Truist lends to households and businesses and earns fees from payments, investment banking, and wealth services. In the third quarter of 2026, profit available to common shareholders fell 49% to $684 million as a securities loss outweighed a benefit from selling its Regional Acceptance auto-loan portfolio. The sale helps Truist reduce credit risk and borrowing, but it also removes interest income. Its continuing banking businesses now have to turn stronger deposit gathering into faster profit growth.
Research cutoff: October 29, 2026, New York date. Financial results cover the quarter and nine months ended September 30; management plans discussed below were announced on October 16, with subsequent-event information checked against the October 28 filing.
1. The profit decline largely reflects a deliberate change in the balance sheet
Truist accepted a large securities loss while exiting an auto-lending business that had produced little profit. The purpose was to simplify the bank and release resources for its main businesses. Mike Lyons, who became chief executive on August 31, described a focus on technology, talent, products, and deeper customer relationships.
The earlier sale announcement provides an important test of that decision. Regional Acceptance, or RAC, had been approximately at pretax break-even during the first six months of 2026. Selling its loans therefore removed substantial lending exposure without giving up a strongly profitable business on that historical measure. That is a more specific reason for the exit than simply wanting a smaller loan book.
Sources: Truist third-quarter 2026 Form 10-Q, MD&A, “Executive Overview,” p. 49; September 15, 2026 transaction announcement, transaction overview and financial impact.
Truist also sold longer-duration, lower-yielding mortgage securities and bought shorter-duration securities with higher yields. The sold portfolio had approximately $8.6 billion of book value. The replacement purchases were approximately $7.2 billion. The resulting $1.447 billion pretax loss reduced revenue because banks report securities gains and losses alongside fee income.
The loan sale moved profit in the other direction. Once the RAC loans were transferred for sale, Truist released $581 million of remaining credit-loss reserves. A reserve is an accounting allowance for expected future losses, not cash set aside in a separate account. Removing loans from the bank also removes the need to retain their remaining allowance. The transaction separately caused a $66 million loss in other income and $40 million of expenses.
These effects explain why the reported revenue collapse says little about changes in customer fees by itself. They are nevertheless real results of management's decisions and belong in the starting comparison.
| Consolidated reported results, USD millions except EPS | Third quarter 2025 | Third quarter 2026 | First nine months 2025 | First nine months 2026 |
|---|---|---|---|---|
| Net interest income | 3,629 | 3,663 | 10,723 | 10,883 |
| Revenue | 5,187 | 3,747 | 15,073 | 14,164 |
| Noninterest expense | 3,014 | 3,105 | 8,906 | 9,143 |
| Credit-loss provision; negative means benefit | 436 | -253 | 1,382 | 621 |
| Pretax income | 1,737 | 895 | 4,785 | 4,400 |
| Net income | 1,452 | 799 | 3,953 | 3,833 |
| Profit available to common shareholders | 1,348 | 684 | 3,685 | 3,580 |
| Diluted EPS, USD | 1.04 | 0.56 | 2.82 | 2.88 |
Reporting basis: Revenue is net interest income plus noninterest income, without a taxable-equivalent adjustment. Net interest income is interest earned minus interest paid to depositors and other funders. Noninterest expense covers operating costs such as staff and technology. A credit provision adds to expected-loss reserves; a benefit reverses part of them through profit. Common-shareholder profit deducts preferred dividends and related amounts. EPS is earnings per common share; diluted EPS includes shares that awards could add.
Source: Third-quarter 2026 Form 10-Q, consolidated income statement, p. 5, and MD&A Table 1, p. 50.
2. Removing the transaction effects reveals only modest operating improvement
Adjusted profit improved, but lower credit costs and fewer shares did more than revenue growth to help the comparison. Management's adjusted common-shareholder profit was $1.423 billion, 5.6% above the prior-year quarter. Adjusted EPS rose 11.5% to $1.16 because the diluted share count also fell 5.4%.
A useful way to test the continuing earnings engine is to subtract operating expenses from revenue before credit provisions and taxes. After removing the disclosed sale effects, this amount increased only $22 million, or 1.0%, to $2.195 billion. The calculation below retains the GAAP interest-income basis, so it excludes management's tax-equivalent uplift.
| Third-quarter earnings test, USD millions | 2025 reported | 2026 reported | 2026 excluding specified sale effects |
|---|---|---|---|
| Revenue | 5,187 | 3,747 | 5,260 |
| Noninterest expense | 3,014 | 3,105 | 3,065 |
| Revenue less noninterest expense, calculated | 2,173 | 642 | 2,195 |
| Credit-loss provision; negative means benefit | 436 | -253 | 328 |
| Pretax income | 1,737 | 895 | 1,867 |
| Income tax expense | 285 | 96 | 329 |
| Profit available to common shareholders | 1,348 | 684 | 1,423 |
Calculation notes: The final column is non-GAAP. It reverses the $1,447 million securities loss, $66 million RAC sale loss, $40 million RAC costs, and $581 million reserve benefit, using the disclosed tax effects. The complete after-tax bridge appears in the end notes. The prior-year quarter had none of these adjustments.
Sources: Third-quarter 2026 Form 10-Q, pp. 5 and 49–54; October 16 earnings presentation, slide 6 and appendix A-3, for transaction tax effects and adjusted common profit.
The $108 million reduction in credit provisions, after removing the RAC reserve benefit, mattered much more than the $22 million operating improvement. Some reserve releases remained in the commercial-property portfolios. Higher pay, benefits, and incentives in revenue-producing businesses pushed personnel costs upward. Lower “other expense” partly offset this through reductions in amounts previously set aside for non-fraud operating losses. Consequently, this adjusted comparison is useful for separating the transactions, but it is not a pure measure of repeatable customer earnings.
Taxes softened the reported profit decline. The quarterly effective tax rate fell from 16.4% to 10.7%. Truist explains that the securities loss reduced pretax income, making tax credits and other tax-advantaged activities larger relative to the remaining profit. That lower reported rate should not be applied automatically to a normal quarter's earnings.
The nine-month figures also show why EPS needs its share-count explanation. Common-shareholder profit fell 2.8%, yet diluted EPS rose 2.1%. Repurchases spread the remaining profit across fewer shares; they did not increase total business profit.
Source: Third-quarter 2026 Form 10-Q, Note 4, pp. 18–19; Note 15, p. 45; MD&A, expenses and income taxes, pp. 54–55.
3. Deposit gathering is supporting earnings, but customers still demand competitive rates
Growing deposits helped protect interest earnings while loan yields declined. Quarterly interest income fell $256 million from a year earlier. Interest expense fell $290 million, leaving net interest income $34 million higher. Truist therefore earned slightly more from the difference between lending and funding rates even though gross interest income was lower.
Average deposits rose 3.6% to $410.7 billion. Their average cost fell from 1.84% to 1.59% year over year. However, deposit cost increased from 1.56% in the second quarter, and average noninterest-bearing deposits fell both sequentially and year over year. Much of the recent growth came from interest-paying checking accounts. Customers supplied more funding, but the bank had to pay for much of it.
Truist's tax-equivalent net interest margin was 3.00%, compared with 3.01% a year earlier. This measure shows interest earnings after funding costs relative to average earning assets; the tax-equivalent adjustment puts certain tax-exempt income on a comparable pretax basis. The nearly unchanged margin shows that lower funding costs largely offset lower asset yields, rather than creating a large new earnings advantage.
Source: Third-quarter 2026 Form 10-Q, MD&A, net interest income and rate/volume tables, pp. 51–53; Table 18 and funding discussion, p. 66.
The segment results identify where the customer growth occurred. Wholesale Banking's average deposits rose 9.8% and its average loans held for investment rose 4.5% year over year. Yet segment profit fell 3.2% to $1.048 billion. Lower loan spreads, additional credit costs, and higher spending absorbed the benefit of more business and fees. The bank was winning balances without producing proportionate profit growth.
Consumer and Small Business Banking's profit doubled to $1.276 billion, but the RAC reserve release makes that an unsuitable measure of ordinary growth. Its average deposits grew 1.2%, while average loans fell 2.4%. Internal payments for funding also shift interest income between these segments and the corporate center. Their profits must therefore be read with the corporate-center loss and intersegment eliminations, which reconcile to consolidated net income.
Fee businesses provide a more promising, though uneven, source of growth. Wealth-management income rose 8.8% to $407 million, primarily because of favorable market performance. Some investment-management fees are charged as a share of customers’ managed assets, so higher account values can lift fees without the same growth in customer numbers. Investment-banking and trading income was almost unchanged at $324 million for the quarter, despite stronger growth over the first nine months. Market-linked fees can expand without equivalent loan growth, but the quarter does not yet show broad fee acceleration.
Source: Third-quarter 2026 Form 10-Q, Note 16, pp. 46–48; MD&A Tables 3 and 6 and segment discussion, pp. 53–57; 2025 Form 10-K, Note 1, revenue recognition for wealth-management services.
A regional competitor provides useful context. PNC reported sequential growth of approximately 2% in net interest income and average loans, and 1% in average deposits in the same quarter. Truist's average loans held for investment fell 1.1% sequentially, reflecting the RAC sale and lower commercial-and-industrial balances. PNC's acquisition of FirstBank changes its year-over-year scope, so its growth is not a clean annual benchmark for Truist. The narrower lesson is that Truist's shrinking loan balance reflects its own portfolio choices as well as the lending environment.
Sources: PNC third-quarter 2026 results, October 15, quarterly highlights and integration discussion; Truist Form 10-Q, Table 7 and lending discussion, p. 58.
Truist is also investing in servicing other lenders' mortgages: collecting payments and administering loans for a fee. It spent $755 million buying residential mortgage-servicing rights during the first nine months, versus $182 million a year earlier. Residential servicing fees increased to $516 million from $464 million. This supports a business that earns fees without owning every underlying loan, although customers refinancing early can shorten the fee stream.
Source: Third-quarter 2026 Form 10-Q, consolidated cash flows, p. 8, and Note 6, p. 26.
4. The credit improvement is real, but selling loans changes what the ratios measure
The RAC exit removed troubled loans, while some commercial credit measures worsened. Nonperforming loans—loans on which the bank generally stops recording interest because collection is doubtful—held for investment fell to $1.293 billion from $1.692 billion at June 30. Indirect-auto nonperforming loans fell $468 million, while commercial-and-industrial nonperforming loans increased $76 million. The improvement was concentrated in the portfolio Truist was exiting.
The sale also caused $251 million of charge-offs when RAC loans were transferred to held-for-sale status. A charge-off reduces the recorded loan balance and uses the allowance already established for losses. Total third-quarter net charge-offs were $629 million, or an annualized 0.77% of average loans, compared with 0.48% a year earlier. The sale-related write-down therefore raised current losses even as the exit improved the remaining loan portfolio.
To understand the reserve change, both write-offs and provisions have to be counted. The full allowance for credit losses includes the allowance against funded loans and a separate reserve for lending commitments that customers have not yet drawn.
| Credit-loss allowance reconciliation, USD millions | Third quarter 2026 | First nine months 2026 |
|---|---|---|
| Opening total allowance | 5,316 | 5,347 |
| Provision; negative means benefit | -253 | 621 |
| Charge-offs less recoveries | -629 | -1,534 |
| Other changes | -1 | -1 |
| Closing total allowance | 4,433 | 4,433 |
Reporting basis: At September 30, the closing allowance comprised $4,063 million against loans and $370 million against unfunded commitments. The loan-only allowance ratio fell from 1.51% in June to 1.25% in September. The table, rather than that falling ratio alone, establishes how the reserve changed.
Source: Third-quarter 2026 Form 10-Q, Note 4, pp. 18–20; MD&A Tables 8–10 and 15, pp. 59–60 and 64.
There is counterevidence to a simple story of improving credit everywhere. Commercial real-estate loans increased to $25.897 billion from $23.720 billion at year-end. Multifamily nonperforming loans rose to $33 million from $4 million, although office nonperforming loans fell to $4 million from $36 million. Separately, other-consumer loan reserves increased to $1.346 billion from $1.238 billion. These figures warrant attention even though they do not establish a broad credit deterioration.
Concentration also matters as Truist redirects lending. Finance and insurance borrowers represented $32.210 billion, or 19.3%, of commercial-and-industrial loans. Roughly 60% of this industry category involved asset securitization, securities-backed lending, and certain real-estate investment trusts. Truist describes collateral protections and monitoring, but this is not a pure measure of private-credit exposure and should not be treated as one.
The allowance models use several economic scenarios, supplemented by management judgment. Their weights remained unchanged from year-end. Future provisions will depend on actual borrower performance and updated forecasts, rather than on a repeat of the RAC release.
Source: Third-quarter 2026 Form 10-Q, Note 4, pp. 18–19; MD&A Tables 12–14, pp. 62–63.
5. More cash and deposits improve funding, while debt still requires active management
Truist ended September with more cash and less total borrowing, but the improvement did not come mainly from operating profit. Cash and cash equivalents rose $9.095 billion during the first nine months. Operating activities supplied $3.481 billion; investing and financing activities supplied the rest.
| Consolidated financial position, USD millions | December 31, 2025 | September 30, 2026 |
|---|---|---|
| Cash and cash equivalents | 36,377 | 45,472 |
| Investment securities, carrying value | 112,228 | 110,189 |
| Loans and leases, before allowance | 328,595 | 323,930 |
| Deposits | 400,398 | 413,233 |
| Short-term borrowings | 27,839 | 12,415 |
| Long-term debt | 41,963 | 53,373 |
| Total assets | 547,538 | 554,196 |
| Total liabilities | 482,349 | 492,724 |
| Shareholders' equity | 65,189 | 61,472 |
Reporting basis: Cash combines cash and due from banks with interest-bearing deposits at banks. Investment securities combine available-for-sale securities at fair value and held-to-maturity securities at amortized cost; trading assets are separate.
Source: Third-quarter 2026 Form 10-Q, consolidated balance sheets, p. 4.
Customers' deposit balances increased $12.835 billion. Loan sales produced $6.002 billion of cash, while new lending net of principal collected used $2.245 billion, down sharply from $18.194 billion a year earlier. These flows help explain how Truist accumulated cash while buying securities, acquiring servicing rights, and paying shareholders.
| Consolidated cash flows, USD millions | First nine months 2025 | First nine months 2026 |
|---|---|---|
| Operating activities | 3,157 | 3,481 |
| Investing activities | -12,971 | 965 |
| Financing activities | 6,898 | 4,649 |
| Net change in cash | -2,916 | 9,095 |
| Opening cash | 39,768 | 36,377 |
| Closing cash | 36,852 | 45,472 |
Source: Third-quarter 2026 Form 10-Q, consolidated cash flows, p. 8.
For a bank, operating cash has to be read alongside changes in deposits and lending. It also contains substantial accounting and timing effects. The securities loss reduced profit but was added back in operating cash because the related sale proceeds belong in investing cash. Changes in derivatives and trading assets contributed cash, while other assets and liabilities absorbed it. The end-note reconciliation separates these movements from profit.
Total short- and long-term borrowing fell $4.014 billion, much less than the $15.424 billion drop in short-term borrowing alone. Long-term floating-rate Federal Home Loan Bank advances increased from $9.450 billion to $21.100 billion. Truist classifies debt by its original contractual maturity, so “long-term” does not mean that none comes due within the next year.
The last complete annual maturity schedule, at December 31, 2025, showed $11.636 billion falling due in 2027, compared with $4.734 billion in 2026. It has since changed through issuances, redemptions, and advances. During the first nine months of 2026, Truist issued $6.4 billion of mainly fixed-to-floating senior notes, with a weighted average stated rate of 4.78% and maturities from 2029 to 2037, plus $350 million of floating-rate notes. Funding costs remain meaningful: quarterly interest expense on long-term debt was $534 million, up from $523 million a year earlier.
Sources: Third-quarter 2026 Form 10-Q, Note 8, p. 28, and borrowings discussion, p. 66; 2025 Form 10-K, accounting policy on borrowing classification and Note 11, pp. 134–135. Annual maturity amounts are historical, not a September 2026 schedule.
Liquidity provides a substantial buffer against those obligations. The average regulatory liquidity coverage ratio was 110%, above its 100% minimum. This compares readily usable liquid assets with modeled net cash needs during a 30-day stress period. Truist Bank reported $176.780 billion of available secured borrowing capacity, approximately 8.6 times wholesale funding maturities within one year, plus $38.535 billion of eligible Federal Reserve cash. Borrowing capacity requires collateral and access to the funding channels; it is not cash already in hand. The parent separately held enough cash to meet its policy of covering more than 12 months of projected outflows.
Source: Third-quarter 2026 Form 10-Q, liquidity discussion and Table 22, pp. 72–73.
6. Shareholder payments and market-value losses are using capital
Truist retains a regulatory capital buffer, but its accounting equity fell despite positive earnings. Shareholders' equity declined $3.717 billion to $61.472 billion. Buybacks and dividends were larger than retained current-period earnings, while market-related changes recorded outside net income reduced equity by another $2.503 billion.
Cash paid for common buybacks and common and preferred dividends totaled $5.697 billion during the first nine months, against $3.481 billion of operating cash. Banks fund the whole balance sheet, so this comparison is not a conventional industrial-company free-cash-flow test. It does show that distributions relied on broader balance-sheet funding and asset flows as well as operating cash generation.
Repurchases are part of Truist's stated capital-distribution strategy. They reduced outstanding shares: 69.858 million shares were repurchased, while 5.876 million were issued net through equity awards. Repurchased shares return to authorized but unissued status rather than accumulating as treasury stock. Equity compensation expense was $279 million, and dilutive awards added approximately 16.2 million shares to the quarterly diluted-share calculation. Buybacks exceeded award issuance, but compensation still has a cost and a dilution effect.
Source: Third-quarter 2026 Form 10-Q, equity and cash-flow statements, pp. 7–8; Notes 9 and 15; share-repurchase discussion, p. 75.
The market-value pressure extends beyond the securities Truist sold. Held-to-maturity securities had a carrying amount of $48.666 billion but a disclosed fair value of $38.263 billion. The $10.403 billion gap widened from $8.056 billion at year-end. These securities do not receive the same routine balance-sheet fair-value adjustment as available-for-sale securities. The gap nevertheless matters if funding needs force asset sales or if low-yielding assets remain tied up for years.
Contracts used to stabilize future interest receipts and payments, called cash-flow hedges, contributed a $1.719 billion after-tax decline to equity outside current profit. Available-for-sale securities contributed a further $915 million decline during the nine months. These changes sit in accumulated other comprehensive income, which fell $2.503 billion after other components. The securities amount is the net movement in that account, including transfers to reported profit when losses are realized; the realized sale loss should not be subtracted again.
Truist's interest-rate model estimates only a 1.0% reduction in the next 12 months' net interest income if rates gradually fall two percentage points relative to its baseline. This indicates limited modeled near-term sensitivity after hedges and other balance-sheet assumptions. It does not erase the existing securities valuation gap.
Source: Third-quarter 2026 Form 10-Q, balance sheets, p. 4; comprehensive income, p. 6; Note 10; MD&A Table 19, p. 68.
The preliminary common equity tier 1 ratio was 10.7%, versus 10.8% at year-end and a current minimum including the stress buffer of 7.0%. This ratio measures qualifying common capital against assets weighted for regulatory risk. Risk-weighted assets declined to $431.752 billion from $443.257 billion, helping support the ratio while capital was distributed.
The March 2026 capital proposals described in the filing would require banks in Truist's category to include most accumulated other comprehensive income in regulatory capital over a five-year transition. The proposals were not final rules in the filing. Their relevance is practical: today's regulatory ratio and accounting equity do not capture identical amounts, and future requirements could affect capacity for distributions and lending. Bank dividends to the parent are also subject to regulatory restrictions.
Sources: Third-quarter 2026 Form 10-Q, Tables 24–25 and regulatory updates, pp. 74–76; 2025 Form 10-K, Note 17, regulatory restrictions.
7. LightStream extends the strategy, while other commitments still need cash
The next loan sale could further reduce borrowing, but the immediate earnings replacement remains incomplete. On October 14, Truist agreed to sell $7.7 billion of LightStream unsecured loans to Carlyle. The filing estimates $7.2 billion of net proceeds, no material net-income effect, and a fourth-quarter closing subject to customary conditions. The loans and proceeds should therefore remain separate from the completed September results.
Source: Third-quarter 2026 Form 10-Q, Note 1, subsequent events, p. 9, and executive overview, p. 49; October 16 earnings release, transaction highlights identifying Carlyle.
Management intends to use LightStream proceeds to repay wholesale borrowing and may undertake another securities repositioning. Its fourth-quarter tax-equivalent net-interest-income outlook was $3.65–$3.70 billion. That outlook included a $125 million reduction from RAC and a $40 million benefit from the completed securities repositioning; it excluded potential strategic actions. Thus, the disclosed securities benefit replaces only part of the lost loan income. Lower credit costs, funding needs, and expenses must also contribute for the exit to improve overall earnings.
Source: October 16 earnings presentation, slides 5, 10 and 14. These are management plans and forecasts, not completed fourth-quarter results.
Truist continues to commit funds to other activities. Affordable-housing and related investments carried $2.277 billion of future funding obligations already included in liabilities. Renewable-energy investment commitments outside the carrying amount increased to $2.068 billion from $719 million at year-end. These programs can generate tax benefits, but they also require funding; the tax-rate benefit is not a substitute for evaluating their cash demands.
The balance sheet also contains $17.125 billion of goodwill: amounts from earlier acquisition prices that exceeded the identified net assets bought. Truist did not find evidence requiring an interim goodwill write-down. However, its prior annual test showed that valuing the Wholesale Banking reporting unit’s expected future cash (excluding Wealth) with a discount rate one percentage point higher would put the business below its recorded value, with other assumptions unchanged. A higher discount rate reduces the present value assigned to future cash. That sensitivity makes delivery of the business plan relevant to the value retained on the books.
Source: Third-quarter 2026 Form 10-Q, Notes 5 and 12, pp. 25 and 32, and goodwill discussion, p. 77.
A legal payment also approaches. The court-approved Bickerstaff overdraft settlement permits contributions of up to $240 million. Truist expects its estimated final payments, already included in legal accruals, in the fourth quarter. The maximum settlement amount is not a new fourth-quarter expense or a disclosed estimate of the final payment. For other legal matters, management described estimable reasonably possible losses above accruals as immaterial, while excluding matters it could not estimate. That leaves an unquantified exposure rather than establishing that legal risk is absent.
Leases are a smaller but continuing claim on cash: operating lease liabilities were $1.169 billion, with a weighted average remaining term of 6.5 years. Together, these commitments show why proceeds from asset sales cannot all be viewed as available for buybacks or new lending.
Source: Third-quarter 2026 Form 10-Q, Note 7, p. 27, and Note 12, p. 34.
8. Conclusion: the funding repair is clearer than the growth improvement
Truist is becoming easier to fund and less exposed to the loans it has chosen to exit; stronger continuing earnings are still a task to complete. Deposits are growing, cash is higher, and total borrowing is lower. Exiting RAC also removes a business that had generated little pretax profit while carrying substantial credit risk.
The harder part is replacing forgone income with profitable customer relationships. Wholesale balances and wealth fees show capacity to grow, but their benefits have been partly absorbed by pricing pressure and costs. The third-quarter adjusted operating improvement before credit provisions and taxes was small, while buybacks amplified the per-share result.
The business assessment would improve if deposit growth holds at manageable rates and continuing fee and lending income grow faster than their associated costs. It would weaken if commercial credit losses rise, funding becomes more expensive, or further securities losses consume capital without sufficient later earnings benefits. The pending LightStream sale offers another opportunity to simplify funding; execution of the continuing banking strategy will determine what that opportunity produces.
Reporting basis and calculation notes
Filing identity and scope. The source is Truist Financial Corporation and subsidiaries' unaudited consolidated Form 10-Q for September 30, 2026, filed October 28, 2026, accession 0000092230-26-000129, CIK 0000092230. Quarter comparisons use July–September in both years; cumulative comparisons use January–September. Balance-sheet comparisons use September 30, 2026 and December 31, 2025. The filing reports no accounting-policy change from the 2025 annual report that could materially affect the financial statements.
Sources: SEC submission record; selected Form 10-Q, cover and Note 1. SEC XBRL facts were checked against the company facts file, using this accession, USD units, consolidated facts, and the appropriate instant or duration dates. The checks included assets, liabilities, equity, net interest income, total profit, common-shareholder profit, and cash-flow totals. Available source verification supports the dated filings and announcements cited here; it does not establish that every possible development through the research cutoff was captured.
Calculation notes: after-tax adjustments. All amounts below are USD millions. Signs show the change needed to move from reported to adjusted common-shareholder profit.
| Adjustment for third quarter 2026 | Pretax change | Related tax change to profit | After-tax change |
|---|---|---|---|
| Reverse securities loss | 1,447 | -346 | 1,101 |
| Remove RAC reserve benefit | -581 | 139 | -442 |
| Reverse RAC loss and costs | 106 | -26 | 80 |
| Total adjustment | 972 | -233 | 739 |
Reported common profit of $684 million plus $739 million equals adjusted common profit of $1,423 million. The prior-year reported and adjusted comparator is $1,348 million. The adjustments use disclosed applicable marginal taxes, rather than applying the quarter's 10.7% effective tax rate. The $106 million RAC amount comprises the $66 million income reduction and $40 million expense increase. The reserve benefit is separate from the loan-sale loss and charge-offs.
Sources: October 16 earnings presentation, appendix A-3; earnings release, comparable reported and adjusted common profit; Form 10-Q, pp. 5 and 49–54.
Calculation notes: growth and earnings contribution. Growth equals the current amount divided by the comparable prior amount, minus one. Adjusted revenue is $3,747 + $1,447 + $66 = $5,260 million; adjusted expense is $3,105 − $40 = $3,065 million. Their $2,195 million difference compares with $2,173 million in 2025. The $75 million increase in adjusted common profit reconciles as $22 million more revenue after operating expenses, plus $108 million lower credit provisions, minus $44 million more tax expense, minus $11 million more preferred dividends and related amounts. Diluted shares fell from 1,296.666 million to 1,226.342 million.
Calculation notes: profit to operating cash. The table names the accounting and timing adjustments; all figures are consolidated USD millions for the first nine months.
| Reconciliation item | 2025 | 2026 |
|---|---|---|
| Net income | 3,953 | 3,833 |
| Credit provisions, depreciation, intangible amortization and securities losses | 2,035 | 2,633 |
| Changes in loans held for sale | -578 | 352 |
| Changes in pension assets | -169 | -229 |
| Changes in derivatives and trading assets | -1,761 | 1,650 |
| Changes in tax-credit investments | -142 | -560 |
| Changes in other assets and liabilities | -610 | -2,144 |
| Other net adjustments, as disclosed | 429 | -2,054 |
| Operating cash flow | 3,157 | 3,481 |
The filing does not separately explain every item inside “other net adjustments”; no single cash driver is assigned to that aggregate here. At September 2026, $4,230 million of cash and due from banks plus $41,242 million of interest-bearing deposits with banks equals $45,472 million of statement cash. The cash-flow statement labels its opening and closing cash as including continuing and discontinued operations and presents no separate restricted-cash reconciliation. Its 2025 comparative classifications were conformed to the current presentation.
Source: Third-quarter 2026 Form 10-Q, pp. 4 and 8.
Calculation notes: equity. This table checks why ownership capital fell despite positive profit. All amounts are USD millions for the first nine months of 2026.
| Movement in shareholders' equity | Amount |
|---|---|
| Opening equity | 65,189 |
| Net income | 3,833 |
| Other comprehensive loss | -2,503 |
| Repurchases, including excise tax | -3,567 |
| Common and preferred dividends declared | -2,163 |
| Preferred stock issued | 495 |
| Equity compensation | 279 |
| Net effects of award issuance | -91 |
| Closing equity | 61,472 |
Cash repurchases were $3,534 million. The equity entry includes excise tax and follows the equity statement's accounting basis.
Paid-in capital fell from $33,663 million to $30,613 million. Repurchases reduced it by $3,218 million and net award entries by $111 million; compensation added $279 million. Retained earnings, the accumulated profit remaining in the business, rose from $26,067 million to $27,728 million. That increase equals net income of $3,833 million less $2,163 million of declared dividends and $9 million of award-related adjustments. Common-stock par value fell from $6,312 million to $5,992 million, reflecting $29 million from issuance and $349 million removed through repurchases.
Assets equal liabilities plus equity at both reporting dates: $554,196 million = $492,724 million + $61,472 million at September 2026; $547,538 million = $482,349 million + $65,189 million at December 2025.
Calculation notes: other assets. Other assets increased $2,504 million. Future tax benefits recorded as deferred tax assets added $1,288 million. Tax-credit and private-equity investments added $822 million, and derivative assets added $612 million. Changes in other components partly offset these increases. This growth therefore includes investment and tax values, rather than simply more unpaid customer bills.
Regular amortization—the gradual recognition of acquisition-related asset costs—reduced identifiable intangible assets by $189 million. Goodwill was unchanged. Premises and equipment rose $85 million to $3,257 million.
Residential servicing rights increased from $3,724 million to $4,808 million. Purchases added $755 million and other additions $306 million. Valuation gains added another $313 million, while expected servicing cash flows, the passage of time, and other changes reduced the balance by $290 million. The asset increase was therefore partly investment and partly accounting valuation.
Sources: Third-quarter 2026 Form 10-Q, pp. 4 and 7; Notes 5–6, pp. 25–26; Table 17, p. 65.
This analysis is for general information and is not investment advice.