TRUIST FINANCIAL CORP (TFC) FY 2024 MD&A

Verbatim Item 7 Management's Discussion and Analysis from TRUIST FINANCIAL CORP's 10-K for fiscal year 2024. Filing date: 2025-02-25. Report date: 2024-12-31. Accession: 0000092230-25-000020.

This page reproduces the company's own Item 7 MD&A text from the linked SEC filing. It is filer text, not grepcent analysis, scoring, or investment advice.

Extracted from a substantive MD&A body after the formal Item 7 span was a TOC or reference stub. Confidence: high.

Company profile: TFC · All MD&A years: index · Previous year: FY 2023 · Next year: FY 2025

Executive Overview

2024 was an important year for Truist. We added new clients and deepened existing relationships, invested in our core banking business, made enhancements to our technology and risk infrastructure, and maintained our credit and expense discipline.

We executed on several important strategic initiatives, including the sale of TIH and the repositioning of our balance sheet. On May 6, 2024, we completed the divestiture of TIH. Refer to “Note 2. Discontinued Operations” for additional information. Following the sale of TIH, Truist executed a strategic balance sheet repositioning of a portion of its AFS investment securities portfolio by selling lower-yielding investment securities, resulting in an after-tax loss of $5.1 billion in 2024, allowing Truist to reinvest a portion of the proceeds in higher yielding securities.

These actions increased our capital and further enhanced our ability to support the growth needs of clients, while also returning capital to shareholders. We returned $3.8 billion of capital to our common shareholders through $2.8 billion of common stock dividends and $1.0 billion of common share repurchases during 2024. As of December 31, 2024, we have $4.0 billion remaining under our $5.0 billion common share repurchase authorization through the end of 2026.

In addition, Truist redeemed all outstanding shares of its perpetual preferred stock series L and the corresponding depositary shares representing fractional interests in such series for $750 million.

In July 2024, we successfully completed the sale of Sterling Capital Management LLC, an asset management business. Cash proceeds and the gain recognized on the sale were not material.

Clarke R. Starnes III retired from his position as CRO and Vice Chair. Brad Bender, a 20-year Truist veteran who previously served as Truist’s Head of Enterprise Operational Services and interim Chief Information Officer, succeeded Starnes as CRO.

Hugh S. “Beau” Cummins III, Vice Chair and Chief Operating Officer of Truist, resigned from his position, effective January 13, 2025. Following Mr. Cummins’ departure, management of the enterprise payments business transitioned to Kristin Lesher, Senior Executive Vice President and Chief Wholesale Banking Officer. Mr. Cummins’ remaining responsibilities, including leading teams responsible for enterprise operational services, enterprise corporate services, the strategy, transformation, and performance office, and the governance and controls organization, transitioned to Michael B. Maguire, Senior Executive Vice President and CFO.

We launched Truist Cares for Western North Carolina, a three-year, $725 million commitment to support and sustain hurricane recovery and resiliency through dedicated capital to support rebuilding and resiliency, loans or investments in Community Development Financial Institutions, philanthropic grants to local and national nonprofit organizations, and community service hours.

Truist Financial Corporation 47

Key Areas of Focus

Our strategic direction is to build the top super regional bank that grows with our clients with care. Our 2025 strategic objectives are to:

•Leverage our capital position by growing and capturing additional share within our high growth markets and existing client base in key focus areas in WB and CSBB and in areas, markets, and client solutions where we have invested significantly and have momentum.

•In WB, deepen and grow existing client relationships in areas like Payments and Wealth, enhance the client digital experience, continue our momentum in Investment Banking and Trading, and capture more share of the commercial middle market.

•In CSBB, grow core deposits, deepen existing relationships with Premier clients, enhance the client digital experience, and drive additional fee and loan growth through our differentiated consumer lending solutions.

•Continue to invest in important areas like new and existing talent, technology, risk, and cybersecurity, while maintaining our expense discipline with a goal of driving positive operating leverage.

•Maintain our credit and risk discipline.

•Return capital to shareholders through our common stock dividend and share repurchase authorization.

Financial Results

Net income to common shareholders totaled $4.5 billion, or $3.36 per share, for 2024, compared to a net loss available to common shareholders of $1.5 billion, or $1.09 per share, from the prior year.

•Results from continuing operations for 2024 included securities losses of $6.7 billion ($5.1 billion after-tax or $3.82 per share) from the balance sheet repositioning, a charitable contribution to the Truist Foundation of $150 million ($115 million after-tax, or $0.09 per share), restructuring charges of $120 million ($92 million after-tax, or $0.07 per share), and the FDIC special assessment adjustment of $64 million ($49 million after-tax, or $0.04 per share).

•Results from continuing operations for 2023 included a non-cash goodwill impairment charge of $6.1 billion ($4.56 per share), the FDIC special assessment of $507 million ($387 million after-tax, or $0.29 per share), restructuring charges of $320 million ($244 million after-tax, or $0.18 per share), and a discrete tax benefit of $204 million ($0.15 per share).

Net income from discontinued operations was $4.9 billion for 2024, compared to $456 million for 2023.

•Results from discontinued operations for 2024 included a gain on the sale of TIH of $6.9 billion ($4.8 billion after-tax, or $3.64 per share), the accelerated recognition of TIH equity compensation expense for certain event-driven awards of $99 million ($76 million after tax, or $0.06 per share), and restructuring charges of $82 million ($62 million after-tax, or $0.05 per share).

•Results from discontinued operations for 2023 included restructuring charges of $55 million ($42 million after-tax, or $0.03 per share).

Table 8: Earnings Highlights
Year Ended December 31, (Dollars in millions)							Change
	2024		2023	2022		2024 vs. 2023		2023 vs. 2022
Net income (loss) available to common shareholders		$	4,469		$	(1,452)			$	5,927		$	5,921	$	(7,379)
Diluted earnings per common share		3.36		(1.09)			4.43			4.45		(5.52)
Net interest income - TE		$	14,303		$	14,744			$	14,455		$	(441)	$	289
Noninterest income		(813)		5,498			5,660			(6,311)		(162)
Total taxable-equivalent revenue		$	13,490		$	20,242			$	20,115		$	(6,752)	$	127
Less taxable-equivalent adjustment		212		220			142
Total revenue		$	13,278		$	20,022			$	19,973
Return on average assets		0.92	%	(0.19)	%		1.15	%		1.11	%	(1.34)	%
Return on average common shareholders’ equity		8.0		(2.6)			10.4			10.6		(13.0)
Net interest margin - TE		3.03		2.98			3.01			0.05		(0.03)

48 Truist Financial Corporation

Truist’s TE revenue for 2024 was $13.5 billion. Excluding securities losses, TE revenue was $20.1 billion, representing a decrease of $101 million compared to 2023. Net interest income on a TE basis was $14.3 billion, down $441 million, or 3.0%, from the prior year primarily as a result of having a smaller more efficient balance sheet after the repositioning improving NIM by five basis points.

•Average earning assets decreased $21.6 billion, or 4.4%, compared to the prior year primarily due to declines in average total loans of $15.8 billion, or 4.9%, and average securities of $13.7 billion, or 10.0%, partially offset by an increase in other earning assets of $7.3 billion, or 25%. The change in average securities was driven by maturities and the balance sheet repositioning. The change in other earning assets (increase in balances held at the Federal Reserve) was driven by the balance sheet repositioning.

•Average deposits decreased $13.3 billion, or 3.3%, average short-term borrowings were flat, and average long-term debt decreased $13.0 billion, or 26% as a result of the smaller more efficient balance sheet.

NIM was 3.03% for 2024, up five basis points compared to the prior year.

•The yield on the average total loan portfolio was 6.34% for 2024, up 22 basis points, compared to the prior year primarily reflecting higher market interest rates. The yield on the average securities portfolio was 2.83% for 2024, up 60 basis points compared to the prior year, reflecting the balance sheet repositioning and reinvesting cash flows into higher yielding securities.

•The average cost of total deposits was 2.02% for 2024, up 42 basis points compared to the prior year. The average cost of short-term borrowings was 5.36% for 2024, up 11 basis points compared to the prior year. The average cost of long-term debt was 4.94% for 2024, up 48 basis points compared to the prior year. The increases in rates on deposits and other funding sources was largely attributable to the repricing of lower cost funding sources.

The provision for credit losses was $1.9 billion for the year ended December 31, 2024 compared to $2.1 billion for the year ended December 31, 2023. The net charge-off ratio for the current year of 0.59% was up 9 basis points compared to the prior year.

•The decrease in the current year provision expense primarily reflects a lower allowance build.

•The net charge-off ratio was up compared to the prior year driven by higher net charge-offs in the CRE, other consumer, credit card, and indirect auto portfolios, partially offset by higher recoveries in the commercial and industrial portfolio. Additionally, the prior year included $98 million of charge-offs related to the sale of the student loan portfolio.

Noninterest income was down $6.3 billion for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to $6.7 billion of securities losses resulting from the balance sheet repositioning, lower lending related fees, operating lease income, and card and payment related fees, partially offset by higher investment banking and trading income, wealth management income, service charges on deposits, and other income. Excluding securities losses, noninterest income was up $340 million, or 6.2%, compared to the prior year.

Noninterest expense was down $6.7 billion, or 36%, for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to the 2023 goodwill impairment of $6.1 billion, lower regulatory charges due to the FDIC special assessment and related adjustments ($64 million in 2024 compared to $507 million in 2023), lower other expense, excluding the charitable contribution to the Truist Foundation, lower amortization of intangibles, and operating lease depreciation, partially offset by a $150 million charitable contribution to the Truist Foundation (other expense) and higher professional fees and outside processing expense. Restructuring charges decreased $200 million; both periods included restructuring charges for severance charges as well as facilities optimization costs. Noninterest expenses excluding the charitable contribution, the amortization of intangibles, the FDIC special assessment adjustment, restructuring charges, and a small loss on the early extinguishment of debt, decreased $44 million, or 0.4%.

Truist had a benefit from income taxes of $556 million for 2024, compared to a provision for income taxes of $738 million in 2023. The provision for income taxes for 2023 reflects a pre-tax loss, which includes a non-deductible goodwill impairment charge, partially offset by a discrete tax benefit in the fourth quarter of 2023.

Truist’s total assets at December 31, 2024 were $531.2 billion, a decrease of $4.2 billion, or 0.8%, compared to December 31, 2023 as loans and leases, net of ALLL, decreased $5.7 billion, or 1.9%, total securities decreased $3.4 billion, or 2.8%, partially offset by an increase of $8.7 billion, or 35%, in interest-bearing deposits with banks.

Total liabilities at December 31, 2024 were $467.5 billion, a decrease of $8.6 billion, or 1.8%, from the prior year, reflecting a decrease of $5.3 billion, or 1.3%, in deposits and a decrease of $4.0 billion, or 10.2%, in long-term debt, partially offset by an increase of $4.4 billion, or 17.6%, in short-term borrowings.

Truist Financial Corporation 49

Total shareholders’ equity was $63.7 billion at December 31, 2024, an increase of $4.4 billion from December 31, 2023. This increase includes $4.8 billion in net income and $4.3 billion in OCI, partially offset by $3.1 billion in common and preferred dividends, $1.0 billion in common share repurchases, and $750 million for the redemption of series L preferred stock. Truist’s book value per common share at December 31, 2024 was $43.90, compared to $39.31 at December 31, 2023. Truist’s TBVPS of $30.01 at December 31, 2024 increased 37% compared to December 31, 2023.

Asset quality remained stable.

•Nonperforming loans and leases held for investment totaled $1.4 billion or 0.47% of loans and leases held for investment at December 31, 2024, up three basis points compared to December 31, 2023.

•Loans 90 days or more past due and still accruing totaled $587 million or 0.19% of loans and leases held for investment at December 31, 2024, up two basis point as a percentage of loans and leases compared with December 31, 2023. Excluding government guaranteed loans, the ratio of loans 90 days or more past due and still accruing as a percentage of loans and leases was 0.05% at December 31, 2024, up one basis point from December 31, 2023.

•The allowance for credit losses was $5.2 billion and includes $4.9 billion for the allowance for loan and lease losses and $304 million for the reserve for unfunded commitments. The ALLL ratio was 1.59%, up five basis points compared with December 31, 2023.

Capital strengthened during 2024.

•Truist’s CET1 ratio was 11.5% as of December 31, 2024, up 140 basis points since December 31, 2023 from the sale of TIH and organic capital generation, partially offset by the balance sheet repositioning, common dividends, and share repurchases.

•Truist returned $3.8 billion to common shareholders through declared common dividends of $2.8 billion or $2.08 per share during 2024 and repurchases of $1.0 billion of common stock, resulting in a dividend payout ratio of 62% and total payout ratio of 85%.

•Truist redeemed all outstanding shares of its perpetual preferred stock series L and the corresponding depositary shares representing fractional interests in such series for $750 million.

•Truist’s average consolidated LCR was 109% for the three months ended December 31, 2024, compared to the regulatory minimum of 100%.

Analysis of Results of Operations

Net Interest Income and NIM

Taxable-equivalent net interest income for the year ended December 31, 2024 was down $441 million, or 3.0%, compared to the year ended December 31, 2023 primarily as a result of having a smaller more efficient balance sheet after the repositioning. Net interest margin was 3.03%, up five basis points compared to the prior year.

•Average deposits decreased $13.3 billion, or 3.3%, average short-term borrowings were flat, and average long-term debt decreased $13.0 billion, or 26% due to decreased funding needs.

The major components of net interest income and the related annualized yields as well as the variances between the periods caused by changes in interest rates versus changes in volumes are summarized below.

50 Truist Financial Corporation

Table 9: Taxable-Equivalent Net Interest Income and Rate / Volume Analysis
																		2024 vs. 2023		2023 vs. 2022
Year Ended December 31, (Dollars in millions)	Average Balances(1)		Annualized Yield/Rate(2)		Income/Expense(2)		Incr. (Decr.)		Change due to		Incr. (Decr.)		Change due to
2024		2023		2022		2024		2023		2022		2024		2023	2022			Rate		Volume			Rate		Volume
Assets
AFS and HTM securities at amortized cost:
U.S. Treasury	$	12,100			$	11,021			$	10,591			4.01	%	1.20	%		0.88	%		$	485			$	132			$	93			$	353			$	339			$	14			$	39			$	35	$	4
GSE	390			348			498			3.38			2.94		2.24			13			10			11			3			2			1			(1)			3			(4)
Agency MBS	109,652			121,923			132,222			2.70			2.31		1.93			2,958			2,821			2,552			137			441			(304)			269			477			(208)
States and political subdivisions	417			424			392			4.14			4.13		3.88			17			18			15			(1)			—			(1)			3			1			2
Non-agency MBS	1,282			3,816			4,072			2.85			2.34		2.30			37			89			94			(52)			16			(68)			(5)			2			(7)
Other	17			20			44			5.25			5.37		3.60			1			1			2			—			—			—			(1)			1			(2)
Total securities	123,858			137,552			147,819			2.83			2.23		1.87			3,511			3,071			2,767			440			798			(358)			304			519			(215)
Interest earning trading assets	5,320			4,739			5,767			6.12			6.64		4.15			326			314			239			12			(26)			38			75			124			(49)
Other earning assets(3)	36,622			29,335			19,886			5.48			5.31		1.92			2,008			1,557			381			451			51			400			1,176			927			249
Loans and leases, net of unearned income:
Commercial and industrial	155,674			163,983			149,030			6.36			6.34		3.91			9,897			10,389			5,823			(492)			33			(525)			4,566			3,931			635
CRE	21,585			22,741			22,697			6.81			6.71		4.01			1,480			1,535			920			(55)			22			(77)			615			613			2
Commercial Construction	7,729			6,125			5,326			7.67			7.62		4.46			583			459			228			124			3			121			231			191			40
Residential mortgage	54,486			56,131			51,721			3.88			3.78		3.60			2,114			2,121			1,860			(7)			55			(62)			261			96			165
Home equity	9,778			10,388			10,788			7.94			7.36		5.01			776			765			540			11			57			(46)			225			246			(21)
Indirect auto	22,326			25,621			27,197			7.00			6.10		5.50			1,563			1,563			1,497			—			215			(215)			66			156			(90)
Other consumer	28,748			28,412			26,320			8.18			7.25		6.23			2,351			2,061			1,640			290			265			25			421			284			137
Student	—			2,453			6,114			—			6.91		4.97			—			170			304			(170)			(85)			(85)			(134)			91			(225)
Credit card	4,907			4,876			4,753			11.96			11.59		9.57			587			565			455			22			18			4			110			98			12
Total loans and leases HFI	305,233			320,730			303,946			6.34			6.12		4.36			19,351			19,628			13,267			(277)			583			(860)			6,361			5,706			655
LHFS	1,305			1,605			2,889			6.31			6.37		4.23			82			102			122			(20)			(1)			(19)			(20)			47			(67)
Total loans and leases	306,538			322,335			306,835			6.34			6.12		4.36			19,433			19,730			13,389			(297)			582			(879)			6,341			5,753			588
Total earning assets	472,338			493,961			480,307			5.35			4.99		3.49			25,278			24,672			16,776			606			1,405			(799)			7,896			7,323			573
Nonearning assets	51,185			51,554			56,666
Assets of discontinued operations	2,542			7,617			6,857
Total assets	$	526,065			$	553,132			$	543,830
Liabilities and Shareholders’ Equity
Interest-bearing deposits:
Interest-checking	$	104,606			$	103,465			$	111,539			2.68		2.11			0.47			2,802			2,184			519			618			594			24			1,665			1,706			(41)
Money market and savings	136,217			138,841			145,645			2.54			2.04		0.37			3,457			2,834			536			623			677			(54)			2,298			2,324			(26)
Time deposits	39,406			36,803			15,514			4.04			3.83		0.58			1,590			1,409			90			181			79			102			1,319			1,059			260
Total interest-bearing deposits	280,229			279,109			272,698			2.80			2.30		0.42			7,849			6,427			1,145			1,422			1,350			72			5,282			5,089			193
Short-term borrowings	24,499			24,478			14,957			5.36			5.25		2.58			1,313			1,286			385			27			26			1			901			558			343
Long-term debt	36,713			49,678			34,172			4.94			4.46		2.31			1,813			2,215			791			(402)			220			(622)			1,424			958			466
Total interest-bearing liabilities	341,441			353,265			321,827			3.21			2.81		0.72			10,975			9,928			2,321			1,047			1,596			(549)			7,607			6,605			1,002
Noninterest-bearing deposits	107,639			122,018			145,392
Other liabilities	13,343			11,560			9,994
Liabilities of discontinued operations	1,049			3,190			2,800
Shareholders’ equity	62,593			63,099			63,817
Total liabilities and shareholders’ equity	$	526,065			$	553,132			$	543,830
Average interest-rate spread							2.14	%		2.18	%		2.77	%
NIM/net interest income - TE							3.03	%		2.98	%		3.01	%	$	14,303			$	14,744			$	14,455			$	(441)			$	(191)			$	(250)			$	289			$	718			$	(429)
Taxable-equivalent adjustment													$	212		$	220			$	142
Memo: Total deposits	$	387,868			$	401,127			$	418,090			2.02	%	1.60	%		0.27	%		$	7,849			$	6,427			$	1,145			$	1,422							$	5,282

(1)Represents daily average balances. Unrealized gains and losses on available-for-sale securities are included in nonearning assets. Active hedge basis adjustments for fair value hedges are included in nonearning assets and other liabilities. In 2024, Truist revised its presentation of active hedge basis adjustments for fair value hedges on securities to be included in nonearning assets for all periods presented.

(2)Yields are stated on a TE basis utilizing a federal tax rate of 21%. Interest income includes certain fees, deferred costs, and dividends. The change in interest not solely due to changes in rate or volume has been allocated based on the pro-rata absolute dollar amount of each.

(3)Includes cash equivalents, interest-bearing deposits with banks, FHLB stock, and other earning assets.

Truist Financial Corporation 51

Provision for Credit Losses

•The decrease in the current year provision expense primarily reflects a lower allowance build.

Refer to “Note 5. Loans and ACL” for additional discussion of the ACL.

Noninterest Income

Noninterest income is a significant contributor to Truist’s financial results. Management focuses on diversifying its sources of revenue to reduce Truist’s reliance on traditional spread-based interest income, as certain fee-based activities are a relatively stable revenue source during periods of changing interest rates. The following table provides a breakdown of Truist’s noninterest income:

Table 10: Noninterest Income
	Year Ended December 31,	% Change
(Dollars in millions)		2024		2023		2022		2024 vs. 2023	2023 vs. 2022
Wealth management income		$	1,412			$	1,358		$	1,338		4.0	%		1.5	%
Investment banking and trading income		1,203			822			995		46.4		(17.4)
Card and payment related fees		907			936			944		(3.1)		(0.8)
Service charges on deposits		915			873			1,028		4.8		(15.1)
Mortgage banking income		432			437			460		(1.1)		(5.0)
Lending related fees		366			447			375		(18.1)		19.2
Operating lease income		205			254			258		(19.3)		(1.6)
Securities gains (losses)		(6,651)			—			(71)		NM	NM
Other income		398			371			333		7.3		11.4
Total noninterest income		$	(813)			$	5,498		$	5,660		(114.8)		(2.9)

•Investment banking and trading income increased due to higher bond and equity originations, structured real estate income, loan syndication fees, and merger and acquisition fees, partially offset by lower trading income.

•Wealth management income increased due to higher assets under management, partially offset by the impact of the sale of Sterling Capital Management LLC in 2024.

•Service charges on deposits increased due to a prior period reduction in deposit service charge fees for client refund accruals resulting from a revision in deposit service fee protocols, partially offset by a decline as a result of continued growth of Truist One checking.

•Other income increased due to higher derivative income and the gain on the sale of Sterling Capital Management LLC, partially offset by lower equity investment income due to gains in 2023 and a valuation decrease for derivatives related to Visa shares.

•Lending related fees decreased due to lower leasing-related gains.

•Operating lease income decreased due to the runoff of operating lease balances.

•Card and payment related fees decreased due to lower interchange rates, higher rebates, and lower volumes.

52 Truist Financial Corporation

Noninterest Expense

The following table provides a breakdown of Truist’s noninterest expense:

Table 11: Noninterest Expense
	Year Ended December 31,	% Change
(Dollars in millions)		2024		2023		2022		2024 vs. 2023	2023 vs. 2022
Personnel expense		$	6,506			$	6,516		$	6,558		(0.2)	%	(0.6)	%
Professional fees and outside processing		1,337			1,192			1,322		12.2		(9.8)
Software expense		896			868			887		3.2		(2.1)
Net occupancy expense		656			658			690		(0.3)		(4.6)
Equipment expense		373			381			449		(2.1)		(15.1)
Amortization of intangibles		345			395			455		(12.7)		(13.2)
Marketing and customer development		268			260			321		3.1		(19.0)
Operating lease depreciation		144			175			184		(17.7)		(4.9)
Regulatory costs		344			824			183		(58.3)	NM
Restructuring charges		120			320			466		(62.5)		(31.3)
Goodwill impairment		—			6,078			—		(100.0)	NM
Other expense		1,020			1,011			652		0.9		55.1
Total noninterest expense		$	12,009			$	18,678		$	12,167		(35.7)		53.5

Restructuring Charges

•Other expense, excluding the aforementioned charitable contribution to the Truist Foundation, decreased primarily due to lower pension expense, the prior period costs associated with a revision in deposit service fee protocols, and the prior period resolution of the USAA remote deposit capture patent infringement lawsuit.

•Operating lease depreciation decreased due to the runoff of operating lease balances.

•Professional fees and outside processing expense increased due to higher investments in technology and risk infrastructure.

Truist has incurred certain restructuring charges, which include:

•severance and personnel-related costs or credits;

•occupancy and equipment charges or credits, which relate to costs or gains associated with lease terminations, obsolete equipment write-offs, and the sale of duplicate facilities and equipment;

•professional services, which relate to legal and investment banking advisory fees and other consulting services pertaining to restructuring initiatives or transactions; and

•write-offs related to exiting certain businesses.

Restructuring accruals are established when the costs are incurred or once all requirements for a plan to dispose of or outsource certain business functions have been approved by management. Restructuring accruals are re-evaluated periodically and adjusted as necessary. The remaining accruals at December 31, 2024 are generally expected to be utilized within one year, unless they relate to specific contracts that expire later.

Truist Financial Corporation 53

The following table presents a summary of restructuring charges and the related accruals. The 2024 and 2023 restructuring charges predominantly include costs for severance and other benefits and costs related to exiting facilities.

Table 12: Restructuring Accrual Activity
(Dollars in millions)	Accrual at Jan 1, 2023		Expense		Utilized		Accrual at Dec 31, 2023			Expense	Utilized		Accrual at Dec 31, 2024
Severance and personnel-related	$	6			$	249		$	(247)		$	8			$	80		$	(88)	$	—
Occupancy and equipment	—			52			(52)		—				31	(31)			—
Professional services	11			2			(13)		—				6	(5)			1
Other	2			17			(19)		—				3	(3)			—
Total	$	19			$	320		$	(331)		$	8			$	120		$	(127)	$	1

Segment Results

Truist operates and measures business activity across two segments: CSBB and WB, with functional activities included in OT&C. The Company’s business segment structure is based on the manner in which financial information is evaluated by management as well as the products and services provided or the type of client served.

On February 20, 2024, the Company entered into an agreement to sell the remaining stake of the common equity in TIH to an investor group, representing substantially all of the Company’s IH segment, which represented a material strategic shift for the Company, and as a result, the Company recast results for all periods presented under the discontinued operations basis of presentation. On May 6, 2024, the Company completed the sale of its remaining equity interests in TIH. TIH was the principal legal entity of the IH segment. As the operations of TIH were included in discontinued operations prior to the sale of TIH, the Company no longer presents the IH segment as one of its reportable segments. Refer to “Note 2. Discontinued Operations” for additional information related to discontinued operations.

Effective October 1, 2024, the Company’s corporate expense allocation methodology was enhanced to allocate certain overhead or functional expenses based on actual OT&C noninterest expense performance. Prior period results have been revised for the CSBB, WB, and OT&C segments to conform to the current allocation methodology.

As a result of the methodology change, CSBB noninterest expense increased $267 million and $639 million for the years ended December 31, 2023 and 2022, respectively, with an off-setting decrease in OT&C noninterest expense. For the same reason, WB noninterest expense increased $325 million and $101 million for the years ended December 31, 2023 and 2022, respectively, with an off-setting decrease in OT&C noninterest expense.

Table 13: Net Income from Continuing Operations by Reportable Segment
	Year Ended December 31,			% Change
(Dollars in millions)		2024		2023		2022					2024 vs. 2023	2023 vs. 2022
Consumer and Small Business Banking		$	3,490			$	126		$	3,228					NM	(96.1)	%
Wholesale Banking		3,984			346			4,446					NM	(92.2)
Other, Treasury & Corporate		(7,519)			(1,975)			(1,895)					NM	4.2
Truist Financial Corporation		$	(45)			$	(1,503)		$	5,779					(97.0)		(126.0)

54 Truist Financial Corporation

2024 compared to 2023

Consumer and Small Business Banking

CSBB net income was $3.5 billion for the year ended December 31, 2024, an increase of $3.4 billion compared to the prior year.

•Segment net interest income decreased $106 million primarily driven by lower loan and deposit balances, partially offset by higher funding credit on deposits.

•The allocated provision for credit losses increased $192 million primarily reflecting higher charge-offs in the other consumer, credit card, and indirect auto portfolios and an allowance build in the current period compared to same period last year.

•Noninterest income increased $30 million primarily due to increased service charges on deposits, partially offset by lower card and payment related fees in the current period.

•Noninterest expense decreased $3.6 billion including the goodwill impairment in the prior year. Excluding the goodwill impairment, noninterest expense decreased $271 million due to lower personnel expenses, FDIC assessment cost, restructuring charges, pension costs, and technology project costs, as well as lower foreclosed property expense, partially offset by higher enterprise operations, marketing, and finance support expenses.

CSBB average loans and leases held for investment decreased $8.0 billion, or 6.0%, for the year ended December 31, 2024 compared to the prior year driven primarily by a decrease in indirect auto loans, the sale of the student loan portfolio in the second quarter of 2023, and lower mortgage loan balances as well as a decrease in LightStream loans and home equity lending, partially offset by increases in Service Finance and Sheffield loans.

CSBB average total deposits decreased $7.3 billion, or 3.3%, for the year ended December 31, 2024 compared to the prior year primarily due to decreases in average interest-bearing checking, noninterest-bearing deposits, and money market and savings, partially offset by an increase in time deposits.

Wholesale Banking

WB net income was $4.0 billion for the year ended December 31, 2024, an increase of $3.6 billion compared to the prior year.

•Segment net interest income decreased $354 million primarily due to lower deposit and loan balances combined with higher cost of deposits and lower loan yields, partially offset by higher funding credit on deposits.

•The allocated provision for credit losses decreased $437 million, which primarily reflects a decrease in the allowance build compared to the earlier period, partially offset by an increase in net charge-offs.

•Noninterest income increased $451 million primarily due to increases in investment banking income across all products, income from tax credit activity, and wealth management related income, partially offset by lower lending related fees, operating lease income, and income from strategic investments.

•Noninterest expense decreased $3.4 billion including the goodwill impairment in the prior year. Excluding the goodwill impairment, noninterest expense decreased $654 million primarily due to lower FDIC assessment cost, restructuring expense, pension costs, and personnel expenses as well as lower marketing and finance support expenses.

WB average loans and leases held for investment decreased $7.5 billion, or 4.0%, for the year ended December 31, 2024 compared to the prior year driven by decreases in the commercial and industrial portfolio.

WB average total deposits decreased $6.4 billion, or 4.3%, for the year ended December 31, 2024 compared to the prior year primarily due to decreases in average noninterest-bearing deposits and money market and savings, partially offset by an increase in interest-bearing checking balances.

Other, Treasury, and Corporate

OT&C generated a net loss of $7.5 billion for the year ended December 31, 2024, compared to a net loss of $2.0 billion in the prior year.

•Segment net interest income increased $27 million due to funding charges primarily on loans to other segments, the balance sheet repositioning, and lower average long-term debt, partially offset by the funding credit on deposits to other segments.

•Noninterest income decreased $6.8 billion primarily due to securities losses resulting from the balance sheet repositioning.

•Noninterest expense increased $334 million primarily driven by higher incentive expense, higher donations and contributions expense due to a charitable contribution to the Truist Foundation, and increased professional fees and outside processing expense, partially offset by lower pension costs and increased credit from other segments for enterprise operations.

Truist Financial Corporation 55

Analysis of Financial Condition

Investment Activities

Truist’s investment policy is approved and carried out by ALCO, which meets regularly to review the economic environment and establish investment strategies. The ALCO also has much broader responsibilities, which are discussed in the “Market Risk” section in MD&A.

Investment strategies are reviewed by the ALCO based on the interest rate environment, balance sheet mix, actual and anticipated loan demand, funding opportunities, and the overall interest rate sensitivity of the Company. In general, the goals of the investment portfolio are: (i) to provide sufficient liquid assets to meet unanticipated deposit and loan fluctuations and overall corporate treasury objectives; (ii) to provide eligible securities to secure public funds, trust deposits, and other borrowings; and (iii) to earn an optimal return on funds invested commensurate with meeting regulatory requirements, consistent with the Company’s risk appetite.

Truist Bank invests in securities allowable under bank regulations. These securities may include obligations of the U.S. Treasury, U.S. government agencies, GSEs (including MBS), bank eligible obligations of any state or political subdivision, non-agency MBS, structured notes, bank eligible corporate obligations (including corporate debentures), commercial paper, negotiable CDs, bankers’ acceptances, mutual funds, and limited types of equity securities.

Table 14: Composition of Securities Portfolio
(Dollars in millions)	Dec 31, 2024		Dec 31, 2023
AFS securities (at fair value):
U.S. Treasury	$	14,411			$	10,041
GSE	403			362
Agency MBS – residential	49,959			51,289
Agency MBS – commercial	2,293			2,248
States and political subdivisions	382			425
Non-agency MBS	—			2,981
Other	16			20
Total AFS securities	67,464			67,366
HTM securities (at amortized cost):
Agency MBS – residential	50,640			54,107
Total securities	$	118,104			$	121,473

The securities portfolio totaled $118.1 billion at December 31, 2024, compared to $121.5 billion at December 31, 2023. U.S. Treasury, GSE, and Agency MBS represented 99.7% and 97.2% of the total securities portfolio as of December 31, 2024 and December 31, 2023, respectively. The overwhelming majority of the portfolio is in agency MBS securities.

•The decrease in 2024 includes sales of $28.1 billion and maturities and paydowns of $18.7 billion, partially offset by $44.7 billion in purchases. The purchases and sales were primarily related to the balance sheet repositioning.

◦Following the sale of TIH, which resulted in after-tax cash proceeds to Truist of approximately $10.1 billion, Truist executed a strategic balance sheet repositioning of a portion of its AFS investment securities portfolio by selling $27.7 billion of lower-yielding investment securities, resulting in an after-tax loss of $5.1 billion in the second quarter of 2024. The investment securities that were sold had a book value of $34.4 billion and a weighted average book yield of 2.80% for the remainder of 2024 including the impact of hedges and based on the Federal Funds futures curve at the time. Including the tax benefit, the repositioning generated $29.3 billion available for reinvestment.

◦Truist invested approximately $18.7 billion of the $39.4 billion available, including the $10.1 billion after-tax proceeds from the sale of TIH, in shorter duration investment securities yielding 5.27%. The remaining $20.7 billion was invested in cash. The blended reinvestment rate on the new investment securities purchased and cash was 5.22% for the remainder of 2024 including the impact of hedges and based on the Federal Funds futures curve at the time.

•As of December 31, 2024 and December 31, 2023, 41% of the investment securities portfolio was classified as held-to-maturity based on amortized cost, excluding portfolio level basis adjustments.

•As of December 31, 2024, approximately 3.0% of the securities portfolio was variable rate, excluding the impact of swaps, compared to 5.7% as of December 31, 2023.

•The effective duration of the AFS securities portfolio was 5.0 years at December 31, 2024 and 6.1 years at December 31, 2023, excluding the impact of swaps, or 3.3 years at December 31, 2024 and 4.0 years at December 31, 2023, including the impact of swaps. The effective duration of the HTM securities portfolio was 7.0 years at December 31, 2024 and 7.3 years at December 31, 2023.

56 Truist Financial Corporation

The following table presents the securities portfolio by major category of security holdings with ranges of maturities and average yields:

Table 15: Securities Yields by Major Category and Maturity
December 31, 2024 (Dollars in millions)	AFS		HTM
Fair Value		Effective Yield(1)		Amortized Cost		Effective Yield(1)
U.S. Treasury:
Within one year	$	4,512			4.84	%		$	—		—	%
One to five years	9,480			4.45			—			—
Five to ten years	397			3.60			—			—
After ten years	22			3.02			—			—
Total	14,411			4.55			—			—
GSE:
Within one year	2			3.00			—			—
One to five years	5			2.88			—			—
Five to ten years	11			3.05			—			—
After ten years	385			3.78			—			—
Total	403			3.74			—			—
Agency MBS – residential:(2)
One to five years	88			2.44			—			—
Five to ten years	365			2.88			—			—
After ten years	49,506			3.90			50,640			1.79
Total	49,959			3.89			50,640			1.79
Agency MBS – commercial:(2)
Within one year	—			—			—			—
One to five years	9			4.40			—			—
Five to ten years	78			3.69			—			—
After ten years	2,206			1.99			—			—
Total	2,293			2.05			—			—
States and political subdivisions:
Within one year	41			6.80			—			—
One to five years	68			6.84			—			—
Five to ten years	146			6.60			—			—
After ten years	127			5.45			—			—
Total	382			6.28			—			—
Other:
One to five years	7			2.87			—			—
Five to ten years	9			6.51			—			—
Total	16			4.88			—			—
Total securities	$	67,464			3.98			$	50,640		1.79

(1)Yields represent interest computed using the effective interest method on the amortized cost of securities inclusive of amortization of premiums or accretion of discounts, excluding the impact of hedging. Weighted yield is represented on a TE basis with the exception of obligations of state and political subdivisions which are presented on a tax-effected basis.

(2)For purposes of the maturity, MBS, which are not due at a single maturity date, have been included in maturity groupings based on the contractual maturity. The expected life of MBS will differ from contractual maturities because borrowers may have the right to call or prepay the underlying mortgage loans with or without call or prepayment penalties.

Lending Activities

Truist strives to meet the credit needs of its clients while pursuing a balanced strategy of loan profitability, loan growth, and loan quality. Management believes that this purpose can best be accomplished by building strong client relationships over time and developing in-depth local market knowledge. The Company employs underwriting criteria governing the degree of risk assumed and the diversity of the loan portfolio in terms of type, industry, and geographical concentration.

Truist lends to a diverse client base that is managed to be geographically dispersed to mitigate concentration risk arising from local and regional economic downturns. The following discussion provides additional information on the Company’s loan and lease portfolios. Refer to the “Risk Management” section for a discussion of the credit risk management policies used to manage the portfolios.

Truist Financial Corporation 57

Commercial Loan and Lease Portfolio

Commercial loans and leases represent the largest category of the Company’s loan and lease portfolio. Commercial Community Banking and small business banking generally target small-to-middle market businesses with annual sales between $2 million and $500 million, while Investment Banking and Capital Markets (formerly Corporate and Investment Banking) provides lending solutions to large corporate clients. The commercial loan and lease portfolio consists of lending to public and private business clients and includes commercial and industrial, owner occupied, equipment leasing and financing, CRE, government and institutional financing, premium financing, and dealer floor plan financing.

In accordance with the Company’s lending policy, each commercial loan undergoes a detailed underwriting process. Commercial loans are typically priced with an interest rate tied to market indices, such as the prime rate or SOFR and are individually monitored and reviewed for deterioration in the ability of the client to repay the loan. The majority of Truist’s commercial loans are secured by real estate, business equipment, inventories, and other types of collateral.

Residential Mortgage Loan Portfolio

Truist primarily originates conforming mortgage loans, loans under FHA, U.S. Department of Veterans Affairs, or U.S. Department of Agriculture programs, and higher quality jumbo and construction-to-permanent loans for 1-4 family residential properties. Conforming loans are loans that are underwritten in accordance with the underwriting standards set forth by FNMA and FHLMC. They are generally collateralized by one-to-four-family residential real estate, typically have loan-to-collateral value ratios of 80% or less at origination, or have mortgage insurance as required by investors and are made to borrowers that meet Truist’s credit standards.

Risks associated with mortgage lending include interest rate risk, which is mitigated through the sale of a substantial portion of conforming fixed-rate loans in the secondary mortgage market and an effective MSR hedging process. Credit risk is managed through underwriting procedures and mortgage insurance. The right to service the loans and receive servicing income is generally retained when conforming loans are sold. Management believes that the retention of mortgage servicing diversifies income while enabling Truist to build long-term client relationships and offer high quality client service. Truist also purchases residential mortgage loans from correspondent originators. The loans purchased from third-party originators are subject to substantially the same underwriting and risk-management criteria as loans originated internally.

Home Equity Loan Portfolio

The home equity portfolio is composed of loans offered through Truist’s branch network. These include home equity loans and revolving home equity lines of credit secured by first or second liens on residential real estate in Truist’s market areas.

Indirect Auto Loan Portfolio

The indirect auto portfolio primarily includes secured indirect installment loans to consumers for the purchase of new and used automobiles. The indirect auto portfolio also includes nonprime and near prime automobile finance. Such loans are originated through approved franchised and independent dealers throughout the Truist market area and nationally through Regional Acceptance Corporation. These loans are homogeneous, and no single loan is individually significant in terms of its size and potential risk of loss. Indirect auto loans are subject to lending policies and procedures and are underwritten with note amounts and credit limits that are consistent with the Company’s risk philosophy. In addition to its normal underwriting due diligence, Truist uses application systems and scoring systems to help underwrite and manage the credit risk in its indirect auto portfolio.

Other Consumer Loan Portfolio

The other consumer portfolio includes loans originated through the Truist branch network, as well as loans originated by Truist’s national online consumer lending platforms. The other consumer loan portfolio includes: secured and unsecured loans originated through the Truist branch network marketed to qualifying clients and other creditworthy candidates in Truist’s market areas; LightStream, an online platform which originates fixed-rate, unsecured lending to consumers with strong credit; secured indirect installment loans to consumers for the purchase of new and used boats and recreational vehicles; Sheffield, a small ticket consumer lending division related to the purchase of power sports and outdoor power equipment; other indirect and point-of-sale lending to consumers, including through Service Finance, to finance home improvements, furniture purchases, certain elective health-care services; and unsecured loans originated via third-party partnerships, which are in run-off. These loans are homogeneous, and no single loan is individually significant in terms of its size and potential risk of loss. These loans are originated in accordance with underwriting criteria as determined by Truist.

58 Truist Financial Corporation

Credit Card Loan Portfolio

The credit card portfolio consists of the outstanding balances on credit cards for commercial and consumer clients. Truist markets credit cards to its existing client base and does not solicit cardholders through nationwide programs or other forms of mass marketing. Such balances are generally unsecured and actively managed.

Refer to “Note 5. Loans and ACL” for additional information.

The following table summarizes the loan portfolio:

Table 16: Loans and Leases as of Period End
(Dollars in millions)	Dec 31, 2024		Dec 31, 2023
Commercial:
Commercial and industrial	$	154,848			$	160,788
CRE	20,363			22,570
Commercial construction	8,520			6,683
Consumer:
Residential mortgage	55,599			55,492
Home equity	9,642			10,053
Indirect auto	23,089			22,727
Other consumer	29,395			28,647
Credit card	4,927			5,101
Total loans and leases HFI	306,383			312,061
LHFS	1,388			1,280
Total loans and leases	$	307,771			$	313,341

Loans and leases HFI were $306.4 billion at December 31, 2024, down $5.7 billion compared to 2023.

Commercial loans decreased $6.3 billion during 2024 primarily due to declines of $5.9 billion in the commercial and industrial portfolio and $2.2 billion in the CRE portfolio due to lower production, partially offset by an increase in the commercial construction portfolio of $1.8 billion.

Consumer loans and credit cards increased $632 million during 2024 primarily due to a $748 million increase in other consumer primarily due to growth of higher-return point-of-sale lending portfolios (Service Finance and Sheffield), and a $362 million increase in indirect auto primarily due to higher production, partially offset by a $411 million decrease in home equity.

Truist Financial Corporation 59

The following table presents a summary of the loans and leases by scheduled repayment period and interest rate terms. Determinations of maturities are based on scheduled repayments, except when rollovers or extensions are included for purposes of measuring the ACL. Truist’s credit policy typically does not permit automatic renewal of loans. At the scheduled maturity date (including balloon payment date), the client generally must request a new loan to replace the matured loan and execute either a new note or note modification with rate, terms, and conditions negotiated at that time.

Table 17: Loan Maturities
December 31, 2024 (Dollars in millions)	1 Year or Less		1 to 5 Years		5 to 15 Years		After 15 Years	Total
Fixed rate:
Commercial:
Commercial and industrial	$	11,084			$	14,377		$	10,589	$	2,111	$	38,161
CRE	858			2,161			401		3	3,423
Commercial construction	19			42			22		38	121
Total commercial	11,961			16,580			11,012		2,152	41,705
Consumer:
Residential mortgage	1,560			6,276			17,113		23,743	48,692
Home equity	313			956			1,604		409	3,282
Indirect auto	5,514			15,958			1,617		—	23,089
Other consumer	5,580			13,784			6,611		857	26,832
Total consumer	12,967			36,974			26,945		25,009	101,895
Credit card	266			—			—		—	266
Total fixed rate	25,194			53,554			37,957		27,161	143,866
Variable rate:
Commercial:
Commercial and industrial	32,888			73,617			8,234		1,948	116,687
CRE	5,139			10,982			813		6	16,940
Commercial construction	3,321			4,956			121		1	8,399
Total commercial	41,348			89,555			9,168		1,955	142,026
Consumer:
Residential mortgage	175			776			2,348		3,608	6,907
Home equity	623			2,261			3,459		17	6,360
Indirect auto	—			—			—		—	—
Other consumer	396			1,813			351		3	2,563
Total consumer	1,194			4,850			6,158		3,628	15,830
Credit card	4,661			—			—		—	4,661
Total variable rate	47,203			94,405			15,326		5,583	162,517
Total loans and leases HFI	$	72,397			$	147,959		$	53,283	$	32,744	$	306,383

Certain residential mortgage loans have an initial period where the borrower is only required to pay the periodic interest. After the interest-only period, the loan will require the payment of both interest and principal over the remaining term. The outstanding balances of variable rate residential mortgage loans in the interest-only phase were approximately $647 million and $317 million at December 31, 2024 and December 31, 2023, respectively.

60 Truist Financial Corporation

The following table presents the composition of average loans and leases:

Table 18: Average Loans and Leases
	Three Months Ended
(Dollars in millions)	Dec 31, 2024		Sep 30, 2024		Jun 30, 2024		Mar 31, 2024	Dec 31, 2023
Commercial:
Commercial and industrial	$	153,209			$	154,102		$	157,043	$	158,385	$	160,278
CRE	20,504			21,481			21,969		22,400	22,755
Commercial construction	8,261			7,870			7,645		7,134	6,515
Consumer:
Residential mortgage	54,390			53,999			54,490		55,070	55,658
Home equity	9,675			9,703			9,805		9,930	10,104
Indirect auto	22,790			22,121			22,016		22,374	23,368
Other consumer	29,355			29,015			28,326		28,285	28,913
Credit card	4,926			4,874			4,905		4,923	4,996
Total average loans and leases HFI	$	303,110			$	303,165		$	306,199	$	308,501	$	312,587

Average loans and leases HFI were flat compared to the prior quarter.

•Average commercial loans decreased 0.8% due to declines in the commercial and industrial and CRE portfolios.

•Average consumer loans and credit cards increased 1.2% due to growth in the indirect auto, residential mortgage, and other consumer portfolios.

Truist Financial Corporation 61

Asset Quality

The following tables summarize asset quality information:

Table 19: Asset Quality
(Dollars in millions)	Dec 31, 2024		Dec 31, 2023
NPAs:
NPLs:
Commercial and industrial	$	521			$	470
CRE	298			284
Commercial construction	3			24
Residential mortgage	166			153
Home equity	116			122
Indirect auto	259			268
Other consumer	66			59
Total NPLs HFI	1,429			1,380
Loans held for sale	—			51
Total nonperforming loans and leases	1,429			1,431
Foreclosed real estate	3			3
Other foreclosed property	45			54
Total nonperforming assets	$	1,477			$	1,488
Loans 90 days or more past due and still accruing:
Commercial and industrial	$	19			$	7
CRE	1			—
Commercial construction	—			1
Residential mortgage – government guaranteed	430			418
Residential mortgage – nonguaranteed	51			21
Home equity	9			11
Indirect auto	—			2
Other consumer	23			21
Credit card	54			53
Total loans 90 days or more past due and still accruing	$	587			$	534
Loans 30-89 days past due and still accruing:
Commercial and industrial	$	168			$	230
CRE	60			5
Commercial construction	3			—
Residential mortgage – government guaranteed	318			326
Residential mortgage – nonguaranteed	401			313
Home equity	60			70
Indirect auto	622			669
Other consumer	236			271
Credit card	81			87
Total loans 30-89 days past due and still accruing	$	1,949			$	1,971

Nonperforming assets totaled $1.5 billion at December 31, 2024, down $11 million compared to December 31, 2023 due to a decline in the LHFS portfolio, partially offset by an increase in the commercial and industrial portfolio. Nonperforming loans and leases represented 0.47% of total loans and leases HFI, up three basis points compared to December 31, 2023.

Loans 90 days or more past due and still accruing totaled $587 million at December 31, 2024, up $53 million compared to the prior year primarily due to an increase in the residential mortgage portfolio. Excluding government guaranteed loans, the ratio of loans 90 days or more past due and still accruing as a percentage of loans and leases HFI was 0.05% at December 31, 2024, up one basis point compared to December 31, 2023.

Loans 30-89 days past due and still accruing totaled $1.9 billion at December 31, 2024, down $22 million compared to the prior year due to declines in the commercial and industrial, indirect auto, and other consumer portfolios, partially offset by increases in the residential mortgage and CRE portfolios. The ratio of loans 30-89 days or more past due and still accruing as a percentage of loans and leases HFI was 0.64% at December 31, 2024, up one basis point compared to the prior year.

62 Truist Financial Corporation

Problem loans include NPLs and loans that are 90 days or more past due and still accruing as disclosed in Table 19. In addition, for the commercial portfolio segment, loans that are rated special mention or substandard performing are closely monitored by management as potential problem loans. Refer to “Note 5. Loans and ACL” for the amortized cost basis of loans by origination year and credit quality indicator as well as additional disclosures related to NPLs.

Table 20: Asset Quality Ratios
	Dec 31, 2024		Dec 31, 2023
Loans 30-89 days past due and still accruing as a percentage of loans and leases HFI	0.64	%		0.63	%
Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI	0.19			0.17
NPLs as a percentage of loans and leases HFI	0.47			0.44
NPLs as a percentage of total loans and leases(1)	0.46			0.46
NPAs as a percentage of:
Total assets(1)	0.28			0.28
Loans and leases HFI plus foreclosed property	0.48			0.46
ALLL as a percentage of loans and leases HFI	1.59			1.54
Ratio of ALLL to NPLs	3.4x		3.5x
Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI, excluding government guaranteed(2)	0.05	%		0.04	%

(1)Includes LHFS.

(2)This asset quality ratio has been adjusted to remove the impact of government guaranteed loans. Management believes the inclusion of such assets in this asset quality ratio results in distortion of this ratio because collection of principal and interest is reasonably assured, or the ratio might not be comparable to other periods presented or to other portfolios that do not have government guarantees.

Table 21: Asset Quality Ratios (Continued)
	Year Ended December 31,
		2024		2023		2022
Net charge-offs as a percentage of average loans and leases HFI:
Commercial:
Commercial and industrial		0.20	%		0.20	%	0.04	%
CRE		1.31			0.71		0.02
Commercial construction		(0.03)			0.04		(0.07)
Consumer:
Residential mortgage		(0.01)			0.01		(0.01)
Home equity		(0.07)			(0.12)		(0.11)
Indirect auto		2.11			1.66		1.17
Other consumer		1.73			1.40		1.14
Student		—			4.39		0.34
Credit card		5.26			3.85		2.98
Total		0.59			0.50		0.27
Ratio of ALLL to net charge-offs		2.7x		3.0x		5.3x

The following table presents activity related to NPAs:

Table 22: Rollforward of NPAs
(Dollars in millions)	2024		2023
Balance, January 1	$	1,488			$	1,250
New NPAs	3,331			3,055
Advances and principal increases	454			842
Disposals of foreclosed assets(1)	(616)			(603)
Disposals of NPLs(2)	(223)			(237)
Charge-offs and losses	(1,313)			(1,013)
Payments	(1,308)			(1,357)
Transfers to performing status	(309)			(440)
Other, net	(27)			(9)
Ending balance, December 31	$	1,477			$	1,488

(1)Includes charge-offs and losses recorded upon sale of $260 million and $196 million for the years ended December 31, 2024 and 2023, respectively.

(2)Includes gains, net of charge-offs and losses recorded upon sale of $14 million for the year ended December 31, 2024, and charge-offs and losses recorded upon sale of $30 million for the year ended December 31, 2023.

Truist Financial Corporation 63

Commercial Credit Concentrations

Truist has established the following general practices to manage commercial credit risk:

•limiting the amount of credit that Truist may extend to a borrower;

•establishing a process for credit approval accountability;

•initial underwriting and analysis of borrower, transaction, market, and collateral risks;

•evaluating the diversity of the loan portfolio in terms of type, industry, and geographical concentration;

•ongoing servicing and monitoring of individual loans and lending relationships;

•continuous monitoring of the portfolio, market dynamics, and the economy; and

•periodically reevaluating the Company’s strategy and overall exposure as economic, market, and other relevant conditions change.

Truist monitors various segments of its credit portfolios to assess potential concentration risks. Management is involved in the credit approval and review process, and risk acceptance criteria are adjusted as needed to reflect the Company’s risk appetite. Consistent with established risk management objectives, the Company utilizes various risk mitigation techniques, including collecting collateral and security interests, obtaining guarantees, and, to a limited extent, through the purchase of credit loss protection via third-party insurance or use of credit derivatives such as credit default swaps.

In the commercial portfolio, risk concentrations are evaluated regularly on both an aggregate portfolio level and on an individual client basis. The Company manages its commercial exposure through portfolio targets, limits, and transactional risk acceptance criteria as well as other techniques, including loan syndications/participations, loan sales, collateral, structure, covenants, and other risk reduction techniques.

The following tables provide industry distribution by major types of commercial credit exposure and the geographical distribution of commercial exposures. Industry classification for commercial and industrial loans is based on the North American Industry Classification System. CRE loans are classified based on type of property. For the geographic disclosures, amounts are generally assigned to a state based on the physical billing address of the client or physical property address.

64 Truist Financial Corporation

Table 23: Commercial and Industrial Portfolio Industry and Geography
	December 31, 2024				December 31, 2023
(Dollars in millions)	LHFI		% of Total				NPL			LHFI	% of Total					NPL
Industry:(1)
Finance and insurance	$	24,271			15.7	%			$	28			$	21,929	13.6	%		$	40
Retail trade	12,488			8.1				66				12,368		7.7			89
Manufacturing	12,298			7.9				62				14,090		8.8			65
Health care and social assistance	12,154			7.8				129				13,078		8.1			46
Real estate and rental and leasing	11,354			7.3				3				11,001		6.8			16
Public administration	8,860			5.7				—				9,280		5.8			—
Wholesale trade	7,428			4.8				45				7,471		4.6			3
Information	5,235			3.4				66				5,727		3.6			—
Transportation and warehousing	4,634			3.0				34				5,707		3.5			8
Educational services	4,478			2.9				—				5,362		3.3			31
Professional, scientific, and technical services	4,125			2.7				8				4,445		2.8			26
Utilities	4,096			2.6				—				4,577		2.8			—
Arts, entertainment, and recreation	3,599			2.3				6				3,250		2.0			—
Other services (except public administration)	3,072			2.0				2				3,308		2.1			1
Administrative and support and waste management and remediation services	3,022			2.0				—				3,652		2.3			49
Accommodation and food services	2,935			1.9				9				2,925		1.8			13
Other(2)	11,746			7.6				31				11,913		7.5			41
Subtotal	135,795			87.7				489				140,083		87.1			428
Business owner occupied	19,053			12.3				32				20,705		12.9			42
Total commercial and industrial	$	154,848			100.0	%			$	521			$	160,788	100.0	%		$	470
Geography:
Florida	$	18,258			11.8	%			$	172			$	18,947	11.8	%		$	228
Texas	14,728			9.5				47				15,374		9.6			24
North Carolina	12,167			7.9				16				12,959		8.1			11
New York	11,379			7.3				50				10,336		6.4			3
Georgia	11,240			7.3				10				12,167		7.6			32
Virginia	9,343			6.0				7				9,724		6.0			35
California	8,115			5.2				8				9,115		5.7			1
Maryland	6,781			4.4				3				6,668		4.1			6
Pennsylvania	6,466			4.2				9				7,423		4.6			4
Tennessee	5,729			3.7				51				5,852		3.6			43
South Carolina	4,151			2.7				23				4,134		2.6			1
New Jersey	3,947			2.5				5				3,754		2.3			36
Illinois	3,639			2.4				20				3,892		2.4			10
Ohio	3,482			2.2				1				3,220		2.0			6
Other(3)	35,423			22.9				99				37,223		23.2			30
Total commercial and industrial	$	154,848			100.0	%			$	521			$	160,788	100.0	%		$	470

(1)The Company adjusted certain NAICS code assignments in connection with the implementation of new guidance related to non-depository financial institutions. This change primarily impacted the industry assignment related to asset securitization facilities and family office obligations. Prior periods were reclassified to conform to the current presentation.

(2)Represents other remaining industries that are deemed to be individually insignificant.

(3)Includes non-U.S. loans of $4.1 billion and $5.1 billion at December 31, 2024 and December 31, 2023, respectively. The remainder represents other remaining states that are deemed to be individually insignificant.

Truist has noted that the CRE and commercial construction portfolios have the potential for heightened risk in the current environment. Truist seeks to maintain a high-quality portfolio through disciplined risk management and prudent client selection.

Truist’s CRE and commercial construction portfolios totaled $28.9 billion as of December 31, 2024, which includes 36% related to multifamily residential, 21% related to industrial, 14% related to office, 13% related to retail, and the remainder composed of hotel and other commercial real estate.

Truist Financial Corporation 65

Our combined CRE and commercial construction office portfolio is primarily composed of multi-tenant, non-gateway properties located within Truist Bank’s footprint. As of December 31, 2024, approximately 97% of these properties are multi-tenant or medical. Additionally, as of December 31, 2024, 34% and 19% of these exposures are scheduled to mature in 2025 and 2026, respectively, with the remainder scheduled to mature in 2027 and beyond.

Table 24: CRE Portfolio Property Type and Geography
	December 31, 2024		December 31, 2023
(Dollars in millions)	LHFI		% of Total				NPL			LHFI	% of Total					NPL
Industry:
Multifamily	$	5,508			27.0	%			$	27			$	5,731	25.4	%		$	3
Industrial	4,303			21.1				3				4,054		18.0			3
Retail	3,530			17.3				33				4,172		18.5			9
Office	3,459			17.0				228				4,286		19.0			264
Hotel	1,891			9.3				—				2,445		10.8			—
Other(1)	1,672			8.3				7				1,882		8.3			5
Total CRE	$	20,363			100.0	%			$	298			$	22,570	100.0	%		$	284
Geography:
Florida	$	2,594			12.7	%			$	26			$	2,481	11.0	%		$	5
North Carolina	2,212			10.9				10				2,726		12.1			1
Georgia	2,010			9.9				80				2,532		11.2			120
California	1,683			8.3				—				1,709		7.6			81
Texas	1,599			7.9				6				1,611		7.1			—
New York	1,491			7.3				2				1,574		7.0			3
Pennsylvania	1,218			6.0				1				1,403		6.2			—
Virginia	1,108			5.4				3				1,276		5.7			—
Massachusetts	860			4.2				27				698		3.1			—
District of Columbia	827			4.1				45				1,043		4.6			—
Tennessee	715			3.5				1				810		3.6			1
Other(2)	4,046			19.8				97				4,707		20.8			73
Total CRE	$	20,363			100.0	%			$	298			$	22,570	100.0	%		$	284

(1)Represents other remaining property types that are deemed to be individually insignificant.

(2)Includes non-U.S. loans of $54 million and $73 million at December 31, 2024 and December 31, 2023, respectively. The remainder represents other remaining states that are deemed to be individually insignificant.

Table 25: Commercial Construction Portfolio Property Type and Geography
	December 31, 2024		December 31, 2023
(Dollars in millions)	LHFI		% of Total				NPL			LHFI	% of Total					NPL
Industry:
Multifamily	$	4,918			57.7	%			$	—			$	3,868	57.9	%		$	23
Industrial	1,680			19.7				—				877		13.1			—
Single Family - CP	664			7.8				2				819		12.3			—
Office	627			7.4				—				634		9.5			1
Single Family - AD and CL	187			2.2				1				196		2.9			—
Other(1)	444			5.2				—				289		4.3			—
Total commercial construction	$	8,520			100.0	%			$	3			$	6,683	100.0	%		$	24
Geography:
Texas	$	1,345			15.8				$	—			$	956	14.3			$	23
Georgia	1,294			15.2				—				1,059		15.8			—
Florida	1,138			13.4				—				741		11.1			—
North Carolina	992			11.6				1				777		11.6			—
California	492			5.8				—				512		7.7			—
Other(2)	3,259			38.2				2				2,638		39.5			1
Total commercial construction	$	8,520			100.0	%			$	3			$	6,683	100.0	%		$	24

(1)Represents other remaining property types that are deemed to be individually insignificant.

(2)Includes an immaterial amount of non-U.S. loans at December 31, 2024 and $16 million at December 31, 2023. The remainder represents other remaining states that are deemed to be individually insignificant.

See additional information on the commercial portfolios in “Note 5. Loans and ACL,” including loans by origination year and credit quality indicator.

66 Truist Financial Corporation

ACL

Activity related to the ACL is presented in the following tables:

Table 26: Activity in ACL
	Year Ended December 31,
(Dollars in millions)		2024		2023		2022
Balance, beginning of period(1)		$	5,093			$	4,649		$	4,695
Provision for credit losses		1,870			2,109			777
Charge-offs:
Commercial and industrial		(395)			(390)			(143)
CRE		(316)			(166)			(13)
Commercial construction		—			(5)			(1)
Residential mortgage		(3)			(10)			(9)
Home equity		(9)			(10)			(13)
Indirect auto		(591)			(531)			(411)
Other consumer		(606)			(477)			(381)
Student		—			(108)			(22)
Credit card		(296)			(223)			(176)
Total charge-offs		(2,216)			(1,920)			(1,169)
Recoveries:
Commercial and industrial		87			70			87
CRE		34			3			8
Commercial construction		2			3			5
Residential mortgage		6			6			16
Home equity		16			23			25
Indirect auto		120			107			91
Other consumer		110			78			79
Student		—			—			1
Credit card		38			35			34
Total recoveries		413			325			346
Net charge-offs		(1,803)			(1,595)			(823)
Other(2)		1			(70)			—
Balance, end of period		$	5,161			$	5,093		$	4,649
ACL:(1)
ALLL		4,857			4,798			4,377
RUFC		304			295			272
Total ACL		$	5,161			$	5,093		$	4,649

(1)Excludes provision for credit losses and allowances related to other financial assets at amortized cost.

(2)2023 includes the impact from the adoption of the Troubled Debt Restructurings and Vintage Disclosures accounting standard.

Net charge-offs during 2024 totaled $1.8 billion, or 0.59% as a percentage of average loans, and were up nine basis points compared to the prior year, primarily driven by higher charge-offs in the CRE, other consumer, credit card, and indirect auto portfolios, partially offset by the sale of the student loan portfolio in the prior year.

The allowance for credit losses was $5.2 billion and includes $4.9 billion for the allowance for loan and lease losses and $304 million for the reserve for unfunded commitments. The ALLL ratio was 1.59%, compared to 1.54% at December 31, 2023. The increase in the ALLL ratio primarily reflects increases in reserves related to the CRE, commercial construction, and certain consumer non-real estate portfolios, as well as declines in commercial and industrial balances. The ALLL covered nonperforming loans and leases held for investment 3.4x compared to 3.5x at December 31, 2023. At December 31, 2024, the ALLL was 2.7x annualized net charge-offs, compared to 3.0x at December 31, 2023.

Truist Financial Corporation 67

The following table presents an allocation of the ALLL. The entire amount of the allowance is available to absorb losses occurring in any category of loans and leases.

Table 27: Allocation of ALLL by Category
	December 31, 2024		December 31, 2023
(Dollars in millions)	Amount		% ALLL in Each Category		% Loans in Each Category		Amount		% ALLL in Each Category		% Loans in Each Category
Commercial and industrial	$	1,284			26.4	%		50.7	%		$	1,404			29.4	%		51.6	%
CRE	643			13.2			6.6			616			12.8			7.2
Commercial construction	257			5.3			2.8			174			3.6			2.1
Residential mortgage	204			4.2			18.1			298			6.2			17.8
Home equity	89			1.8			3.1			89			1.9			3.2
Indirect auto	955			19.7			7.5			942			19.6			7.3
Other consumer	994			20.5			9.6			890			18.5			9.2
Credit card	431			8.9			1.6			385			8.0			1.6
Total ALLL	4,857			100.0	%		100.0	%		4,798			100.0	%		100.0	%
RUFC	304							295
Total ACL	$	5,161							$	5,093

Truist monitors the performance of its home equity loans and lines secured by second liens similarly to other consumer loans and utilizes assumptions specific to these loans in determining the necessary ALLL. Truist also receives notification when the first lien holder, whether Truist or another financial institution, has initiated foreclosure proceedings against the borrower. When notified that the first lien is in the process of foreclosure, Truist obtains valuations to determine if any additional charge-offs or reserves are warranted. These valuations are updated at least annually thereafter.

Truist has limited ability to monitor the delinquency status of the first lien, unless the first lien is held or serviced by Truist. Truist estimates credit losses on second lien loans where the first lien is delinquent based on historical experience; the increased risk of loss on these credits is reflected in the ALLL. As of December 31, 2024, Truist held or serviced the first lien on 33% of its second lien positions.

Other Assets

The components of other assets are presented in the following table:

Table 28: Other Assets as of Period End
(Dollars in millions)	Dec 31, 2024		Dec 31, 2023
Tax credit and other private equity investments	$	9,303			$	7,898
Bank-owned life insurance	7,801			7,716
Prepaid pension assets	7,238			6,563
Accrued income	2,069			2,085
DTAs, net	1,945			3,037
Accounts receivable	1,904			997
Leased assets and related assets	1,352			1,647
Prepaid expenses	1,061			1,083
ROU assets	1,015			1,057
Derivative assets	966			951
FHLB stock	965			1,198
Other	1,513			765
Total other assets	$	37,132			$	34,997

68 Truist Financial Corporation

Funding Activities

Deposits are the primary source of funds for the Company’s lending and investing activities. Scheduled payments and maturities from portfolios of loans and investment securities also provide a stable source of liquidity. FHLB advances, other secured borrowings, Federal funds purchased and other short-term borrowed funds, as well as long-term debt issued through the capital markets, all provide supplemental liquidity sources. Funding activities are monitored and governed through Truist’s overall ALM process under the governance and oversight of the ALCO, which is further discussed in the “Market Risk” section in MD&A. The following section provides a brief description of the various sources of funds.

Deposits

Deposits are obtained principally from individuals and businesses within Truist’s geographic area and include noninterest-bearing checking accounts, interest-bearing checking accounts, savings accounts, money market deposit accounts, CDs, and IRAs. Deposit account terms vary with respect to the minimum balance required, the time period the funds must remain on deposit, and service charge schedules. Interest rates paid on specific deposit types are determined based on (i) competitor deposit rates, (ii) the anticipated amount and timing of funding needs, (iii) the availability and cost of alternative sources of funding, and (iv) anticipated future economic conditions and interest rates. Deposits are attractive sources of funding because of their stability and relative cost.

The following table presents a summary of deposits:

Table 29: Deposits as of Period End
(Dollars in millions)	Dec 31, 2024			Dec 31, 2023
Noninterest-bearing deposits		$	107,451			$	111,624
Interest checking		109,042			104,757
Money market and savings		137,307			135,923
Time deposits		36,724			43,561
Total deposits		$	390,524			$	395,865

Deposits totaled $390.5 billion at December 31, 2024, a decrease of $5.3 billion from December 31, 2023. Brokered deposits were $28.1 billion at December 31, 2024 compared to $31.3 billion at December 31, 2023.

Approximately 60% of deposits are insured or collateralized at December 31, 2024, compared to 62% at December 31, 2023. Truist deposit accounts are typically based on long-term relationships that include multiple products and services. The amount of deposits above the FDIC’s limit of $250,000 was $179.1 billion and $175.1 billion as of December 31, 2024 and 2023, respectively, calculated using the same methodology as the Call Report for Truist Bank.

The following table summarizes the maturities of time deposit accounts above $250,000:

Table 30: Scheduled Maturities of Time Deposits $250,000 and Greater
December 31, 2024 (Dollars in millions)
Three months or less	$	4,621
Over three through six months	3,122
Over six through twelve months	2,182
Over twelve months	116
Total	$	10,041

Truist Financial Corporation 69

The following table presents average deposits:

Table 31: Average Deposits
	Three Months Ended
(Dollars in millions)	Dec 31, 2024		Sep 30, 2024		Jun 30, 2024		Mar 31, 2024	Dec 31, 2023
Noninterest-bearing deposits	$	107,968			$	106,080		$	107,634	$	108,888	$	114,555
Interest checking	107,075			103,899			103,894		103,537	101,722
Money market and savings	138,242			136,639			135,264		134,696	137,464
Time deposits	36,757			37,726			41,250		41,937	41,592
Total average deposits	$	390,042			$	384,344		$	388,042	$	389,058	$	395,333

Average deposits for the fourth quarter of 2024 were $390.0 billion, an increase of $5.7 billion, or 1.5%, compared to the prior quarter.

Average noninterest-bearing deposits increased 1.8% compared to the prior quarter and represented 27.7% of total deposits for the fourth quarter of 2024 compared to 27.6% for the third quarter of 2024. Average interest checking increased 3.1%. Average money market and savings accounts increased 1.2%. Average time deposits decreased 2.6%.

Borrowings

The types of short-term borrowings that have been, or may be, used by the Company include Federal funds purchased, securities sold under repurchase agreements, master notes, commercial paper, short-term bank notes, and short-term FHLB advances. Short-term borrowings fluctuate based on the Company’s funding needs. While deposits remain the primary source for funding loan originations, management uses short-term borrowings as a supplementary funding source for loan growth and other balance sheet management purposes. The following table summarizes certain information for the past three years with respect to short-term borrowings excluding trading liabilities, hedges, and collateral in excess of derivative exposure:

Table 32: Short-Term Borrowings
	As Of / For The Year Ended December 31,
(Dollars in millions)	2024		2023		2022
Securities sold under agreements to repurchase:
Maximum outstanding at any month-end during the year	$	9,675			$	4,120			$	6,033
Balance outstanding at end of year	9,675			2,427			2,128
Average outstanding during the year	2,947			2,472			2,670
Average interest rate during the year	5.13	%		5.18	%		1.33	%
Average interest rate at end of year	4.42			5.39			4.36
Federal funds purchased and short-term borrowed funds:
Maximum outstanding at any month-end during the year	$	28,218			$	26,453			$	22,324
Balance outstanding at end of year	19,530			22,401			19,340
Average outstanding during the year	21,552			22,007			10,135
Average interest rate during the year	5.39	%		5.26	%		2.79	%
Average interest rate at end of year	4.04			5.15			4.38

At December 31, 2024, short-term borrowings totaled $29.2 billion, an increase of $4.4 billion compared to December 31, 2023. Average short-term borrowings were $24.5 billion for the years ended December 31, 2024 and 2023, representing 5.5% and 5.2% of total funding, respectively.

Long-term debt provides funding and, to a lesser extent, regulatory capital, and primarily consists of senior and subordinated notes issued by the Parent Company and Truist Bank. Long-term debt totaled $35.0 billion at December 31, 2024, a decrease of $4.0 billion compared to December 31, 2023. During the year ended December 31, 2024, the Company had:

•Net redemptions of $1.8 billion of floating rate FHLB advances.

•Maturities and redemptions of $6.9 billion of senior notes.

•Issuances of $4.5 billion of fixed-to-floating rate senior notes with interest rates between 5.15% and 5.71% due from January 24, 2030 to January 24, 2035.

70 Truist Financial Corporation

Shareholders’ Equity

Truist’s book value per common share and TBVPS are presented in the following table:

Table 33: Book Value per Common Share
(Dollars in millions, except per share data, shares in thousands)	Dec 31, 2024		Dec 31, 2023
Common equity per common share	$	43.90			$	39.31
Non-GAAP capital measure:(1)
Tangible common equity per common share	$	30.01			$	21.83
Calculation of tangible common equity:(1)
Total shareholders’ equity	$	63,679			$	59,253
Less:
Preferred stock	5,907			6,673
Noncontrolling interests	—			152
Goodwill and intangible assets, net of deferred taxes	18,274			23,306
Tangible common equity	$	39,498			$	29,122
Common shares outstanding at end of period	1,315,936			1,333,743

(1)Tangible common equity is a non-GAAP measure that excludes the impact of intangible assets, net of deferred taxes. This measure is useful for evaluating the performance of a business consistently, whether acquired or developed internally. Truist’s management uses this measure to assess balance sheet risk and shareholder value.

Total shareholders’ equity was $63.7 billion at December 31, 2024, an increase of $4.4 billion from December 31, 2023. This increase includes $4.8 billion in net income and $4.3 billion in OCI, partially offset by $3.1 billion in common and preferred dividends,$1.0 billion in common share repurchases, and $750 million for the redemption of series L preferred stock. For 2024, the dividend payout ratio was 62% and the total payout ratio was 85%.Truist’s book value per common share at December 31, 2024 was $43.90, compared to $39.31 at December 31, 2023. Truist’s TBVPS of $30.01 at December 31, 2024, increased 37% compared to December 31, 2023.

Truist Financial Corporation 71

Risk Management

Truist seeks to maintain a comprehensive risk management framework supported by people, processes, and systems to identify, measure, monitor, manage, and report significant risks arising from its exposures and business activities. A key objective of the Company’s risk management framework is to promote the execution of strategic goals and objectives in alignment with its risk appetite.

Truist has developed a risk management taxonomy to provide for the identification and classification of risk elements at Truist. The objective of the risk management taxonomy is to define enterprise-wide categorization for elements used in risk management activities, establish consistently applied language, and enable data analysis, aggregation, and reporting.

Truist is committed to fostering a culture that supports the identification and escalation of risks across the organization. All teammates are responsible for upholding the Company’s purpose, mission, and values, and are encouraged to speak up if there is any activity or behavior that is inconsistent with the Company’s culture. The Truist code of ethics guides the Company’s decision making and informs teammates on how to act in the absence of specific guidance.

Truist seeks an appropriate return for the risk taken in its business operations. Risk-taking activities must be evaluated and prioritized to identify those that present attractive risk-adjusted returns, while preserving asset value and capital.

Truist’s compensation plans are designed to consider teammates’ adherence to and successful implementation of Truist’s risk values and associated policies and procedures. The Company’s compensation structure is designed to support its core values and sound risk management practices in an effort to promote judicious risk-taking behavior.

Truist’s risk appetite is defined as the level of risk exposure Truist is willing to assume to realize its purpose, mission, and values, as well as achieve its strategic objectives, deliver shareholder returns, and maintain the safety and soundness of Truist. Truist’s RMO provides independent oversight and guidance for risk-taking across the enterprise. In keeping with the belief that consistent values drive long-term behaviors, Truist’s RMO has established four key behaviors all teammates are expected to practice daily – regardless of role:

•Awareness: demonstrate an appropriate understanding of enterprise and business unit risks and the controls required to mitigate them. Complete required risk and compliance training within deadlines. Comply with risk related applicable Truist policies.

•Identification: proactively recognize business concerns, issues, risks, or emerging risks as they arise in day-to-day activities.

•Escalation: speak up, report, and elevate concerns, issues, and risks as soon as possible to appropriate parties.

•Mitigation: consistently execute risk related applicable procedures and processes as designed for day-to-day activities. Maintain and execute effective controls to manage risk within risk appetite. As applicable, complete successful and timely remediation of assigned issues.

The BRC assists the Board in its oversight of the Company’s risk management function. The BRC is responsible for approving and periodically reviewing the Company’s risk management framework and risk management policies as well as monitoring the Company’s risk profile, approving risk appetite statements, and providing input to management regarding Truist’s risk appetite and risk profile.

The RMO is led by the CRO and is responsible for overseeing the identification, measurement, monitoring, management, and reporting of risk. The CRO has direct access to the Board to communicate any risk issues (current or emerging) as well as the performance of the risk management activities throughout the enterprise.

The risk management framework is supported by a three-lines-of-defense structure with unique roles and responsibilities for executing risk management activities, maintaining independent oversight, and providing independent assurance. The 1st line of defense (1LOD) includes the business units which originate and own the risk and GCO, which is described below. The 2nd line of defense (2LOD) is the independent risk management function provided by the RMO. The 3rd line of defense (3LOD) is the independent assurance function provided by Truist Audit Services.

The GCO standardizes first-line risk execution and ownership across the Company in partnership with the business units and enterprise functions. As part of the first-line of defense, the GCO provides risk advice and oversight, issues management, testing, reporting, and business continuity expertise to first-line execution efforts. The GCO coordinates closely with the RMO in executing these responsibilities.

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Truist’s Committee and Risk Reporting Governance Program is designed to provide comprehensive Board and management risk oversight, maintaining a committee governance structure that supports alignment and execution of the risk management framework. The committee structure provides a mechanism to allow for efficient aggregation and escalation of risk information from the business units up to management and ultimately the Board. Truist’s committee structure is broken down into three levels of committees:

•Level I committees: Board committees established by the Board to assist in its oversight of the Company. Level I committees are subject to governance directly by the Board, the respective Board committee charters, the bylaws of Truist, and the Truist corporate governance guidelines.

•Level II committees: appointed by a Level I committee with a direct reporting relationship and with the annual review and approval of its charter by the appointing Level I committee.

•Level III committees: appointed by a Level I, II, or III committee with a direct reporting relationship with, and the annual review and approval of its charter by, the appointing “parent” Level I, II, or III committee.

This committee structure includes management committees that are responsible for providing independent risk oversight of each of Truist’s primary risk types and comprehensive coverage of Truist’s strategy, risk-taking and execution activities. Examples of such committees include the ERC and Management Compensation Oversight Committee.

The ERC serves as the enterprise-wide risk governance body authorized by the BRC with responsibility for broad strategic oversight of all risk types and establishing an integrated view of risks across Truist at the enterprise level. The ERC is responsible for maintaining a risk management framework and monitoring its adoption and execution across the enterprise. The ERC is chaired by the CRO and its membership includes the CEO, CFO, Chief Audit Officer, and other designated members of Truist management.

Principal types of inherent risk include market, credit, liquidity, technology, compliance, strategic, reputational, and operational risks. The following is a discussion of these risks.

Market Risk

Market risk is the risk to current or anticipated earnings, capital, or economic value arising from changes in interest rates, spreads, or prices of financial instruments, and the corresponding impact on the composition of the balance sheet or trading and fair value positions. Market risk results from changes in the level, volatility, or correlations among financial market risk factors or prices, including interest rates, credit spreads, foreign exchange rates, equity, and commodity prices.

Truist’s most significant market risk exposure is to interest rate risk in its balance sheet; however, market risk also results from underlying product liquidity risk, price risk, and volatility risk of instruments held in Truist’s business units. Interest rate risk results from: differences between the timing of rate changes and the timing of cash flows associated with assets and liabilities (re-pricing risk); changing rate relationships among different yield curves affecting bank activities (basis risk); changing rate relationships across the spectrum of maturities (yield curve risk); and interest-related options inherently embedded in bank products (options risk).

The primary objectives of market risk management are to minimize adverse effects from changes in market risk factors on net interest income, net income, and capital, and to offset the risk of price changes for certain assets and liabilities recorded at fair value. At Truist, market risk management also includes the enterprise-wide IPV function.

Interest Rate Market Risk

As a financial institution, Truist is exposed to interest rate risk from assets, liabilities, and off-balance sheet positions. Truist primarily monitors this risk through two measurement types, (i) NII at risk and (ii) economic value of equity. Truist manages this risk with securities, derivatives, and broader asset liability management activities. Truist uses derivatives to hedge interest income variability of floating rate loans and to hedge valuation changes of long-term debt and investment securities.

IRR measurement is reported monthly through the ALCO. Monthly IRR reporting includes exposure and historical trends relative to risk limit scenarios, impacts to a wide range of rate scenarios, and sensitivity tests of key assumptions. IRR reporting is provided to the BRC quarterly.

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IRR measurement is influenced by data, assumptions, and models. Due to their high sensitivity to market rates, mortgage (loan and security) prepayments leverage an industry model that results in varying prepayment speeds across rate scenarios. Prepayments for non-mortgage loans leverage a mix of dynamic models (varying results based on market rates) and static prepayment assumptions based on historical experience. Prior to December 2024, interest-bearing-deposit rate paid was projected to move at a constant ratio (deposit beta) of market rates, primarily the Federal Funds Rate, aligned to historical through the cycle experience, and deposit balances in alternate scenarios were aligned to the Truist baseline scenario. In December 2024, we enhanced our deposit methodology to more dynamically incorporate client deposit balance levels, the mix across product types, and deposit rate paid across alternate rate scenarios based on modeled changes in customer and bank behavior.

NII at risk measures the change in NII under alternate interest rate scenarios relative to Truist’s baseline scenario, which incorporates Truist’s current balance sheet and off-balance sheet hedges as well as expectations for new business over the forecast horizon. Truist’s baseline scenario relies on assumptions including expectations of the economy and interest rates – which are influenced by market conditions, new business volume, pricing, and customer behavior. In measuring NII at risk, Truist assumes that changes in key factors, such as prepayments and deposit pricing (betas), largely move in line with those it has experienced in prior rate cycles. However, future behavior of key factors may vary from Truist’s assumptions. NII at risk measurement assumes, when applicable, that U.S. interest rates floor at zero and Truist does not take any balance sheet or hedging actions in response to the rate scenarios.

Truist evaluates a wide range of alternate scenarios including instantaneous and gradual as well as parallel and non-parallel changes in interest rates. The table below presents the estimated change to NII over the following 12 months for select parallel alternate scenarios, expressed as a percentage change relative to baseline NII.

The change in simulation analysis results from December 31, 2023 to December 31, 2024 in the table below was primarily due to the aforementioned enhanced deposit methodology. The use of dynamic deposit balance models results in rotation to higher cost funding products (e.g., CDs) when market rates increase and to lower cost funding products (e.g., non-maturity deposits) when market rates decrease. The use of dynamic rate paid models results in varying deposit betas based on the timing and conditions within market rate cycles but generally result in lower betas in the simulation analysis results than the prior methodology due to beta lag effects relative to changes in market rates. These updates were made to better reflect expected deposit behavior and Truist’s NII rate sensitivity to changes in market rates. Together, the incorporation of dynamic deposit balances and dynamic rate paid resulted in adding NII in up rate scenarios and reducing NII in down rate scenarios.

Table 34: Interest Sensitivity Simulation Analysis
	Dec 31, 2024		Dec 31, 2023
Up 200bps gradual change in interest rates	1.1	%		(1.5)	%
Up 50bps instantaneous change in interest rates	0.6			(0.4)
Down 50bps instantaneous change in interest rates	(0.8)			(0.1)
Down 200bps gradual change in interest rates	(2.1)			(0.3)

Truist performs and monitors sensitivity tests of key assumptions used in NII risk including:

•Asset prepayment speeds

•New loan volume pricing spreads

•Interest-bearing deposit betas

•Non-interest-bearing demand deposit balance runoff, replaced by market funding

EVE measures changes in the economic value of Truist’s current balance sheet and off-balance sheet hedges under alternate rate scenarios relative to starting economic value. Truist uses EVE as a longer-term measure of interest rate risk. Truist performs and monitors sensitivity tests of key assumptions used in EVE including:

•Asset prepayment speeds

•Mortgage spreads (mortgage loan and security valuations)

•Interest-bearing deposit beta

•Deposit runoff / decay

Key assumption tests are generally performed by increasing and decreasing the assumption, whether static or dynamically modeled, relative to their respective starting values and then measuring the resulting impact to NII and EVE under baseline and alternate rate scenarios.

The identification and testing of key assumptions are influenced by market conditions and management views of key risks. The results of key assumption sensitivity tests are reported to ALCO and BRC at least quarterly. Key assumptions and their associated sensitivity tests are reviewed with ALCO and BRC at least annually.

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Market Risk from Trading Activities

As a financial intermediary, Truist provides its clients access to derivatives, foreign exchange, and securities markets, which generate market risks. Trading market risk is managed using a multi-faceted risk management approach, which includes measuring risk using VaR, stress testing, and sensitivity analysis. Risk metrics are monitored against a suite of limits on a daily basis at both the trading desk level and at the aggregate portfolio level.

Truist is also subject to risk-based capital guidelines for market risk under the Market Risk Rule.

Covered Trading Positions

Covered positions subject to the Market Risk Rule include trading assets and liabilities, specifically those held for the purpose of short-term resale or with the intent of benefiting from actual or expected short-term price movements or to lock in arbitrage profits. Truist’s trading portfolio of covered positions results primarily from market making and underwriting services for the Company’s clients, as well as associated risk mitigating hedging activity. The trading portfolio, measured in terms of VaR, consists primarily of four sub-portfolios of covered positions: (i) credit trading, (ii) fixed income securities, (iii) interest rate derivatives, and (iv) equity derivatives. As a market maker across different asset classes, Truist’s trading portfolio also contains other sub-portfolios, including foreign exchange, loan trading, and commodity derivatives; however, these portfolios do not generate material trading risk exposures.

Valuation policies and methodologies exist for all trading positions. Additionally, these positions are subject to independent price verification. See “Note 19. Derivative Financial Instruments,” “Note 18. Fair Value Disclosures,” and “Critical Accounting Policies” herein for discussion of valuation policies and methodologies.

Securitizations

As of December 31, 2024, the aggregate market value of on-balance sheet securitization positions subject to the Market Risk Rule, which were non-agency asset backed securities positions, was $100 million. Consistent with the Market Risk Rule requirements, the Company performs pre-purchase due diligence on each securitization position to identify the characteristics including deal structure and the asset quality of the underlying assets, that materially affect valuation and performance. Securitization positions are subject to Truist’s risk management framework, which includes daily monitoring against a suite of limits. There were no off-balance sheet securitization positions during the reporting period.

Correlation Trading Positions

The trading portfolio of covered positions did not contain any correlation trading positions as of December 31, 2024.

VaR-Based Measures

VaR measures the potential loss of a given position or portfolio of positions at a specified confidence level and time horizon. Truist utilizes a historical VaR methodology to measure and aggregate risks across its covered trading positions. For risk management purposes, the VaR calculation is based on a historical simulation approach and measures the potential trading losses using a one-day holding period at a one-tail, 99% confidence level. For Market Risk Rule purposes, the Company calculates VaR using a 10-day holding period and a 99% confidence level. Due to inherent limitations of the VaR methodology, such as the assumption that past market behavior is indicative of future market performance, VaR is only one of several tools used to measure and manage market risk. Other tools used to manage market risk include stress testing, scenario analysis, and stop loss limits.

The trading portfolio’s VaR profile is influenced by a variety of factors, including the size and composition of the portfolio, market volatility, and the correlation between different positions. A portfolio of trading positions is typically less risky than the sum of the risk from each of the individual sub-portfolios, because, under normal market conditions, risk within each category partially offsets the exposure to other risk categories. The following table summarizes certain VaR-based measures for the year ended December 31, 2024 and 2023.

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Table 35: VaR-based Measures
	Year Ended December 31,
		2024	2023
(Dollars in millions)				10-Day Holding Period		1-Day Holding Period		10-Day Holding Period		1-Day Holding Period
VaR-based Measures:
Maximum				$	28			$	12			$	30	$	14
Average				21			7			17			7
Minimum				12			4			10			4
Period-end				16			6			23			11
VaR by Risk Class:
Interest Rate Risk						6					5
Credit Spread Risk						6					2
Equity Price Risk						6					5
Foreign Exchange Risk						1					1
Portfolio Diversification						(12)					(2)
Period-end						6					11

Stressed VaR-based measures

Stressed VaR, another component of market risk capital, is calculated using the same internal models as used for the VaR-based measure. Stressed VaR is calculated over a ten-day holding period at a one-tail, 99% confidence level and employs a historical simulation approach based on a continuous twelve-month historical window selected to reflect a period of significant financial stress for the Company’s trading portfolio. The following table summarizes Stressed VaR-based measures:

Table 36: Stressed VaR-based Measures - 10 Day Holding Period
	Year Ended December 31,
(Dollars in millions)		2024		2023
Maximum		$	234			$	164
Average		145			76
Minimum		69			25
Period-end		105			79

Compared to the same period of the prior year, Stressed VaR measures were higher, primarily due to higher market making inventory.

Specific Risk Measures

Specific risk is a measure of idiosyncratic risk that could result from risk factors other than broad market movements (e.g., default or event risks). The Market Risk Rule provides fixed risk weights under a standardized measurement method while also allowing a model-based approach, subject to regulatory approval. Truist utilizes the standardized measurement method to calculate the specific risk component of market risk regulatory capital. As such, incremental risk capital requirements do not apply.

VaR Model Backtesting

In accordance with the Market Risk Rule, the Company evaluates the accuracy of its VaR model through daily backtesting by comparing aggregate daily trading gains and losses (excluding fees, commissions, reserves, net interest income, and intraday trading) from covered positions with the corresponding daily VaR-based measures generated by the model. As illustrated in the following graph, there were no Company-wide VaR backtesting exceptions during the twelve months ended December 31, 2024. The total number of Company-wide VaR backtesting exceptions over the preceding twelve months is used to determine the multiplication factor for the VaR-based capital requirement under the Market Risk Rule. The capital multiplication factor increases from a minimum of three to a maximum of four, depending on the number of exceptions. All Company-wide VaR backtesting exceptions are thoroughly reviewed in the context of VaR model use and performance. There was no change in the capital multiplication factor over the preceding twelve months.

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Model Risk Oversight

MRO is responsible for the independent model validation of all decision models, including trading market risk models. As part of ongoing monitoring efforts, the performance of all trading risk models is reviewed regularly to evaluate model performance with emerging developments in financial markets, assess evolving modeling approaches, and identify potential model enhancement.

Stress Testing

The Company uses a range of stress testing techniques to help monitor risks across trading desks and to augment standard daily VaR and other risk limits reporting. The stress testing framework is designed to quantify the impact of extreme, but plausible, stress scenarios that could lead to large, unexpected losses. Stress tests include simulations for risk factor sensitivities, historical repeats, and hypothetical scenarios with varying liquidity horizons of key risk factors. All trading positions within each applicable market risk category (i.e., interest rate risk, equity risk, foreign exchange rate risk, credit spread risk, and commodity price risk) are included in the Company’s stress testing framework. Management reviews stress testing scenarios and makes updates on an ongoing basis. Management also utilizes stress analyses to support the Company’s capital adequacy assessment standards. See the “Capital” section of MD&A for additional discussion of capital adequacy.

Credit Risk

Credit risk is the risk to current or anticipated earnings or capital arising when a borrower, obligor, issuer, or counterparty does not meet its financial obligations to us. Credit risk is primarily incurred through lending activities in the Company’s WB and CSBB operating segments. A number of products expose the Company to credit risk, including loans and leases, lending commitments, derivatives, trading assets, and investment securities. Changes in credit quality can have a significant impact on the Company’s earnings and capital position.

Truist has established the following general practices to manage credit risk:

•limiting the amount of credit that individual lenders may extend to a borrower;

•establishing a process for credit approval accountability;

•careful initial underwriting and analysis of borrower, transaction, market, and collateral risks;

•ongoing servicing and monitoring of individual loans and lending relationships;

•maintaining collections and asset resolution teams;

•continuous monitoring of the portfolio, concentration and transactional limits, emerging risks, market dynamics and the economy; and

•periodically reevaluating the Company’s strategy and overall exposure as economic, market and other relevant conditions change.

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The following discussion describes the underwriting procedures and overall risk management of Truist’s lending function.

Underwriting Approach

The loan portfolio is a primary source of profitability and risk; therefore, proper loan underwriting is critical to Truist’s long-term financial success. Truist’s underwriting approach is designed to define acceptable combinations of specific risk-mitigating features that promote credit relationships that conform to Truist’s risk philosophy. Provided below is a summary of the most significant underwriting criteria used to evaluate new loans and loan renewals:

•Cash flow and debt service coverage - cash flow adequacy is a necessary condition of creditworthiness, meaning that loans must either be clearly supported by a borrower’s cash flow or, if not, must be justified by secondary repayment sources.

•Secondary sources of repayment - alternative repayment funds are a significant risk-mitigating factor as long as they are liquid, can be easily accessed, and provide adequate resources to supplement the primary cash flow source.

•Value of any underlying collateral - loans are generally secured by the asset being financed. Because an analysis of the primary and secondary sources of repayment is the most important factor, collateral, unless it is liquid, does not justify loans that cannot be serviced by the borrower’s primary and secondary cash flows.

•Overall creditworthiness of the client, taking into account the client’s relationships, both past and current, with Truist and other lenders - Truist’s success depends on building lasting and mutually beneficial relationships with clients, which involves assessing their financial position and background.

•Level of equity invested in the transaction - in general, borrowers are required to contribute or invest a portion of their own funds prior to any loan advances.

Refer to the “Lending Activities” section in MD&A for a discussion of each loan and lease portfolio.

Liquidity Risk

Liquidity risk is the risk that Truist will be unable, or that market participants may perceive Truist to be unable, to fund increases in its assets and meet its financial obligations at a reasonable cost and in a timely manner. Refer to the “Liquidity” section in MD&A for additional discussion.

Technology Risk

Technology risk is the risk associated with the disruption or failure of technology that negatively impacts business operations. Truist has defined and adopted a technology risk framework that provides the foundation for its technology risk strategy, program, and oversight and defines key objectives, operating model components, risk domains, and capabilities to manage this risk.

Refer to Item 1C, “Cybersecurity” for a discussion regarding Truist’s cybersecurity risk management, strategy, and governance.

Data Analytics, AI, and Generative AI Risks

Data risk is the risk to current or projected financial condition, operations, strategic objectives, and regulatory compliance arising from inadequate data accuracy, completeness, consistency, timeliness, relevance, integrity, and validity (i.e., data fidelity). Inadequate data fidelity can negatively impact regulatory and management reporting, public disclosures, and business decisions.

Truist recognizes the importance of maintaining accurate and reliable data and maintains a formal data risk management program that is designed to mitigate risks related to data fidelity. Through active data risk monitoring and accuracy testing, Truist seeks to provide reasonable assurance over data-related processes, risks, and controls, as well as the quality and retention of key data used for operational, strategic, regulatory, and compliance purposes. Management and the Board provide oversight of the data risk management program and receive regular updates from the RMO.

Truist’s AI program is foundationally based on the National Institute of Standards and Technology AI Risk Management Framework Core, which provides outcomes and actions that enable dialogue, understanding, and activities to manage AI risks and develop trustworthy AI systems.

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Compliance Risk

Compliance risk is the risk of legal or regulatory sanctions, financial loss, or damage to reputation as a result of noncompliance with (i) applicable laws, regulations, rules or other regulatory requirements (for example, the risk of consumer or wholesale clients experiencing economic loss or other legal harm as a result of noncompliance with relevant laws, requirements or regulations, such as the BSA and its related laws and regulations); (ii) internal policies and procedures, standards of best practice or codes of conduct; and (iii) principles of integrity and fair dealing applicable to Truist’s activities and functions.

Strategic Risk

Strategic risk is the risk to earnings, capital, franchise value, stakeholder confidence, and human capital arising from ineffective strategy, inability to adapt to changes in operating environment, adverse business decisions, or improper execution of strategic initiatives.

Reputational Risk

Reputational risk is the risk to current or future earnings, capital and resilience arising from negative publicity or stakeholder opinion, whether real or perceived, regarding Truist’s business practices, products, services, transactions, or other activities undertaken by Truist, its representatives, or its partners that may adversely impair Truist’s brand and public confidence, relationship with clients, teammates, stakeholders, or communities. The Company monitors, identifies, and internally escalates potential reputational risk events and endeavors to mitigate such reputational risks in a timely manner. Truist seeks to provide transparent and accurate communication, both internally and externally, to respond to key stakeholders on issues or events that could give rise to potential reputational risk. Truist utilizes an established risk taxonomy that is used to help identify, measure, and monitor reputational risk that enables clear transparently communication to stakeholders on the level of potential risk faced by the Company which in turn allows for effective management of risk to acceptable levels.

Truist is committed to operating in a manner that reflects the Company’s stated purpose, mission, and values and seeks to protect its reputation, public confidence, and resilience by identifying and evaluating associated risks that conflict with the expectations of the Company’s internal and external stakeholders, including clients, teammates, investors, regulators, and communities.

Operational Risk

Operational risk is the risk of loss associated with inadequate or failed internal processes, people, systems, or from external events. It includes legal risk, which is the risk of loss arising from defective transactions, litigation or claims made, or the failure to adequately protect company-owned assets. An operational loss occurs when an event results in a loss or reserve originating from operational risk.

Model Risk

Model risk is the risk to current or anticipated earnings or capital from decisions based on incorrect or misused model outputs. Truist uses models for many purposes, including the valuation of financial positions, estimation of credit losses, and the measurement of risk. Valuation models are used to value certain financial instruments for which quoted prices may not be readily available. Valuation models are also used as inputs for VaR, the estimation of VaR itself, regulatory capital, stress testing, and the ACL. Models are owned by the applicable business units, which are responsible for the development, implementation, and use of their models. Oversight of these functions is performed by the MRO, which is a component of the RMO. Once models have been approved by MRO, model owners are responsible for the maintenance of an appropriate operating environment and must monitor and evaluate the performance of the models on a recurring basis. Models are updated in response to changes in portfolio composition, industry and economic conditions, technological capabilities, and other developments.

MRO seeks to manage model risk through a suite of model governance and model validation activities. The risk of each model is assessed and classified into various risk tiers. Additionally, MRO maintains an enterprise-wide model inventory containing relevant model information. Regarding model validation, MRO utilizes internal validation analysts and managers with skill sets in predictive modeling to perform detailed reviews of model development, implementation, and conceptual soundness. On certain occasions, the MRO will also engage external parties to assist with validation efforts. Once in a production environment, MRO assesses a model’s performance on a periodic basis through ongoing monitoring reviews. MRO tracks issues that have been identified during model validation or through ongoing monitoring and engages with model owners to drive timely remediation. MRO gauges model risk utilizing a collection of key risk indicators, which are periodically reported to relevant committees, including the Model Risk Management Committee and the ERC. MRO will also present model risk topics to the BRC as necessary.

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Liquidity

Liquidity is the ability to fund increases in assets and meet obligations as they come due, all without incurring unacceptable costs. In addition to the level of liquid assets, such as cash, cash equivalents, and highly liquid unencumbered securities, other factors affect the ability to meet liquidity needs, including access to a variety of funding sources, maintaining borrowing capacity, growing core deposits, loan repayment, and the ability to securitize or package loans for sale.

Truist has a liquidity risk management process designed to identify, measure, and monitor key liquidity risks to assess whether Truist is operating within its liquidity risk appetite. The liquidity risk appetite is outlined using a qualitative statement and more granular detailed risk appetite statements aligned to Truist’s risk taxonomy; risk statements form the basis for aligning risk appetite with risk management goals and strategy. Using the risk appetite statements, key risk indicators are developed that represent quantitative metrics which measure current risk exposure relative to Truist’s risk appetite, which help the Board and management monitor liquidity risk taking activity. Truist’s key risk indicators are designed to support the following objectives:

•maintain (i) a diversified, but customer deposit centric, funding base, (ii) a level of liquid, readily monetized assets sufficient to satisfy business as usual and stressed cash flow needs across multiple liquidity horizons, and (iii) an appropriate level of contingent funding to meet any unexpected needs;

•limit concentration risk from individual, correlated counterparties, and funding concentrations in tenors that may negatively impact Truist from an unforeseen idiosyncratic or market event; and

•maintain sufficient liquidity in the holding company to serve as a source of strength to its subsidiaries.

Internal Liquidity Stress Testing

Liquidity stress testing is conducted for Truist and Truist Bank using a variety of institution-specific and market-wide adverse scenarios. Each liquidity stress test scenario applies defined assumptions to execute sources and uses of liquidity over varying planning horizons. The types of expected liquidity uses during a stressed event may include deposit attrition, contractual maturities, reductions in unsecured and secured funding, increased draws on unfunded commitments, and the potential need to post additional collateral for derivatives. To mitigate liquidity outflows, Truist has identified sources of liquidity; however, access to these sources of liquidity could be affected within a stressed environment.

Truist maintains a liquidity buffer of cash on hand and highly liquid unencumbered securities that is designed to meet the projected 30-day net stressed cash-flow needs. Truist’s liquidity buffer is substantially the same in composition to what qualifies as HQLA under the LCR Rule. Truist periodically monetizes a representative sample of the liquidity buffer to assess operational readiness through available monetization channels.

Contingency Funding Plan

Truist has a contingency funding plan designed to address ongoing obligations and commitments, particularly in the event of a liquidity contraction. This plan is designed to examine and quantify the organization’s liquidity under the various internal liquidity stress scenarios and is periodically tested to assess the plan’s reliability. Additionally, the plan provides a framework for management and other teammates to follow in the event of a liquidity contraction or in anticipation of such an event. The plan addresses authority for activation and decision making, liquidity options, and the responsibilities of key departments in the event of a liquidity contraction. On a quarterly basis, Truist conducts testing of market access for alternative sources of funds (e.g. discount window, standing repo facility, etc.) to test operational readiness. On an periodic basis, Truist conducts a table-top test of the Contingency Funding Plan to assess reliability of the plan during liquidity stress events and to simulate the operational elements of the plan such as communications, coordination, and decision-making.

LCR, NSFR, and HQLA

The LCR rule requires that Truist and Truist Bank maintain an amount of eligible HQLA that is sufficient within the parameters of the rule to meet their estimated total net cash outflows over a prospective 30 calendar-day period of stress. Eligible HQLA, for purposes of calculating the LCR, is the amount of unencumbered HQLA that satisfy operational requirements of the LCR rule. Truist and Truist Bank are subject to the Category III reduced LCR requirements. Truist held average weighted eligible HQLA of $89.6 billion and Truist’s average LCR was 109% for the three months ended December 31, 2024.

The NSFR rule defines a minimum amount of stable, long-term funding that Truist and Truist Bank must maintain in relation to their asset composition and off-balance sheet activities. Truist and Truist Bank are subject to the Category III reduced NSFR requirements. At December 31, 2024, Truist was compliant with this requirement.

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Sources of Funds

Truist funds its balance sheet through diverse sources of funding including client deposits, secured and unsecured capital markets funding, and shareholders’ equity. Truist Bank’s primary source of funding is client deposits. Continued access to client deposits is highly dependent on public confidence in the stability of Truist Bank and its ability to return funds to clients when requested.

Truist Bank maintains a number of diverse funding sources to meet its liquidity requirements. These sources include unsecured borrowings from the capital markets through the issuance of senior or subordinated bank notes, institutional CDs, overnight and term Federal funds markets, and retail brokered CDs. Truist Bank also maintains access to secured borrowing sources, including FHLB advances, repurchase agreements, and the FRB discount window. Available investment securities could be pledged to create additional secured borrowing capacity. The following table presents a summary of Truist Bank’s available secured borrowing capacity and eligible cash at the FRB:

Table 37: Selected Liquidity Sources
(Dollars in millions)	Dec 31, 2024		Dec 31, 2023
Unused borrowing capacity:
FRB	$	72,040			$	55,252
FHLB	31,411			24,712
Available investment securities (at fair value)	68,212			77,029
Available secured borrowing capacity	171,663			156,993
Eligible cash at the FRB	33,717			25,085
Total	$	205,380			$	182,078

At December 31, 2024, Truist Bank’s available secured borrowing capacity represented approximately 4.4 times the amount of wholesale funding maturities in one-year or less.

As of December 31, 2024, the Company had $1.7 billion in obligations to purchase goods or services that are enforceable and legally binding. Many of the purchase obligations have terms that are not fixed and determinable and are included in the total amount of obligations based upon the estimated timing and amount of payment. In addition, certain of the purchase agreements contain clauses that would allow Truist to cancel the agreement with specified notice; however, that impact is not included in determining the total amount of obligations. See “Note 9. Other Assets and Liabilities,” “Note 11. Borrowings,” and “Note 16. Commitments and Contingencies” for additional information regarding outstanding balances of sources of liquidity and contractual commitments and obligations.

Parent Company

The Parent Company serves as the primary source of capital for its operating subsidiaries. The Parent Company’s assets consist primarily of cash on deposit with Truist Bank, equity investments in subsidiaries, advances to subsidiaries, and notes receivable from subsidiaries. The principal obligations of the Parent Company are payments on long-term debt. The main sources of funds for the Parent Company are dividends and management fees from subsidiaries, repayments of advances to subsidiaries, and proceeds from the issuance of equity and long-term debt. The primary uses of funds by the Parent Company are investments in subsidiaries, advances to subsidiaries, dividend payments to common and preferred shareholders, repurchases of common stock, payments on and, from time-to-time, potential repurchases or redemptions of a portion of an outstanding tranche of the long-term debt of the Parent Company (as may be permitted by the terms of each respective series), and the redemption of preferred stock. See “Note 22. Parent Company Financial Information” for additional information regarding dividends from subsidiaries and debt transactions.

Access to funding at the Parent Company is more sensitive to market disruptions. Therefore, Truist manages cash levels at the Parent Company to exceed a minimum of 12 months of projected cash outflows. In determining the buffer, Truist considers cash requirements for common and preferred dividends, unfunded commitments to affiliates, serving as a source of strength to Truist Bank, and being able to withstand sustained market disruptions that could limit access to the capital markets. At December 31, 2024, the Parent Company held cash on hand to meet these requirements.

Credit Ratings

Credit ratings are forward-looking opinions of rating agencies as to the Company’s ability to meet its financial commitments and repay its securities and obligations in accordance with their terms of issuance. Credit ratings influence both borrowing costs and access to the capital markets. The Company’s credit ratings are continuously monitored by the rating agencies and are subject to change at any time. As Truist seeks to maintain high-quality credit ratings, management meets with the major rating agencies on a regular basis to provide financial and business updates and to discuss current outlooks and trends. See Item 1A, “Risk Factors” for additional information regarding factors that influence credit ratings and potential risks that could materialize in the event of downgrade in the Company’s credit ratings.

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The following table presents the credit ratings and outlooks of the Parent Company and Truist Bank as of December 31, 2024:

Table 38: Credit Ratings of Truist Financial Corporation and Truist Bank
	Moody’s	S&P	Fitch	DBRS Morningstar
Truist Financial Corporation:
Issuer	Baa1	A- / A-2	A / F1	AAL / R-1M
Senior unsecured	Baa1	A-	A-	AAL
Subordinated	Baa1	BBB+	BBB+	AH
Preferred stock	Baa3(hyb)	BBB-	BBB-	AL
Truist Bank:
Issuer	A3	A / A-1	A / F1	AA / R-1H
Senior unsecured	A3	A	A	AA
Deposits	A1/P-1	NA	A+ / F1	AA
Subordinated	(P) A3	A-	A-	AAL
Ratings outlook:
Credit trend	Stable	Stable	Stable	Stable

Capital

The maintenance of appropriate levels of capital is a management priority and is monitored on a regular basis. Truist’s principal goals related to the maintenance of capital are to provide adequate capital to support Truist’s risk profile consistent with the Board-approved risk appetite, provide financial flexibility to support future growth and client needs, comply with relevant laws, regulations, and supervisory guidance, achieve optimal credit ratings for Truist, for the Parent Company to remain a source of strength for the Parent Company’s subsidiaries, and provide a competitive return to shareholders. Risk-based capital ratios, which include CET1 capital, Tier 1 capital, and Total capital are calculated based on regulatory guidance related to the measurement of capital and risk-weighted assets.

Management regularly monitors the capital position of Truist on both a consolidated and bank-level basis. In this regard, management’s objective is to maintain capital at levels that are in excess of internal capital limits, which are above the regulatory “well-capitalized” minimums. Truist also regularly performs stress testing on its capital levels and is required to periodically submit the Company’s capital plans and stress testing results to the banking regulators. Management has implemented internal stress capital ratio minimums that serve as limits which are measured under internally-developed stress testing scenarios to evaluate whether capital ratios calculated under hypothetical stress, and after the effect of alternative capital actions, are likely to remain above internal stressed minimums. Breaches of internal capital limits or projected breaches of internal stress capital ratio minimums under hypothetical stress result in the activation of Truist’s capital contingency plan.

Table 39: Capital Requirements
	Minimum Capital		Well-Capitalized		Minimum Capital Plus Stress Capital Buffer(1)
		Truist		Truist Bank
CET1	4.5	%		NA		6.5	%		7.3	%
Tier 1 capital	6.0			6.0	%		8.0			8.8
Total capital	8.0			10.0			10.0			10.8
Leverage ratio	4.0			NA		5.0			NA
Supplementary leverage ratio	3.0			NA		NA		NA

(1)Reflects a SCB requirement of 2.8% applicable to Truist as of December 31, 2024. Truist’s SCB requirement, received in the 2024 CCAR process, is effective from October 1, 2024 to September 30, 2025.

Truist completed the 2024 CCAR process and received a SCB requirement of 2.8% for the period October 1, 2024 to September 30, 2025, down 10 basis points from the SCB requirement for the period October 1, 2023 to September 30, 2024.

Payments of cash dividends and repurchases of common shares are among the methods used to manage any excess capital generated. In addition, management closely monitors the Parent Company’s double leverage ratio (investments in subsidiaries as a percentage of shareholders’ equity). The active management of the subsidiaries’ equity capital is the process used to manage this important driver of Parent Company liquidity and is a key element in the management of Truist’s capital position.

Management intends to maintain capital at Truist Bank at levels that exceed the minimum capital plus CCB. This will also result in Truist Bank being “well-capitalized” for regulatory purposes.

Management’s capital deployment plan in order of preference is to focus on (i) organic growth, (ii) dividends, (iii) strategic opportunities and acquisitions, and (iv) share repurchases if excess capital is available.

82 Truist Financial Corporation

Truist Bank’s capital ratios are presented in the following table:

Table 40: Capital Ratios - Truist Bank
	Dec 31, 2024		Dec 31, 2023
CET1	12.6	%		11.7	%
Tier 1 capital	12.6			11.7
Total capital	14.3			13.3
Leverage ratio	10.1			9.2
Supplementary leverage ratio	8.5			7.9

The Parent Company’s capital ratios are presented in the following table:

Table 41: Capital Ratios - Truist Financial Corporation
(Dollars in millions)	Dec 31, 2024		Dec 31, 2023
Risk-based:
CET1	11.5	%		10.1	%
Tier 1 capital	12.9			11.6
Total capital	15.0			13.7
Leverage ratio	10.5			9.3
Supplementary leverage ratio	8.8			7.9
Risk-weighted assets	$	418,337			$	423,705

Truist’s capital level at December 31, 2024 remains strong compared to the regulatory levels for well-capitalized banks. Truist’s CET1 ratio was 11.5% as of December 31, 2024, up 140 basis points since December 31, 2023 from the sale of TIH and organic capital generation, partially offset by common dividends, share repurchases, and the impact of the CECL phase-in under U.S. banking agencies rules. The remaining CECL phase-in will be amortized in the first quarter of 2025.

Truist paid $2.8 billion in common stock dividends, or $2.08 per share, during 2024 and for 2023. Truist repurchased $1.0 billion in common stock for 2024 and had no share repurchases for 2023. In early 2025, Truist declared common dividends of $0.52 per share for the first quarter of 2025.

Capital Contingency Plan

In the event of a realized or potential capital shortfall, Truist has a capital contingency plan that is designed to facilitate improvement of the Company’s capital position through the execution of specific contingency actions which either increase capital, decrease risk-weighted assets, or both. The plan provides a framework designed to monitor for the occurrence of these events by establishing mechanisms to detect capital contraction, including market and economic stress that could adversely impact the Company’s capital position. The plan also establishes governance protocols for activation or deactivation and decision making, list capital contingency options and associated key information, and addresses the responsibilities of key departments.

Reclassifications

In certain circumstances, reclassifications have been made to prior period information to conform to the current presentation. Such reclassifications had no effect on previously reported shareholders’ equity or net income. Refer to “Note 1. Basis of Presentation” for additional discussion regarding reclassifications.

Critical Accounting Policies

The accounting and reporting policies of Truist are in accordance with GAAP and conform to the accounting and reporting guidelines prescribed by bank regulatory authorities. The financial position and results of operations are affected by management’s application of accounting policies, including estimates, assumptions and judgments made to arrive at the carrying value of assets and liabilities and amounts reported for revenues and expenses. Different assumptions in the application of these policies could result in material changes in the consolidated financial position and/or consolidated results of operations and related disclosures. Understanding Truist’s accounting policies is fundamental to understanding the consolidated financial position and consolidated results of operations. Accordingly, Truist’s significant accounting policies and effects of new accounting pronouncements are discussed in detail in “Note 1. Basis of Presentation.”

The following is a summary of Truist’s critical accounting policies that are highly dependent on estimates, assumptions, and judgments. These critical accounting policies are reviewed with the Audit Committee of the Board of Directors on a periodic basis.

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ACL

Truist’s ACL represents management’s best estimate of expected future credit losses related to the loan and lease portfolios and off-balance sheet lending commitments at the balance sheet date. Estimates of expected future loan and lease losses are determined by using statistical models and management’s judgement. The ACL estimation process includes both quantitatively calculated components as well as qualitative components. Quantitative models are designed to forecast probability of default, exposure at default and loss given default by correlating certain macroeconomic forecast data to historical experience. The models are generally applied at the portfolio level to pools of loans with similar risk characteristics. Certain loans or leases that do not have similar risk characteristics are individually evaluated when establishing an allowance for expected credit losses. The macroeconomic forecast data used in the models is based on forecasted variables for the reasonable and supportable period of two years. Beyond this forecast period the models gradually revert to long-term historical loss conditions over a one-year period. As a means of addressing uncertainty related to future economic conditions, the quantitative allowance components include an adjustment that reflects model outputs calculated using a range of potential future economic conditions. Expected losses are estimated through contractual maturity, giving appropriate consideration to expected prepayments unless the borrower has a right to renew that is not cancellable or to capture the losses expected at the balance sheet date or prior to January 1, 2023 it was reasonably expected that the loan will be modified as a TDR.

The qualitative components of the ACL incorporate management’s judgment in determining qualitative adjustments where model outputs are inconsistent with management’s expectations with respect to expected credit losses. The qualitative components are used to adjust for limitations in modeled results related to current economic conditions, and considerations with respect to the impact of current and expected events or risks, the outcomes of which are uncertain and may not be completely considered by quantitative models.

Management considers a range of macroeconomic forecast data in connection with the allowance estimation process. Under the range of scenarios considered as of December 31, 2024, use of the Company’s pessimistic scenario would have resulted in an increase to the modeled allowance results of approximately $2.2 billion. This estimate reflects the sensitivity of the modeled allowance estimate to macroeconomic forecast data but does not consider other qualitative adjustments that could increase or decrease modeled loss estimates calculated using this alternative economic scenario.

The methodology used to determine an estimate for the RUFC is similar to that used to determine the funded component of the ALLL and is measured over the period there is a contractual obligation to extend credit that is not unconditionally cancellable. The RUFC is adjusted for factors specific to binding commitments, including the probability of funding and exposure at default. A detailed discussion of the methodology used in determining the ACL is included in “Note 1. Basis of Presentation.”

Fair Value of Financial Instruments

The vast majority of assets and liabilities measured at fair value on a recurring basis are based on either quoted market prices or market prices for similar instruments. Refer to “Note 18. Fair Value Disclosures” for additional disclosures regarding the fair value of financial instruments.

Securities

Truist generally utilizes a third-party pricing service in determining the fair value of its AFS investment securities, whereas trading securities are priced internally. Fair value measurements for investment securities are derived from market-based pricing matrices that were developed using observable inputs that include benchmark yields, benchmark securities, reported trades, offers, bids, issuer spreads, and broker quotes. Management performs procedures to evaluate the fair values provided by the third-party service provider. These procedures, which are performed independent of the responsible business unit, include comparison of pricing information received from the third-party pricing service to other third-party pricing sources, review of additional information provided by the third-party pricing service and other third-party sources for selected securities and back-testing to compare the price realized on security sales to the daily pricing information received from the third-party pricing service. The Enterprise Valuation Committee provides oversight to Truist’s enterprise-wide IPV function, which is responsible for the comparison of pricing information received from the third-party pricing service or internally to other third-party pricing sources, approving tolerance limits determined by IPV for price comparison exceptions, reviewing significant changes to pricing and valuation policies and reviewing and approving the pricing decisions made on any illiquid and hard-to-price securities. When market observable data is not available, which generally occurs due to the lack of liquidity or inactive markets for certain securities, the valuation of the security is subjective and may involve substantial judgment by management to reflect unobservable input assumptions.

84 Truist Financial Corporation

MSRs

Truist’s primary class of MSRs for which it separately manages the economic risks relates to residential mortgages. Residential MSRs do not trade in an active, open market with readily observable prices. While sales of MSRs do occur, the precise terms and conditions typically are not readily available. Accordingly, Truist estimates the fair value of residential MSRs using a stochastic OAS valuation model to project residential MSR cash flows over multiple interest rate scenarios, which are then discounted at risk-adjusted rates. The OAS model considers portfolio characteristics, contractually specified servicing fees, prepayment assumptions, delinquency rates, late charges, other ancillary revenue, costs to service and other economic factors. Truist reassesses and periodically adjusts the underlying inputs and assumptions in the OAS model to reflect market conditions and assumptions that a market participant would consider in valuing the residential MSR asset.

Fair value estimates and assumptions are compared to industry surveys, recent market activity, actual portfolio experience and, when available, observable market data. Truist’s enterprise-wide IPV function also compares market data, when available, and information received from certain third-party pricing sources, to MSR fair value estimates, approving tolerance limits determined by IPV for price comparison exceptions, and reviewing significant changes to pricing and valuation policies. Due to the nature of the valuation inputs, residential MSRs are classified within Level 3 of the valuation hierarchy. The value of residential MSRs is significantly affected by mortgage interest rates available in the marketplace, which influence mortgage loan prepayment speeds. In general, during periods of declining interest rates, the value of MSRs declines due to increasing prepayments attributable to increased mortgage-refinance activity. Conversely, during periods of rising interest rates, the value of residential MSRs generally increases due to reduced refinance activity. Truist typically hedges against market value changes in the residential MSRs. Refer to “Note 8. Loan Servicing” for quantitative disclosures reflecting the effect that changes in management’s assumptions would have on the fair value of residential MSRs.

Trading Assets and Liabilities

Fair value measurements for trading securities and securities sold short are derived from observable market-based information including overall market conditions, recent trades, comparable securities, broker quotes and FINRA’s Trade Reporting and Compliance Engine data when determining the value of a position. Security prices are also validated through actual cash settlement upon the sale of a security. When observable market prices are not available, the Company uses judgment and estimates fair value using internal models that reflect assumptions consistent with those that would be used by a market participant in estimating fair value. Refer to “Note 18. Fair Value Disclosures” for further information on the Company’s trading securities and securities sold short.

Truist elects to measure certain loans at fair value for financial reporting where fair value aligns with the underlying business purpose. Trading loans include loans held in connection with the Company’s trading business primarily consisting of commercial and corporate leveraged loans and loans made or acquired in connection with the Company’s TRS business. Other trading liabilities include loans sold, but not yet purchased primarily consisting of commercial and corporate leveraged loans. Trading loans and loans sold, but not yet purchased are valued primarily using quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active by a third-party pricing service. Refer to “Note 18. Fair Value Disclosures” for further information on the Company’s trading loans and other trading liabilities. Refer to “Note 16. Commitments and Contingencies,” and “Note 19. Derivative Financial Instruments,” for further discussion of the Company’s TRS business.

Derivative Assets and Liabilities

Truist uses derivatives to manage various financial risks and in a dealer capacity to facilitate client transactions. Truist mitigates credit risk by subjecting counterparties to credit reviews and approvals similar to those used in making loans and other extensions of credit. In addition, certain counterparties are required to provide collateral to Truist when their unsecured loss positions exceed certain negotiated limits. The fair values of derivative financial instruments are determined based on quoted market prices and internal pricing models that use market observable data for interest rates, foreign exchange, equity, and credit. The fair value of interest rate lock commitments, which are related to mortgage loan commitments, is based on quoted market prices adjusted for commitments that Truist does not expect to fund and includes the value attributable to the net servicing fee. Refer to “Note 19. Derivative Financial Instruments” for further information on the Company’s derivatives.

Goodwill and Other Intangible Assets

The acquisition method of accounting requires that assets acquired and liabilities assumed in business combinations are recorded at their fair values. This often involves estimates based on third-party valuations or internal valuations based on discounted cash flow analyses or other valuation techniques, which are inherently subjective. The amortization of definite-lived intangible assets is based upon the estimated economic benefits to be received, which is also subjective. Business combinations also typically result in goodwill, which is subject to ongoing periodic impairment tests based on the fair values of the reporting units to which the acquired goodwill relates. Refer to “Note 1. Basis of Presentation” for a description of the impairment testing process.

Truist Financial Corporation 85

Effective January 1, 2024, several business activities were realigned reflecting updates to the Company’s operating structure. First, the CB&W segment was renamed CSBB and the C&CB segment was renamed WB. Second, the Wealth business was realigned into the WB segment from the CSBB segment, representing a separate reporting unit in that segment. Third, the small business banking client segmentation was realigned into the CSBB segment from the WB segment. Further, TIH was the principal legal entity of the IH segment. As the operations of TIH were included in discontinued operations prior to the sale of TIH, the Company no longer presents the IH segment as one of its reportable segments.

Following the realignment of these business activities, the Company’s three reporting units with goodwill balances are CSBB, WB excluding Wealth, and Wealth. In conjunction with these realignments, goodwill of $1.7 billion was realigned to Wealth, residing within the WB segment, from CSBB based on the relative fair value of CSBB and Wealth, and goodwill of $220 million was realigned to CSBB from the WB reporting unit based on the relative fair value of the WB reporting unit and the realigned small business banking client segmentation. In addition, the Company completed an assessment of any potential goodwill impairment for all impacted reporting units immediately prior and subsequent to the realignments and determined that no impairment existed. The quantitative valuation of the WB reporting unit performed in conjunction with these goodwill realignments indicated that as of January 1, 2024, the fair value of the WB reporting unit exceeded its carrying value by less than 10%, indicating at the time of the realignments that the goodwill of the WB reporting unit may be at risk of impairment.

Management performs a goodwill impairment analysis on an annual basis as of October 1 or more often if events or circumstances indicate that it is more-likely-than not that the fair value of a reporting unit is below its carrying value. For its annual impairment review, Truist performed a quantitative test of each of its reporting units. The quantitative impairment test estimates the fair value of the reporting units using the income approach and a market-based approach, weighted 50% and 50%, respectively. The inputs and assumptions specific to each reporting unit are incorporated in the valuations, including projections of future cash flows, discount rates, and applicable valuation multiples based on the comparable public company information. The income approach utilizes a discounted cash flow analysis of multi-year financial forecasts developed for each reporting unit by considering several inputs and assumptions such as net interest margin, expected credit losses, noninterest income, noninterest expense, and required capital. The market-based approach utilizes comparable public company information, key valuation multiples, and considers a market control premium associated with cost synergies and other cash flow benefits that arise from obtaining control over a reporting unit, and guideline transactions, when applicable.

Truist also assesses the reasonableness of the aggregate estimated fair value of the reporting units by comparison to its market capitalization over a reasonable period of time, including consideration of expected acquirer expense synergies, historic bank control premiums, and the current market.

The projection of net interest margin is the most significant input to the financial projections of the CSBB and WB reporting units, while noninterest income is the most significant input to the financial projections of the Wealth reporting unit. The long-term growth rate used in determining the terminal value of each reporting unit was 3% as of October 1, 2024, based on management’s assessment of the minimum expected terminal growth rate of each reporting unit. Discount rates are estimated based on the Capital Asset Pricing Model, which considers the risk-free interest rate, market risk premium, beta, and unsystematic risk adjustments specific to a particular reporting unit. The discount rates are also calibrated based on risks related to the projected cash flows of each reporting unit. The discount rates utilized for the CSBB, Wealth, and WB reporting units as of October 1, 2024 were 12.5%, 12.0%, and 10.5%, respectively.

Based on the results of the Company’s annual impairment analyses, the Company concluded that the fair values of the CSBB, WB and Wealth reporting units exceeded their respective carrying values; therefore, there was no goodwill impairment. However, for the WB reporting unit, the fair value of the reporting unit exceeded its carrying value by approximately 10%, indicating that the goodwill of the WB reporting unit may remain at risk of impairment. Circumstances that could negatively impact the fair value for the WB reporting unit in the future include a sustained decrease in Truist’s stock price, a decline in industry peer multiples, an increase in the applicable discount rate, and deterioration in the reporting unit’s forecast.

The estimated fair value of a reporting unit is highly sensitive to changes in management’s estimates and assumptions; therefore, in some

instances, changes in these assumptions could impact whether the fair value of a reporting unit is greater than its carrying value. The valuation of the WB reporting unit as of October 1, 2024 indicated that if the discount rate were increased more than 100 basis points, with other cash flow assumptions unchanged, the reporting unit’s fair value would be less than its carrying value, indicating a goodwill impairment under the income approach. Ultimately, future potential changes in management’s assumptions may impact the estimated fair value of a reporting unit and cause the fair value of the reporting unit to be below its carrying value. Additionally, a reporting unit’s carrying value could change based on market conditions, change in the underlying makeup of the reporting unit, or the risk profile of those reporting units, which could impact whether the fair value of a reporting unit is less than carrying value.

86 Truist Financial Corporation

The Company monitored events and circumstances during the period from October 1, 2024 to December 31, 2024, including macroeconomic and market factors, industry and banking sector events, Truist specific performance indicators, a comparison of management’s forecast and assumptions to those used in its October 1, 2024 quantitative valuations, and the sensitivity of the October 1, 2024 quantitative results to changes in assumptions as of December 31, 2024. Based on these considerations, Truist concluded that it was not more-likely-than-not that the fair value of one or more of its reporting units is below its respective carrying amount as of December 31, 2024.

Prior to the January 1, 2024 realignment of certain business activities described above, the Company also performed quantitative goodwill impairment analyses for its former CB&W and C&CB reporting units as of October 1, 2023. Based on the results of the prior year impairment analyses, the Company concluded as of October 1, 2023 that the carrying values of the former CB&W and C&CB reporting units exceeded their respective fair values, which resulted in a non-cash, non-tax-deductible goodwill impairment charge of $6.1 billion for the year ended December 31, 2023. This prior year goodwill impairment charge was primarily due to the continued impact of higher interest rates and discount rates on the former CB&W and C&CB reporting units, and a sustained decline in the banking industry share prices, including Truist’s through the October 1, 2023 date of the prior year quantitative analyses.

For additional goodwill information, refer to “Note 1. Basis of Presentation” and “Note 7. Goodwill and Other Intangible Assets.”

Income Taxes

Truist is subject to income tax laws of the U.S., its states, and the municipalities in which the Company conducts business. In estimating the net amount due to or to be received from tax jurisdictions either currently or in the future, the Company assesses the appropriate tax treatment of transactions and filing positions after considering statutes, regulations, judicial precedent, and other pertinent information. The income tax laws are complex and subject to different interpretations by the taxpayer and the relevant government taxing authorities. Significant judgment is required in determining the tax accruals and in evaluating the Company’s tax positions, including evaluating uncertain tax positions. Changes in the estimate of accrued taxes occur periodically due to changes in tax rates, interpretations of tax laws and new judicial guidance, the status of examinations by the tax authorities, and newly enacted statutory and regulatory guidance that could impact the relative merits and risks of tax positions. These changes, when they occur, impact tax expense and can materially affect operating results. Truist reviews tax positions quarterly and adjusts accrued taxes as new information becomes available.

Deferred income tax assets represent amounts available to reduce income taxes payable in future years. Such assets arise due to temporary differences between the financial reporting and tax bases of assets and liabilities, as well as from NOL and tax credit carryforwards. The Company regularly evaluates the ability to realize DTAs, recognizing a valuation allowance if, based on the weight of available evidence, it is more-likely-than-not that some portion or all of the DTA will not be realized. In determining whether a valuation allowance is necessary, the Company considers the level of taxable income in prior years to the extent that carrybacks are permitted under current tax laws, as well as estimates of future pre-tax and taxable income and tax planning strategies that would, if necessary, be implemented. Truist currently maintains a valuation allowance for certain state carryforwards. For additional income tax information, refer to “Note 1. Basis of Presentation” and “Note 14. Income Taxes.”

Pension and Postretirement Benefit Obligations

Truist offers various pension plans and postretirement benefit plans to teammates. Calculation of the obligations and related expenses under these plans requires the use of actuarial valuation methods and assumptions, which are subject to management judgment and may differ significantly if different assumptions are used. The discount rate assumption used to measure the postretirement benefit obligations is set by reference to an AA Above Median corporate bond yield curve and the individual characteristics of the plans such as projected cash flow patterns and payment durations.

Management also considered the sensitivity that changes in the expected return on plan assets and the discount rate would have on pension expense. For the Company’s qualified plans, a decrease of 50 basis points in the discount rate would result in additional pension expense of approximately $20 million for 2025, while a decrease of 50 basis points in the expected return on plan assets would result in an increase of approximately $73 million in pension expense for 2025. This estimate reflects the sensitivity of certain factors considered in calculation of pension expense but does not consider all factors that could increase or decrease estimates calculated.

Refer to “Note 15. Benefit Plans” for disclosures related to the benefit plans.

Truist Financial Corporation 87

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