Truist Earnings: Strong Fee Income Guidance for 2026, but Loan Growth Guidance a Bit Soft

Key Morningstar Metrics for Truist Financial

What We Thought of Truist Financial’s Earnings

Truist Financial’s TFC strong investment banking fee year-over-year growth of 28% helped its top-line growth in the fourth quarter of 2025. Full-year 2025 results translated into a return on the tangible common equity ratio of 12.7%. The bank expects mid-single-digit to high-single-digit growth in 2026 fees.

Why it matters: Compared with peers that have reported, loan guidance growth at Truist is a bit soft, particularly given that Truist’s Southeast footprint has higher population growth. Management guided 2026 average loan balances to grow 3%-4% and year-end balances to grow by low single digits.

• The bank expects net interest margin expansion in 2026, mostly driven by fixed asset repricing, mix shift in earnings assets, and lower funding costs. While we were previously expecting some NIM expansion in 2026, our assumption on fixed-rate asset repricing was more modest compared with the current guidance.
• Taken together, the bank expects around 3%-4% growth in net interest income in 2026 and expects its NIM to exit 2026 in the 3.10%-3.19% range.

The bottom line: As we incorporate the bank’s latest results and updated guidance, we expect to increase our $46.10 fair value estimate for no-moat Truist by mid-single digits, mostly driven by higher net interest income growth and fee income growth in the near term. We view shares as slightly overvalued.

• We think the bank has a viable path to achieve its 15% return on tangible common equity in 2027 if the bank can continue to deliver positive operating leverage and if the macroeconomic environment supports more credit cost improvement in 2027.
• That said, our midterm forecast calls for a low-teen ROTCE profile for Truist, as we forecast normalization in credit costs, and we think the bank’s investment in branches, personnel, and technology will keep its longer-term expense growth around 3%, which is higher than its 2026 guidance range of 1.25% to 2.25%.