Truist: 3 Key Takeaways for Long-Term Investors

On its third-quarter 2026 earnings call, held on Oct. 16, 2026, Truist (NYSE:TFC) announced a strategic plan to exit non-core lending businesses and reallocate capital toward relationship banking. For long-term investors, the shift aims to improve return on capital, lower credit risk, and boost earnings quality across its Sun Belt branch network.

Three takeaways from management explain how the strategy unfolds.

1. Exiting Non-Core Consumer Lending Frees Up Capital

Truist agreed to sell $7.7 billion in LightStream unsecured loans after closing its Regional Acceptance Corp. subprime auto loan portfolio sale. Exiting stand-alone lending units will lower credit risk and free up capital for higher-return relationship banking.

Similar to our decision to sell RAC, the sale of LightStream represents an exit from a non-core loan-only business that is generating returns well below our targets. Exiting LightStream will also improve our credit risk, liquidity, and funding profiles.
-- Mike Maguire, Chief Financial Officer

2. Balance Sheet Repositioning Reduces Risk and Supports Returns

Management is reinvesting proceeds from portfolio sales to shift securities out of low-yielding mortgage-backed securities, which are pools of residential mortgages, into potentially shorter-duration U.S. Treasuries. The bank is also paying down high-cost wholesale borrowings, which are short-term corporate funding obligations.

With respect to the balance sheet, we plan to remix our securities away from long-dated MBS into a greater mix of U.S. Treasuries, limit the use of our deposits to core strategic lending areas where we can build deep, long-standing relationships...
-- Mike Lyons, Chief Executive Officer

3. Spending Discipline Creates Capacity for Growth Investments

Management is reviewing every business and process to cut low-priority overhead expenses. The savings will fund branch renovations, technology upgrades, and commercial banker hires to win daily demand deposit accounts, which are low-cost checking accounts.

The goals are really twofold: to enhance the balance sheet, which Mike talked about a lot, and we're happy with the progress we made this quarter. Then really take our current expense base and create incremental capacity within it...
-- Mike Lyons, Chief Executive Officer

Looking Ahead

A dense branch network across Southeastern markets and full-service commercial banking provide a strong operational foundation. Long-term strategy focuses on deposit growth, expense discipline, and capital efficiency.

We have all the raw materials to become one of the country's top-performing banks, and this is our overwhelming No. 1 objective.
-- Mike Lyons, Chief Executive Officer

Future value hinges on disciplined resource allocation to boost profitability without expanding risk. Management remains focused on meeting return on tangible common equity, a key bank profitability metric.

We remain committed to delivering on our ROTCE targets, which includes 15% in 2027 and 16%-18% over the long term.
-- Mike Lyons, Chief Executive Officer

The Motley Fool has positions in and recommends Truist Financial. The Motley Fool has a disclosure policy.