Truist's Reported Third-Quarter EPS Falls To $0.56 After $1.4 Billion Securities Loss And Auto Loan Sale
Adjusted EPS was $1.16, and Truist signed an agreement to sell $7.7 billion of LightStream loans to Carlyle Group.
Truist reported third-quarter diluted earnings of $0.56 per share, against $1.23 in the second quarter, after a loan sale and a securities repositioning. Excluding those items, adjusted EPS was $1.16, up 12% from the third quarter of 2025, according to the company's 8-K filed Friday.
What the results show
Net income available to common shareholders was $684 million, versus $1.519 billion in the second quarter. Truist booked a $1.4 billion pre-tax loss on sales of available-for-sale securities, or $0.90 per share. It also recorded a $581 million pre-tax reserve recapture, or $0.36 per share, plus $106 million of other pre-tax impacts from the sale of the Regional Acceptance Corporation (RAC) auto loan portfolio.
The efficiency ratio, which measures expenses as a share of revenue, was 82.9%, versus 58.0% in the second quarter. Total revenue fell to $3.75 billion from $5.27 billion, because noninterest income dropped to $0.08 billion from $1.64 billion.
Adjusted revenue on a taxable-equivalent basis was $5.3 billion and stable. Net interest income on that basis rose 1.1%, and wealth management income hit a record for a quarter at $407 million. Adjusted return on tangible common equity was 14.6%, versus 15.4% in the second quarter.
LightStream sale and capital
Truist signed an agreement on October 14 to sell $7.7 billion of unsecured consumer loans, substantially all of LightStream's assets, to Carlyle Group, according to the company. The deck lists the sale's proceeds, capital impact and closing timeframe, as well as a possible securities repositioning to offset the capital it creates, among its forward-looking statements.
The common equity tier 1 capital ratio was 10.7% (preliminary), down from 10.9% at June 30. Truist attributed the 20-basis-point decline mainly to capital returned to shareholders and the securities repositioning. It repurchased $1.2 billion of stock and declared a $0.52 dividend.
The RAC sale cut end-of-period loans by $5.5 billion of a $5.9 billion decline, to $323.9 billion. The net charge-off ratio rose to 0.77% from 0.50%, including 39 basis points tied to RAC. Nonperforming loans fell to 0.40% of loans from 0.51%.
What management said
CEO Mike Lyons said in the release that the company "delivered a solid quarter while also taking decisive actions to better position Truist for the future." He added that Truist remains "confident in our ability to deliver against our near- and long-term ROTCE targets."
Truist's earnings call was held Friday at 8 a.m. ET, with the LightStream deal still to close.
Sources
- 8-K Filing — TRUIST FINANCIAL CORP (TFC) — SEC EDGAR
- Exhibit ex991-3q26.htm — TRUIST FINANCIAL CORP 8-K exhibit — SEC EDGAR
- Exhibit ex992-qpsx3q26.htm — TRUIST FINANCIAL CORP 8-K exhibit — SEC EDGAR
- Exhibit ex993-earningsdeck3q26.htm — TRUIST FINANCIAL CORP 8-K exhibit — SEC EDGAR
