Truist Financial Corporation (TFC) Q4 2025 Earnings Call Transcript

Truist Financial Corporation (NYSE: TFC) Q4 2025 Earnings Call dated Jan. 21, 2026

Corporate Participants:

Brad Milsaps — Investor Relations

William H. Rogers — Chairman & Chief Executive Officer

Mike Maguire — Chief Financial Officer

Analysts:

Ryan Nash — Analyst

John Pancari — Analyst

Scott Siefers — Analyst

Ebrahim Poonawala — Analyst

Ken Usdin — Analyst

Mike Mayo — Analyst

Betsy Graseck — Analyst

Matt O’Connor — Analyst

Gerard Cassidy — Analyst

Saul Martinez — Analyst

Christopher McGratty — Analyst

Presentation:

Operator

Greetings, ladies and gentlemen, and welcome to the Truist Financial Corporation Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this event is being recorded.

It is now my pleasure to introduce your host, Mr. Brad Milsaps.

Brad Milsaps — Investor Relations

Thank you, Betsy, and good morning, everyone. Welcome to Truist’s Fourth Quarter 2025 Earnings Call.

With us today are our Chairman and CEO, Bill Rogers; our CFO, Mike Maguire; our Chief Risk Officer, Brad Bender; as well as other members of Truist’s senior management team. During this morning’s call, they will discuss Truist’s fourth quarter and 2025 results, share their perspectives on current business conditions and provide an updated outlook for 2026. The accompanying presentation as well as our earnings release and supplemental financial information are available on the Truist Investor Relations website, ir.truist.com.

Our presentation today will include forward-looking statements and certain non-GAAP financial measures. Please review the disclosures on Slides 2 and 3 of the presentation regarding these statements and measures as well as the appendix for appropriate reconciliations to GAAP.

With that, I’ll turn it over to Bill.

William H. Rogers — Chairman & Chief Executive Officer

Good morning and thank you for joining our call today.

Before we discuss our fourth quarter and 2025 results, let’s begin like we always do at Truist with purpose on Slide 4. At Truist, our purpose to inspire and build better lives and communities remains at the heart of everything we do. It drives our strategy and fuels our commitment to our clients and the communities we serve. Despite market volatility early in 2025, we stayed focused on supporting our clients and executing our growth and profitability agenda. This discipline drove higher earnings, stronger client relationships and attracted new business.

A key to delivering on our purpose and performance is the investment in our business, markets and teammates. Some of these significant investments include enhancing our tech and digital capabilities in areas like AI and improving the client experience, recruiting and developing talented teammates to advise and serve clients with more complex and industry-specific financial needs, announcing plans to open 100 new insight-driven branches in high-growth markets as well as enhancements to more than 300 branch locations in all markets. These investments underscore our commitment to the communities we serve and position us to deliver more personalized advice and create opportunities for outsized growth. As we enter 2026, our purpose continues to guide our focus on growth, profitability and deeper client relationships. We’re expanding our presence and delivering more differentiated advice-driven experiences. I look forward to sharing more of these priorities during today’s call.

Now let’s turn to Slide 5. We closed 2025 with strong results and clear momentum heading into 2026. We delivered net income available to common shareholders of $1.3 billion or $1 per diluted share for the fourth quarter and $5 billion or $3.82 per diluted share for the full year 2025. These results include certain charges such as severance and an accrual related to a specific legal matter that was settled in the first quarter of 2026, which totaled $0.12 a share for the quarter and $0.18 per share for the year.

At the start of last year, we outlined 5 strategic priorities aimed at accelerating our performance and improving our profitability in 2025 and beyond. While there’s more to accomplish, I’m proud of the progress we made as a company in 2025 and excited about the momentum we have entering this year. First, we continue to generate strong broad-based loan growth in both wholesale banking and consumer and small business banking driven by new loan production and increased client acquisition.

Second, strong loan growth, better second half results in investment banking, trading and wealth, along with continued expense discipline, drove 100 basis points of positive adjusted operating leverage in 2025. Third, we made significant investments across our business in talent and technology, laying the foundation for future growth which we expect to accelerate in 2026.

Fourth, we maintained strong asset quality metrics as net charge-offs declined versus last — versus 2024 and non-performing loans remain relatively stable. Finally, we returned $5.2 billion of capital to shareholders through our common stock dividend and the repurchase of $2.5 billion of our common stock. Our total capital return in 2025 reflects a 37% increase over 2024. Looking ahead, our strategic priorities remain unchanged and our focus clear: accelerate revenue growth, drive greater positive operating leverage, continue to invest while maintaining our expense and risk discipline and return capital to shareholders at an accelerated rate.

Executing on these strategic priorities is central to improving profitability and achieving our long-term goals, including our commitment to deliver a 15% return on tangible common equity in 2027. So in summary, we closed 2025 on a strong note and entered 2026 with significant momentum and confidence in our ability to deliver revenue growth at least twice the pace of 2025, greater positive operating leverage, higher levels of capital return and improved profitability.

Before I hand the call over to Mike to discuss our quarterly results, we want to spend some time discussing the positive momentum we’re seeing within our business segments and with our digital strategy on Slide 6 and 7. First, let me start with consumer and small business banking. CSBB delivered consistent strong performance throughout 2025. As shown on the slide, we generated 5% growth in average consumer and small business loans and 1% growth in average deposits. This momentum was fueled by our market-leading consumer lending businesses, another year of net new checking account growth and deeper relationships with our Premier Banking clients.

Loan growth was broad-based across the portfolio with especially strong contributions from indirect auto and our specialty niche lending platforms, Sheffield, Service Finance and LightStream. These businesses continue to produce market-leading growth with attractive risk-adjusted returns. As part of advancing our consumer lending strategy, we fully integrated our digital end-to-end lending platform, LightStream, into our Truist mobile app experience and our branch banking account opening experience. This expanded scale is improving efficiency, broadening distribution, accelerating growth and meaningfully enhancing the client lending experience.

Beyond our national consumer lending platforms, Premier Banking also delivered strong results with 2025 production up 22% in deposits, 32% in lending and 12% in financial plans. This performance was driven by higher adviser productivity and strong branded mortgage and branch-led lending. We continue to see strong outcomes from our strategic investments in digital, delivering year-over-year growth across all core metrics.

In the fourth quarter of 2025 we added 77,000 digital new-to-bank clients, up 10% from the prior year quarter, capping a solid full year performance with digital production up 9%. We also took meaningful steps to deepen self-service adoption, expanding capabilities within our AI-powered Truist Assist mobile experience. The launch of Ask Truist Assist, our universal search capability, now delivers client quick, intuitive access from any screen. This drove a 97% increase in digital chat engagement in 2025 and is helping us improve efficiency and strengthen client connectivity as more activity naturally shifts to digital.

Let’s turn to wholesale on Page 7. In wholesale, we delivered a strong finish to 2025 driven by meaningful improvement in the second half of the year in both loan and deposit growth, investment banking and trading revenue and continued progress in strategic focus areas such as payment and wealth. We onboarded twice as many new corporate and commercial clients versus last year spanning a diverse range of industries and markets. Building on these new client relationships and our focus on deepening existing ones, we saw our loan and deposit momentum strengthen as the year progressed.

Average wholesale loans increased 3% in 2025 with momentum accelerating in the second half. Fourth quarter average loans were up 8% compared to the fourth quarter of 2024, fueled by new client acquisition and supported by focused talent investments as our strategy continues to gain traction. End-of-period wholesale deposit balances rose 6% linked quarter. While seasonal public funds contributed to this growth, we saw growth from all of our industry banking teams and geographies. Full year investment banking and trading income declined 6% versus 2024 due to first half market volatility.

However, activity rebounded strongly in the second half with fourth quarter revenues up 28% versus fourth quarter of ’24 driven by increased M&A, trading, equity and debt capital markets activity. In wealth, net asset flows remained positive supported by 8.5% increase in new clients last year with almost 30% being generated by CSBB. Wholesale payment fees, which include merchant services, commercial card and treasury management fees rose 8% in 2025. Treasury management fees, a key strategic focus, grew 13% on the strength of new client acquisition and deeper relationships within our existing base. Importantly, our payments pipeline are up significantly year-over-year, positioning us for continued growth in 2026.

So now let me turn it over to Mike to discuss the financial results in a little more detail.

Mike Maguire — Chief Financial Officer

Thank you, Bill, and good morning, everyone.

So before I start with our performance highlights on Slide 8, I do want to briefly mention certain changes to the presentation of our earnings materials today and on a go-forward basis. On January 12, we filed an 8-K detailing changes to the presentation of certain non-interest income and non-interest expense items. Effective December 31, 2025, we changed the reporting line labeled card and payment fees to a new reporting line called card and treasury management fees. This line includes debit card, retail card and commercial card fees, merchant discount fees and treasury management fees. Previously, treasury management fees were included in the service charges on deposits line which we renamed other deposit revenue.

Other deposit revenue includes NSF and overdraft fees and other service charges. We believe these changes more accurately reflect how we’re managing our business and will give investors more insights into how we’re progressing with important fee income-generating initiatives. In terms of expenses, we will no longer disclose adjusted expense in our earnings materials. Instead, we will provide context on material items impacting results.

For today’s discussion, I’ll provide you with adjusted expense for comparison purposes, but going forward, other — or our expense commentary and guidance will be based on GAAP expense. As a result of this change, we moved restructuring charges, which typically included expenses related to severance and facility charges back to their respective reporting lines such as personnel and occupancy expense.

Okay. With that said, I’ll now turn to the full year 2025 and fourth quarter results which starts on Slide 8. We reported 2025 GAAP net income available to common shareholders of $5 billion or $3.82 per diluted share and fourth quarter 2025 net income available to common shareholders of $1.3 billion or $1 per diluted share. Our fourth quarter 2025 results included a charge of $130 million or $0.08 per share after tax due to an incremental accrual related to Truist executing a settlement agreement on January 20, 2026, in the matter of Bickerstaff versus SunTrust Bank. In addition, our fourth quarter results included $0.04 per share of charges primarily related to severance.

Revenue increased 1.1% linked quarter due to 1.9% growth in net interest income partially offset by a modest decrease in non-interest income. GAAP non-interest expense increased 5.2% linked quarter primarily due to the legal accrual and higher personnel expense. Excluding the legal accrual and severance, non-interest expense declined approximately 0.3% on a linked quarter basis. Net charge-offs increased 9 basis points on a linked quarter basis, reflecting normal seasonality in our consumer portfolio. Non-performing loans remained relatively stable on a linked quarter basis. Our CET1 capital ratio declined 20 basis points to 10.8% and our CET1 ratio including AOCI increased 10 basis points linked quarter to 9.5%. During the quarter, we repurchased $750 million of common stock and announced a new share repurchase authorization of up to $10 billion with no expiration date.

Next, I’ll cover loans and leases on Slide 9. Average loans held for investment increased $4.3 billion or 1.3% on a linked quarter basis to $325 million due to growth in both commercial and consumer loans. For the full year, average loans held for investment increased 3.6% to $316 billion due to 5.4% growth in average consumer and card loans and 2.4% growth in average commercial loans. Based on our current pipeline and economic outlook, we expect 3% to 4% average loan growth in 2026. However, average loan growth in 2026 will primarily be driven by growth in commercial loans and other consumer loans, while relatively slower growth in residential mortgage and indirect auto compared with 2025. Other consumer loans, which include our specialty lending businesses, Sheffield, Service Finance and LightStream are expected to grow at a similar pace as these businesses continue to offer attractive risk-adjusted returns.

Moving to deposit trends on Slide 10. Driving client deposit growth is a key priority for Truist and we are seeing improved momentum with clients in both consumer and wholesale. Average deposits were relatively stable on a linked-quarter basis as the decline in higher-cost broker deposits was offset by growth in lower-cost client deposits. This improving mix, along with recent reductions in the federal funds rate, resulted in a 27 basis point decline in average interest-bearing deposit cost to 2.23% and a 20 basis point reduction in our total cost of deposits to 1.64%. As shown in the chart on the bottom right hand of the slide, our cumulative interest-bearing deposit beta improved from 38% to 45% and our total deposit beta improved from 24% to 30% on a linked-quarter basis. These improvements reflect stronger client deposit growth and disciplined efforts to reduce rate paid.

Moving now to net interest income and net interest margin on Slide 11. Taxable equivalent net interest income increased 1.9% linked quarter or $69 million primarily due to loan and client deposit growth and fixed rate asset repricing. Our net interest margin increased 6 basis points linked quarter to 3.07%. For full year 2026, we expect net interest income to increase by 3% to 4%. This outlook is based on 3% to 4% average loan growth which implies low single-digit end-of-period loan growth. We also expect low single-digit end-of-period deposit growth. Average earning assets will grow at a slower rate in ’26 than average loans as average investment securities and other earning assets are expected to decline by 4% to 5% on an annual basis.

Lastly, we expect two 25 basis point reductions in the fed funds rate, one in April and one in July and we will continue to benefit from fixed rate asset repricing. Although we expect modest net interest margin compression in the first quarter, we anticipate full year 2026 average net interest margin will exceed the ’25 average of 3.03% due to the benefits of fixed rate asset repricing and improved earning asset mix and lower deposit costs. As you can see on the right-hand side of the slide, we’ve also updated our fixed rate asset repricing outlook and our swap disclosure.

Turning now to non-interest income on Slide 12. Non-interest income decreased $12 million or 0.8% versus the third quarter of 2025, reflecting modest declines across several fee income categories partially offset by higher investment banking and trading income. Investment banking and trading increased $12 million or 3.7% linked quarter and $335 million, reflecting stronger M&A-related fees partially offset by lower trading activity. Our new reporting line for card and treasury management fees was down slightly linked quarter due to seasonality but grew 3.7% year-over-year as double-digit growth in treasury management fees was partially offset by lower merchant and corporate credit card fees.

Next, I’ll cover non-interest expense on Slide 13. On a linked quarter basis, non-interest expense increased 5.2% driven by higher other expense related to the legal accrual previously mentioned, higher personnel expenses due to increased incentives and severance. These increases were partially offset by lower regulatory costs due to an FDIC special assessment credit. Excluding the impact of the legal accrual and severance costs, non-interest expense declined by 0.3% linked quarter. Adjusted non-interest expense increased 1% in 2025 reflecting our commitment to expense discipline and to driving positive operating leverage during the year.

Moving to asset quality on Slide 14. Our asset quality metrics remained strong on both a linked and like quarter basis, reflecting our strong credit risk culture and proactive approach to quickly resolving problem loans. Non-performing loans held for investment remained stable at 48 basis points of total loans while the ALLL declined 1 basis point to 1.53% of total loans. Net charge-offs increased 9 basis points linked quarter to 57 basis points and were down 2 basis points versus the fourth quarter of 2024. The linked quarter increase in net charge-offs reflects higher C&I and seasonally higher consumer losses partially offset by lower CRE losses. For the full year 2025, net charge-offs declined 5 basis points to 54 basis points.

And now I’ll turn to guidance on — for 2026 on Slide 15. For full year 2026, we expect revenue to increase 4% to 5% relative to 2025 revenue of $20.5 billion driven by 3% to 4% growth in net interest income and mid- to high single-digit growth in non-interest income. We expect full year 2026 GAAP non-interest expense to increase by 1.25% to 2.25% in ’26 versus GAAP ’25 non-interest expense of $12.1 billion. Our ’26 GAAP revenue and expense outlook implies positive operating leverage of 275 basis points in 2026. As I mentioned earlier, our non-interest expense guide will be based on GAAP non-interest expense as we will no longer provide guidance on adjusted non-interest expense going forward.

For comparison purposes, 2026 non-interest expense growth would be approximately 2.35% to 3.35% and operating leverage would be approximately 165 basis points, if you were to exclude the impact of the fourth quarter 2025 legal accrual that I discussed earlier in the call. In terms of asset quality, we expect net charge-offs of about 55 basis points in 2026, which is relatively stable compared with net charge-offs of 54 basis points in 2025. Finally, we expect our effective tax rate to approximate 16.5% or 18.5% on a taxable equivalent basis in ’26 versus 16.4% and 18.9% in 2025.

As it relates to buybacks, we’re targeting approximately $4 billion of share repurchases during the year. Looking into the first quarter of ’26, we expect revenue to decrease approximately 2% to 3% relative to fourth quarter revenue of $5.3 billion. We expect net interest income to decrease approximately 2% to 3% in the first quarter primarily driven by 2 fewer days in the first quarter relative to the fourth quarter and a seasonal decline in public funds deposits.

We expect non-interest income to decline 2% to 3% linked quarter due to lower other income. GAAP non-interest expense of $3.2 billion in the fourth quarter are expected to decrease by 4% to 5% linked quarter due to lower other expense and personnel costs partially offset by higher regulatory costs. If you were to exclude the impact of the fourth quarter 2025 legal accrual, non-interest expense would be flat to down 1% linked quarter. Finally, we’re targeting $1 billion of share repurchases in the first quarter of 2026.

So with that, I’ll hand it back to Bill for some final remarks.

William H. Rogers — Chairman & Chief Executive Officer

Great. Thanks, Mike.

As we close, I want to emphasize the confidence I have in Truist’s direction. We’re seeing tangible results across key businesses with strong momentum in client engagement and revenue growth. As shown on Slide 16, our goal of achieving a 15% ROTCE in 2027 is locked in and reflects our confidence in Truist’s long-term earnings power and strategic direction. We see and have invested in multiple paths to stronger revenue and profitability.

And with disciplined execution, we expect meaningful improvement over the next 2 years. Much of this progress will come from deepening client relationships in consumer and wholesale, especially in wealth, payments, Premier Banking, investment banking and trading, small business and corporate and commercial banking, where momentum is already strong. This is highly accretive to our ROTCE commitment. Our expectation is that our revenue growth will double in 2026 and when combined with our expense discipline should lead to even greater operating leverage and profitability improvement this year.

Like 2025, we entered 2026 in a strong capital position, enabling us to support client growth and accelerate capital return through increased share repurchases. As Mike mentioned, we’re targeting $4 billion of share repurchase this year which represents a 60% increase versus last year.

In summary, I am confident in our future. I’m encouraged by the results and momentum we’re seeing across our company and remain focused on executing with discipline, delivering for our clients and creating value for our shareholders. Thank you to our teammates for their incredible focus, productivity and purpose-driven commitment to moving Truist forward. As always, we appreciate your continued interest and support, and we look forward to updating you on our progress in the quarters ahead.

With that, Brad, let me turn it back over to you.

Brad Milsaps — Investor Relations

Thank you, Bill.

Betsy, at this time, will you please explain how our listeners can participate in the Q&A session? As you do that, I’d like to ask the participants to please limit yourself to one primary question and one follow-up in order to accommodate as many of you as possible today.

Questions and Answers:

Operator

[Operator Instructions] The first question today comes from Ryan Nash with Goldman Sachs. Please go ahead.

Ryan Nash

Good morning, Bill. Good morning, Mike.

William H. Rogers

Morning.

Ryan Nash

Morning. Bill, can you maybe talk a little bit more about loan growth where you ended the year at up 8% year-over-year and you’re guiding to 3% to 4%? And it seems like if you think about the exit run rate, you’re already running at about 3% average growth, so it implies, as you said, low single-digit growth. So maybe just unpack the loan growth a little bit further between commercial and consumer and how are you thinking about growth across each of those areas? Thank you.

William H. Rogers

Yes. Thanks, Ryan. Great to hear from you. Yes, as you noted, we’re entering with some good momentum and if you think about the mix, let me sort of talk about how I think this year will pan out. C&I is — had its sort of strongest quarter. I mean, production was up really, really significantly and just high-quality business, I mean high-quality advice-driven business tied with treasury management, 62% plus had some type of treasury management products are really, really good momentum on the C&I side. I think overall we’re going to really sort of focus on places where we have great client demand, clients still healthy, but we’re going to rebalance a bit, focus on higher client value and optimizing our return and our mix.

And so I think the result of that is going to be a little more wholesale. The consumer businesses like Sheffield and LightStream and Service Finance continue to see great opportunities there probably in areas like indirect auto and some of those, probably a little less in terms of exposure, margins being a little bit tighter, a little bit lower client value. So I think — think about it in 2 ways. One, continuing the momentum and things that have high client value, long-term return characteristics and optimizing that return and mix over time. All of that though contributing to 3% to 4% what I would consider sort of like really, really high-quality, consistent growth. And again, building on momentum that we already have.

Ryan Nash

Got it. And if I can ask a follow-up, Mike, on the net interest margin, I think you noted it would exceed last year’s 3.03%. Given that you’re currently at 3.07%, can you maybe unpack what is included within the margin for deposit pricing? And do you expect the NIM to expand from current levels? And what is the cadence behind that?

Mike Maguire

Yes, sure, Ryan. Yes, so it was nice to see the uptick, obviously, in the fourth quarter, which was largely driven by some of the seasonal deposit mix and some of the benefit of the cuts that will go the other way on seasonality in the first quarter. So while we sort of enter the year at 3.07%, we would expect to back up just a touch. But throughout the course of the rest of the year, we would expect to see margin expansion, especially in the second half where we see the benefit of the cuts. You asked around deposit pricing.

Our expectation coming into the year is, we’ll grind a touch higher on the betas in the first quarter, but we would expect to be in the kind of low 50s neighborhood by year-end. So you’ve got the lower cost of deposits. You’ve also got the fixed asset — the fixed rate asset repricing engine happening in the background as well. And I think those are factors that are going to really help us make really, I think significant progress on the margin relative. I know previously we’ve talked about sort of a 3 teens level in ’27. We’re going to make significant progress towards that level in ’26 and frankly see ourselves exiting ’26 in kind of that 3 teens area, which is I think a really nice setup for 2027.

Ryan Nash

Thank you. Appreciate all the color.

Operator

The next question comes from John Pancari with Evercore. Please go ahead.

John Pancari

Morning.

William H. Rogers

Morning.

Mike Maguire

Good morning.

John Pancari

On your 2027 ROTCE target of 15%, I appreciate your — you reiterated your confidence in the attainability there. And could you possibly help kind of unpack the components that give you that confidence? You mentioned the 3 teens NIM and you might be able to hit that by the end of ’26. Just curious on maybe your efficiency expectations underneath that balance sheet growth, how we could think about the pace there as you approach that in 2027? And then also, I think common equity Tier 1, you’ve alluded to the 10%, but how do you think about capital underneath that 15% ROTCE? Thanks.

William H. Rogers

Yes. Sure, John. So think about it maybe in its simplest term is the concept of holding the denominator of capital and dollars steady and then improving momentum and return from the numerator. So sort of think about that as sort of the basic mantra that we’re operating from. I’ll also say that this is going to be — we see this as more of a straight line. So in addition to 15%, we’re locked in on 14% for this year. So we don’t — this isn’t going to be an all at the end parabolic curve, this is going to be a straight line continued improvement. So again, think about that denominator and dollars holding steady.

And then the part on the numerator that really is accretive and not necessarily in order, but I’ll go down a few of these. Payments is really significant. So think about the growth in payments. We’re seeing a 13% kind of growth. We expect that growth to continue in the double-digit kind of basis. So that’s really accretive to not only deposits but also to NIM and sort of the overall ROA. Our middle market expansion, we — 2x the number of clients we’re seeing in that business. So we see that as really, really positive to that growth. Premier and our wealth production, net asset flows in wealth really positive.

Premier, I talked about the deposit production and loan production sort of those 20-plus percent kind of activity. And then think about all the things that are deepening client relationships in all of those categories. Those are things that are really most accretive because if you think about — we’ve already committed talent. We’ve already committed capital to those businesses and what we’re doing is increasing the return against that. Mike mentioned fixed asset repricing is a component of it. There’s all sorts of RWA maximization efforts to ensure that we’re running our RWA engine really, really effectively.

We talked about the improving operating leverage. So that’s also a component of that as we’ll run this revenue increase off a more efficient platform. And then your point on CET1, we’re building this model on a 10% CET1. I think that’s probably sort of the right ZIP code. And then looking this year to $4 billion in buybacks to accelerate all that. So again, my high degree of confidence is everything I mentioned in there has got momentum against it, initiatives against it. We’re starting nothing flat-footed, everything on our toes, which is why I sort of say locked in for 15%.

John Pancari

Got it. All that’s helpful, Bill. And then staying along the same lines, I mean, no good deed goes unpunished. So you set out that 14%, you gave us the 15% last quarter on 2027, getting a lot of interest now on where you could ultimately go longer term. Your peers are flagging the mid- to upper teens in terms of ROTCE over time. Can you possibly talk about that? Help us frame is Truist positioned to operate in that range? And is that a reasonable range? And how do you think about that timing?

William H. Rogers

Yes. John, our business model, we sort of look at our business model, look at our level of capital. And past 2027, I just — I don’t want to sort of speculate as to what all those things might be. We might be in a different capital position, the business model resulting from the momentum that we’re generating, quite frankly, the economic environment that we might or might not be operating at that particular time. And if you think about it, like for now, the ascension to 15%. So think about we start at 13% going to 15% plus our dividend.

I think that’s a really attractive path to that level. And as we get to the 15% and as we evaluate all the things I just talked about, then we’ll look and see where we are at that particular juncture. I think it’s sort of premature to sort of lay something out there that isn’t as “locked in” as we think we are on the 15%. We want to have confidence when we say a number. We don’t want to sort of be — throw caution to the wind. We want to really be focused just like we are today.

John Pancari

Okay, great. Thanks, Bill.

Operator

The next question comes from Scott Siefers with Piper Sandler. Please go ahead.

Scott Siefers

Morning, everyone. Thank you for taking the question. Let’s see, I think you’ve touched or at least alluded to this briefly a couple of times, but just on the capital markets, I think there’s just plenty of optimism about the industry’s potential this year. That’s, of course, an area where you all have invested really, really heavily. Maybe you could just sort of expand on your thoughts about momentum and potential there for the coming year.

William H. Rogers

Yes. Scott, I think as you pointed out, I mean, this is a business we’ve been investing in for decades. And I think we’re in a really good position. We have really good momentum coming out of the second half of the year and quite frankly, on a lot of cylinders. So debt, capital markets, leveraged finance, M&A, all of our FRM derivatives, FX, all of those things are hitting on really good cylinders. And we come into it with a good pipeline. So we come into it with a good pipeline and not only the pipeline from the investment banking, but really the pipeline that’s generated from our middle market and commercial client base.

I mean probably what I’m most excited about is this organic activity that we’re building. We put talent on the field that really understands how to leverage all of our industry specialties, understands how to leverage our product and capabilities and position those and great advice for our clients with the appropriate teamwork that goes on and the technology that we built to support all that. So part of the double revenue story for us is we think we continue with a low double-figure kind of compound growth in this business.

I mean I have every reason to be confident. It’s organically built. We’ve hired some really good talent. You’ll continue to see that, some really good talent. We’ve developed talent over a long time. We’ve got some senior leaders who’ve been in our business for quite a while. So this is a business I feel really confident in. I think we have a full capability and long-term continued high-growth potential.

Scott Siefers

Terrific. Thank you. Thank you, Bill. And then, Mike, so on capital management, really robust repurchase plans and capacity. I guess as I think about sort of calls on capital or uses of capital, the loan growth outlook seems very prudent. You’ve got some things accelerating while you sort of dial back others. So I would guess the overall repurchase plan is a very sturdy one. But just as you think about the coming year, any factors that would cause you to toggle down or up that pace of repurchase to get to the sort of net $4 billion?

Mike Maguire

Yes. Scott, again, the way we’re thinking about this is we believe that, that 10% operating target or level is appropriate. We’ve sort of laid out a trajectory that gets us there by the end of ’27. And so there are going to be moving parts as we go. If loans or the balance sheet grows a little faster one quarter versus another or we make a little more, a little less money one quarter versus another, and of course just the overall, I guess, economic backdrop, you wouldn’t want to dismiss. But in a stable operating environment, we’re going to trend to that 10% over the next 8 quarters. So if you look at the math, that gets you to about $1 billion a quarter this year, frankly, perhaps maybe a touch higher. And so that’s really how we’re thinking about it. It’s just kind of retrending to 10% during that period.

Scott Siefers

Got you. Okay, perfect. Thank you, guys, very much.

Operator

The next question comes from Ebrahim Poonawala with Bank of America. Please go ahead.

Ebrahim Poonawala

Good morning.

William H. Rogers

Morning.

Mike Maguire

Morning.

Ebrahim Poonawala

Two questions. One, I think just on deposits, talk about, like do you expect both as you move towards this wholesale mix on the lending side, what does that mean for deposits and deposit growth as we look forward, both in terms of the mix? So when we think about DDA non-interest-bearing balances and just the pace of overall deposit growth, do you think that kind of shifts for growth and how strong could it be? Thanks.

William H. Rogers

Yes. Ebrahim, you’re not talking about this. If you think about where we were a year ago with loans, can we build the momentum and sort of the asset-generating part of our franchise, and you see us deliver on that and then we pull that into this year and we pull that in the momentum and we optimize that. I think we’re at the exact same place on deposits. I mean we’re sort of same place. We’re building that momentum. We’re building that consistency. It’s part of core to what we do.

And then I look at the leading indicators on deposits and sort of think about, okay, what should give us confidence that we have deposit growth? First, I think there’s been — for the industry, so a little bit of a natural tailwind with QE and lower rates. I’ll just sort of put that on one side. But then idiosyncratic and specific to us, think about the momentum. We saw wholesale deposits grow 400 basis points faster in the latter part of 2025 versus ’24.

I mentioned earlier, 62% of our new clients came with deposits and we’ve had two times the number of clients. So we have a lot more clients, a lot more clients with treasury management products. And some of those are still funding. So they’re in the funding base. So deeper penetration in the middle market base. We still have some loan-only clients that we’re penetrating in that base. So in addition to the new, we look at the back book. End-of-period client deposits, we’re up almost $7.5 billion. The other leading indicator is that treasury management fees, up 13%.

And then you go to the consumer side, and we look at sort of the leading indicators there. And the first is net new. So we’re adding net new clients, and the quality of those clients has increased year-over-year. So the amount of deposits that they’re bringing to us increases year-over-year. The focus on Premier, I talked about the deposit production being up significantly in Premier.

The amount of off us deposits from our Premier client base is actually quite significant. So their capacity to use great tools to approach those clients has been really significant. Technology, digital account opening of branches, branch expansion, more marketing related to deposit generation, deposit generation in expansion markets for us like Texas and Pennsylvania. So just my net summary is we have really good momentum in the deposit side. And Mike sort of outline the deposit and loan correlation for this year. So we feel good about deposit growth, we feel good about that opportunity headed into this year.

Ebrahim Poonawala

That’s good color, Bill. Thank you. And I guess maybe just a separate question around the wholesale strategy. On paper, $0.5 trillion balance sheet, you’ve been in investment banking for a long time. Truist should be winning in terms of when we think about fee revenue growth, financing. Just give us a sense, one, does — do some of the changes by the OCC around leverage lending, does that create a slightly better opportunity to compete in terms of risk-adjusted returns? And remind us where you think the sweet spot for Truist is on the wholesale/capital market side. Is it against the Wall Street banks? Is it against middle market investment banks? Would love some color there. Thank you.

William H. Rogers

Yes. Let me try to unpack that question. So on the leverage lending specifically, remember, that’s been a core competency for us for a long time. So I don’t see the guidance significantly changing our approach. Maybe there’s something around the edge or that not, but we’ve been good in that business for a long time. And as you know, it’s a really strong driver of our investment banking business as well. So I think sort of steady as she goes, continue on that front. And then in terms of our competitive position, the answer is to both. It really relies on a couple of things.

I mean, I think what we want to be is sort of a couple things. One is the Premier middle market investment bank. So think about that as sort of like the high bar in terms of standard and then really focused on places where we have specialization and a really strong right to win. So think about those combinations. So core middle market, leveraging our franchise. I mentioned earlier I’ve been really excited about the teamwork, the team that we have on the field, the training we put in place, the partnerships we have, the new talent we have that really know how to leverage the tools and capabilities for our sort of core commercial and middle market clients. And then anywhere on a specialty business, we have the right to win against anybody along that spectrum. I hope that clarifies it.

Ebrahim Poonawala

Yes, that’s good color. Thanks, Bill.

Operator

The next question comes from Ken Usdin with Autonomous Research. Please go ahead.

Ken Usdin

Hey, thanks. Good morning. Mike, just coming back to a prior comment you made, Bill had mentioned getting to the 3 teens NIM by year-end ’26. And you had mentioned kind of remixing average earning assets with loans growing and some of the other categories coming down as an offset. So I guess just wondering how you expect average earning assets to traject off of the mid-480s exit? And also, like where’s your landing spot in terms of securities and cash as a percentage of total assets as you do that remixing? Thanks.

Mike Maguire

Yes. Sure, Ken. If you think back to ’25, you’ll remember throughout the course of the year we brought the securities portfolio down really in the second half of the year from, I think, maybe the $125-ish billion ballpark down to the $117 billion, $118 billion. And so we would actually, I think, expect that to be relatively consistent in ’26 at that $117 billion, $118 billion level. And so if you just do that sort of math on the year-over-year average, you’ve got essentially the securities and a few of the other earning assets categories down that 5% to 6%. So you couple that with the loan growth in the 3% to 4% area, you get to maybe, I don’t know, ballpark, half that growth rate for earning assets.

Now the good news is, at half the earning asset growth rate of loans coupled with net interest margin expansion, that’s what sort of gets you to the 3% to 4% outlook on NII for the year. In terms of mix, we’ve — I think, relatively stable again is kind of how we exit ’25. So we think about sort of the securities and cash combined in the $140 billion to $150-ish billion area. And so I think you’ll see us there. That helps us sort of more than satisfy our sort of Lab and ILST requirements and we think it’s sort of the right sort of place on the efficient frontier from an earnings perspective as well.

Ken Usdin

Okay. Got it. And then on — and just on that updated slide you gave us on the fixed rate repricing and the swaps book, you still obviously have a lot of forward starting swaps relative to the size of the portfolio. Can you just help us understand like how that layers in? And how much of a benefit will just the former drag be in terms of a year-over-year helper this year, from the swaps? Thanks.

Mike Maguire

Sure. In terms of the active receivers, Q3, Q4 was actually flat around $50 billion. And you see that sort of gradually phase in throughout the course of ’26. So I think we go to like $57 billion, $58 billion in the first quarter, then to $80 billion and $100 billion. I think we end the fourth quarter a little over $100 billion. So you do have a much more significant proportion of the swaps effective. Now at the same time, at least based on forwards, you’ve got the policy rate lower at almost sort of similar rate.

So what — you start the year with less notional active out of the money, you end the year with more notional active and even slightly in the money. So the answer to your question on like what’s the impact year-over-year, is it’s a helper? Top of my head, maybe it’s $100 million. But obviously, that’s just one component of the balance sheet. And so you’re thinking about with the policy rate lower 50 basis points, at least as we see it, you’ve also got the floaters, the cash loans, et cetera, going the other way. So all that gets taken into consideration in our outlook and how we’re positioned.

Ken Usdin

Okay. Thanks, Mike.

Operator

The next question comes from Mike Mayo with Wells Fargo. Please go ahead.

Mike Mayo

Hi, lot of talk about NIMs and returns and I was more focused on growth, and I know you’re not satisfied with the growth and that you expect growth to be 2x in 2026 than 2025. So directionally, I think you’re moving where you want to be. But when you give your revenue guide of 4% to 5%, that seems kind of in line, maybe below a couple peers for 2026, yet the population growth in your footprint is, what, 2x? So I’m just wondering — and you’re talking about the momentum you have in a lot of businesses for that growth, but do you need to increase your investments even more than you’re already doing just to keep up with the bigger banks that are increasing their investments? And the 100 new de novo branches, why now? Where are they going to be? It’s just a contrast versus in the prior 5 years of the merger when you’re closing a lot of branches. Thank you.

William H. Rogers

Yes, Mike, I think your basic question is, are we investing enough? And are we investing in the right places for growth? Let’s sort of start with the concept of, as you pointed out, we’re doubling revenue. So we are building momentum, building capacity to move forward. So the investments that we’ve made are reflected in that doubling of revenue. So let’s sort of start as that premise is we are making investments that are mattering. The things that are — I would consider to be significant, accretive market share, accretive kind of growth. If you think about investment banking, treasury management sort of in these low double-digit kind of categories, I mean, I think those are reflective of the fact that we’re growing disproportionately and taking advantage of the opportunity that we have with our client base and with our markets.

And then when we unpack the expenses and unpack sort of where we’re investing, it’s a netting process. So remember, we’re also continuing to create efficiencies in the company. So when we look at our overall expense level, that’s a net number. We’re creating efficiencies that not only came out of the merger but really came out of the work that we did in the end of 2023 when we — as you duly noted, by the way, when we needed to really bend the expense curve, we bent that significantly, but we’re still harvesting some of those savings. And then we look at the risk infrastructure that we built at our company, that’s been a really significant part of the expense growth base over the last several years.

While that will continue to be high and appropriately so, the rate of increase will low — will lower. So again, creating efficiencies to redeploy in things that matter. And then you’ve seen the things that we’re investing in, I mean, go down the list, investment banking, talent, corporate banking, all the investments we’re making in wholesale payments. I mean we’re rolling out literally new products and capabilities every month. You’ve seen the investments we’re making in digital, the growth we’ve seen in digital, marketing, Premier Banking, deposit growth, tech investments to create efficiency and effectiveness.

And then on the branch side, this is a long-term game. So this isn’t a quarter-by-quarter game. So for the past 6 years, we’ve effectively not invested or added net new branches into our branch network. So as the population shifts in our markets, as our focus gets really clear on things like Premier, we’re going to open these branches in places that have the highest return for our franchise long term. So think about expansion markets, think about Texas in terms of examples, think about market demographics that have changed in markets like South Florida and markets like Atlanta where we’ll continue to invest.

And then overall, in all of our markets, refurbishing. So I’m very confident that we’re investing in the things that are delivering results, and I think you see that in the momentum we’re building. And then we’re putting a stake in the ground for continued momentum, doubling that revenue and creating this 15% return which obviously has those characteristics attached to it. So I’m satisfied and excited about the opportunities. And then put on top of that AI, other efficiencies and other opportunities, we’re going to open up the aperture to continue to invest even more and with lots of clarity. We know the next place to invest, the next dollar to save, the next dollar to invest with a lot of clarity. Thanks, Mike.

Mike Mayo

And then — yes, sure. And just, you keep mentioning the 15%. Seems like you’re really hyper focused on the 15% return. Is that for the year 2027? Or is that reaching 15% at some time in ’27?

William H. Rogers

The year.

Mike Mayo

For the year 2027?

William H. Rogers

Yes.

Mike Mayo

Okay. And is that — I guess that’s not a final destination. When you announced the merger 7 years ago, you were talking over 20%, so I imagine you’d want to go higher after that.

William H. Rogers

Yes. I mean, different business model, in fairness, right. When we announced the merger, we had different businesses that had different return characteristics. So I think that — as I answered previously, I mean, 15% is not the final destination, but the path from here to 15% is actually quite attractive from a shareholder perspective.

I think as we get closer to that 15%, as we understand, as I mentioned before, economic environment, business model, where we see momentum, where we see a chance to put our foot on the accelerator, what we’re seeing, the return on the branch investment, just talking about that as an example, then we’ll start to hone in a little bit better about where that next stage of the destination is. I think — I’m careful in saying final destination. I mean I don’t think there’s a finish line. I mean I think we’re sort of constantly want to be improving and moving forward. The 15% was just to declare from here to there and the slope is, I think, actually quite positive from a shareholder perspective.

Mike Mayo

All right, thank you.

William H. Rogers

Yes, thanks.

Operator

The next question comes from Betsy Graseck with Morgan Stanley. Please go ahead.

Betsy Graseck

Hi, good morning.

William H. Rogers

Morning.

Betsy Graseck

Just continuing along those lines, the question I have is just trying to understand how the efficiency ratio trajects as you manage through this process of driving up ROTCE and specifically also looking to understand the impact of the severance that we had this quarter when that flows through into the P&L, from a head count perspective. And how do you see head count trajecting and the efficiency ratio trajecting as you move towards the 15%? Thank you.

Mike Maguire

Betsy, it’s Mike. I’ll get us started. So on the efficiency ratio, look, we do expect to see sort of incremental improvement over the course of the next couple of years. I think that kind of mid-50s area is probably a reasonable expectation that’s lined up to improving. Bill sort of talked about the numerator and sort of more throughput, more sort of, I’ll call it, capital-efficient revenue. That’s going to drive our ROA higher with sort of a similar level of capital over time. So gets you to that kind of off that 1% ROA higher and more in line with what it’s going to take to get to that 15% level.

In terms of severance, the charges we took in the fourth quarter would have been related to actions in the fourth quarter. FTEs, there’s a little bit of noise in that, Betsy, because we’ve got contractor conversions happening, we’ve got head count coming in, coming out. So in fact, you might actually see head count higher throughout the course of a year as we move from contractor to full-time employees. Now cost per FTE would go down, assuming we do a good job executing that strategy. And we can maybe throughout the course of this year, maybe give you a little bit more detail around how that’s playing out.

Betsy Graseck

Okay, thank you.

Operator

[Operator Instructions] The next question comes from Matt O’Connor with Deutsche Bank. Please go ahead.

Matt O’Connor

Good morning. Little bit of a follow-up on the last question here. Just as you think about the restructuring and severance costs for ’26, do you think there’ll be anything meaningful? I think there was about $150 million this year. And I appreciate the guidance on a reported basis. Just trying to adjust for some of these items and see what the underlying operating leverage is. Thanks.

Mike Maguire

Yes. Got it, Matt. Look, I mean, first of all, appreciate the comment on sort of going to GAAP. This is something that we’ve gotten some good feedback on from investors and think it’s going to be a more simple way to present our results. At the end of the day, the restructuring charges and sort of thinking about the — originally, you recall, sort of the MRCs, they’ve just become sort of less significant relative to our overall story. That doesn’t mean they’ll go away. Obviously, we’ll continue to have severance expense. We’ll continue to have facilities-related charges and the like. But I do think that there is an opportunity and an expectation that they’ll be lower over time. Difficult to necessarily forecast just given their nature. We do have an expectation that they’ll be lower in ’26 modestly. And again, it’ll be sort of up to us to do a great job trying to create more opportunity there and beyond. So hopefully, that helps.

Matt O’Connor

Thank you.

Mike Maguire

Yes.

Operator

The next question comes from Gerard Cassidy with RBC. Please go ahead.

Gerard Cassidy

Morning, Bill. Good morning, Mike. Can you share with us, Bill and Mike as well? I guess, obviously, the outlook for yourselves and your peers this year looks really strong based upon the outlook for the economy, the yield curve, loan demand’s picking up across the board. And if you have to look around corners, aside from the big geopolitical risks we all see, what are you guys keeping your eye on that could kind of surprise us later in the year? Because, again, the outlooks across the board look pretty darn good.

William H. Rogers

Yes, Mike, we can each talk about what keeps us up at night. So in terms of looking around corners, I mean, Gerard, I think this is what we get paid for. We look around a lot of corners. We stress for a lot of things within the business environment. I think to your — point of your question, if you sort of said, number one, would be a more macro concerns and issues, does the economy hold up? Are we able to deploy all our strategies and our initiatives against the backdrop of an expanding and growing economy? So I sort of start with that because on the micro side, I feel really confident about the things that we’re doing.

So in terms of looking around our own corners, again, we’ll stress for everything. We’ll stress for credit, we’ll stress for idiosyncratic things, we’ll stress for geographies, specialties, all that kind of stuff. So we’re always going to be looking at it. But given the diversity of our franchise, those aren’t my number one concerns. They really are on the macro. Do we have the overall capacity to grow our business? And right now, the client sentiment’s pretty good.

And I would say in the macro, if you break it down, my probably number one focus is employment. If I look at a number every day is employment. The index of risk to financial services, I think we all learned in the financial crisis was related to employment. So that’s what I say really focused on will businesses still be confident to continue to hire, if consumers are confident that they have a job or can get a job or have a job and a gig job, then that confidence will stay and elevate it. So most of mine are macro. Mike, you might have.

Mike Maguire

Yes. I mean this might err a touch too tactical, but I mean one thing that’s on our minds here is credit spreads are still at tights. And so that’s, I think, sort of the longer that stays that way that, in some respects, is a risk that we’re absorbing. We talked a little bit about just the competitive nature of things, right? It’s a fierce marketplace. And so we should all be up at night worrying about that. But Bill, I think you covered it well.

Gerard Cassidy

Thank you.

Operator

The next question comes from Saul Martinez with HSBC. Please go ahead.

Saul Martinez

Hey, good morning. Thanks for taking my question. I just have a real quick one follow-up to Matt’s question. Just to clarify, Mike, the guidance implies 12 — call it, $12.2 billion to $12.3 billion of expenses. That does have some level of restructuring expenses embedded in it that are maybe slightly lower than this year. Is that right? Because obviously if it doesn’t, it would imply something like 3.5% to 4.5% growth versus the adjusted number based on how you have been doing it. So I just wanted to clarify that.

Mike Maguire

Yes. No, that’s right. The outlook, so the 1.25% to 2.25% off the GAAP base includes what previously would have been outlined as restructuring charges or severance. In ex legal, that would be closer to 2.3% and 3.3% year-over-year.

Saul Martinez

Okay. All right. So it does include a similar number than this year. Okay. All right. I just wanted to make sure. Thank you.

Mike Maguire

Yes. Lower, sorry, just to clarify.

Saul Martinez

Yes. No. Understood. A little bit lower. Understood.

Operator

The last question today comes from Chris McGratty with KBW. Please go ahead.

Christopher McGratty

Great. Good morning. If I look at Slide 6, it looks like you grew net new checking accounts about 72,000 during the year. I guess 2 parts. Do you have that number for 2024? And then more broadly, consumer and small business checking accounts were modestly negative year-on-year. I’m interested in kind of the impact of the branch openings in reversing this and when you might start to see a kind of a tangible progress in those trends. Thank you.

William H. Rogers

Yes, Chris, the net new in 2024 was about 100, if I’m going to sort of go from memory, so like right in that zone. But as I mentioned earlier, the quality of the 70-plus this year is much higher. So higher average deposit in those. And what we’re seeing also is our pull-through is really higher with that. So the quality is really, really strong. And the diversity of where it comes from, so it comes from the digital channels. I talked about the significant investment there and also the branch network. And that leads to the — to your next question is sort of about, what are we going to see from the branch investment or employment?

Keep in mind, we’re just getting started. So like that data will come, we’ll talk more about that. But the capabilities that we have now in our branches, I think some of the models that we used to use, I think we can sort of bend some of those curves because our ability to open accounts digitally in branches do more in a branch than we could do before, I think allows us to have a little more confidence in the return characteristics of those investments. But that’s too early to tell right now. So we’re building the models. We’re getting started, great site selection, great markets and we’ll keep you updated on where we go there. But overall, net new is — continues to be strong and the quality is improving.

Christopher McGratty

Great. Thanks, Bill.

William H. Rogers

Yes.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over for any closing remarks.

Brad Milsaps

Okay. Thank you, Betsy. That completes our earnings call. If you have any additional questions, please feel free to reach out to the Investor Relations team. Thank you for your interest in Truist and we hope you have a great day. Betsy, you are now free to disconnect the call.

Operator

[Operator Closing Remarks]