wrote off, which added to reserves. The filing states plainly that the provision fell "due to an allowance release in the second quarter of 2026." That swing, about $111 million pre-tax, is an accounting judgement about future losses. It is not lower realized losses.
Problem loans are up even though write-offs are flat. Nonperforming assets rose to $1,748 million from $1,316 million a year earlier (+33%), and nonperforming loans rose to 0.51% of loans from 0.39%. Part of this is a definitional change: Truist tightened its nonaccrual criteria for some indirect auto loans on January 1, 2026. The reserve's coverage of nonperforming loans fell from 3.9x to 2.9x. Loans 30–89 days past due were 0.54% of loans, down from 0.57%, so early-stage delinquencies are not getting worse. Even so, the reserve (1.51% of loans, down from 1.54%) now covers a larger pool of problem loans.
Part of the Q1-to-Q2 fee increase cancels out. "Other income" rose $106 million from Q1, partly from "higher returns from investments held for post-retirement benefits." Truist notes this "is offset by higher personnel expense," so it is a pass-through and adds nothing to profit.
Cash flow is not a useful check for a bank this size. Operating cash flow of $1.7 billion for the first half, against $3.0 billion of net income, is driven by swings in trading assets, derivatives and loans held for sale. It says little about earnings quality here.
Tangible book value rose, but hedge losses held it back. Tangible book value per share rose 5.6% year on year to $33.40. Accumulated other comprehensive loss widened to $6.7 billion from $5.8 billion at December 31, mainly because of $862 million of after-tax losses on cash-flow hedges in the first half. That hurts tangible book value but not reported earnings. There were no securities losses this quarter; Q2 2025 included an $18 million loss.
Overall, earnings quality is reasonable: no large one-off gains inflated the quarter. But the EPS growth rate overstates how fast the underlying franchise is improving.
Capital and buybacks
Truist returned $1.8 billion to common shareholders in the quarter: $636 million of dividends ($0.52 per share) and $1.2 billion of buybacks. That is 121% of the quarter's earnings. CET1 still edged up 10 bps from Q1 to 10.9% because risk-weighted assets fell, which the company links to "balance sheet optimization efforts improving RWA density." Its regulatory minimum including the 2.5% stress capital buffer is 7.0%. $7.7 billion remained on the $10 billion buyback authorization at June 30. Common shares outstanding fell to 1.222 billion from 1.289 billion a year earlier.
Outlook
Management guidance from the July 17 earnings presentation:
Item
Guidance
Q3 2026 revenue (TE) vs Q2's $5.3B
Up ~1%
Q3 2026 noninterest expense vs Q2's $3.1B
Up ~2%
Full-year 2026 revenue (TE) vs 2025's $20.5B
Up 3.5% to 4%
Full-year 2026 net interest income
Up 1% to 1.5%
Full-year 2026 noninterest expense vs 2025's $12.1B
Up ~1.75%
Full-year 2026 net charge-off ratio
~55 bps (2025: 54 bps)
Full-year 2026 effective tax rate
~14.5% (2025: 16.4%)
2026 share repurchases
~$5B (2025: $2.5B)
ROTCE
~15% in 2027
The company said the NII outlook reflects "continued optimization of less strategic and lower relationship return lending portfolios," "lower loan spreads," "less favorable deposit mix," and a forward rate curve that then assumed a 25 bp rate hike in September. Truist also expects maturing fixed-rate securities and loans to be reinvested at higher yields.
Developments since the quarter. On September 15, 2026, Truist disclosed an agreement to sell about $5.5 billion of near-prime auto loans, substantially all of its Regional Acceptance Corporation unit. Closing is expected in late Q3 or early Q4 2026. Truist estimates $5.2 billion of net proceeds, a $535 million recapture of loan-loss reserves, 22 bps of added CET1 capital, and about 10 bps lower net charge-offs a year. It said RAC was roughly breakeven pre-tax in the first half, that its Q3 and 2026 outlook is unchanged excluding these actions, and that a "broader strategic review is ongoing." Separately, Mike Lyons succeeded Bill Rogers as CEO on September 1, 2026.
Our read. The auto-loan sale speaks directly to the credit concern above. Indirect auto is where nonperforming loans rose, and removing near-prime loans should lower both the charge-off rate and the nonperforming ratio. The reserve recapture will produce a one-time gain in Q3 or Q4 that should be kept separate from underlying earnings. The spread problem is harder to fix. Truist's growth is concentrated in corporate lending, where segment NII fell, and it is funding more of its balance sheet with long-term debt and CDs. With NII guided up only 1% to 1.5% for the year, the 2027 ROTCE target of about 15% depends on three things: fee income staying near Q2 levels, the fixed-rate asset repricing actually coming through, and buybacks of roughly $5 billion a year. Q2's 15.4% ROTCE came from a strong capital-markets quarter and a lighter reserve charge. In Q3, watch whether investment banking and trading holds above $300 million, and whether NIM stabilizes near 3% or keeps slipping.