Truist posts slight fourth-quarter profit gain, reaches overdraft fees legal settlement

Truist Financial Corp. continued during the fourth quarter its fiscal 2025 pattern of slight improvements in key financial metrics as the bank continues to adjust to its latest fee-income strategy.

Truist, the ninth-largest U.S. bank, reported Wednesday net income of $1.29 billion, up 5.7% from a year ago.

However, it was down 4.4% compared with the third quarter.

Diluted earnings were $1 a share.

Adjusted earnings were $1.12 when excluding an 8-cent charge worth $99 million after tax related to a legal settlement agreement, and a 4-cent charge worth $48 million after tax, in severance payments and other expenses.

The average earnings forecast was $1.09 by nine analysts surveyed by Zacks Investment Research. Analysts typically do not include one-time gains and losses in their forecasts.

For fiscal 2025, Truist reported $4.97 billion in net income, compared with $4.47 billion in fiscal 2024.

"We delivered strong, purpose-driven performance in 2025 by deepening client relationships, enhancing operational efficiency, investing in talented teammates and innovative technology, and increasing capital return to shareholders," Truist chairman and chief executive Bill Rogers said in a statement.

"Through disciplined risk management and sound governance, we strengthened our foundation and positioned Truist for sustainable growth.

"Looking forward, our strategic priorities remain unchanged, and our focus is 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."

Legal settlement

The legal settlement involves a lawsuit with legacy SunTrust Banks Inc. as the defendant.

This class action case was filed in Fulton County (Ga.) State Court in August 2010. The plaintiff alleges that all overdraft fees charged to his account related to debit card and ATM transactions are actually interest charges and therefore subject to the usury laws of Georgia.

The lawsuit sought $455 million in damages for SunTrust customers based in Georgia with the following eligibilities for the class period of July 12, 2006, to Oct. 6, 2017: at least one overdraft of $500 or less resulting from an ATM or debit card transaction; paid any overdraft fees as a result of the transaction; and did not receive a refund of those fees.

Truist said the $240 million settlement agreement amount was reached Tuesday and is subject to court approval.

Core quarterly details

In May 2024, Truist completed the sale of its remaining 80% stake in Truist Insurance Holdings to an investor group. The subsidiary had been by far Truist's largest fee-income source, generating $3.3 billion in fiscal 2023 revenue.

Rogers has expressed confidence that Truist will recapture much, if not all, of the insurance subsidiary's income over time through other fee-income sources.

Wealth management has become the most significant source of fee income, generating $365 million in the fourth quarter, followed by card and treasury-management fees at $336 million, and investment banking and trading income at $335 million.

Altogether, fourth-quarter 2025 fee income was $1.55 billion, down from $1.56 billion in the third quarter, but up from $1.47 billion a year ago.

Meanwhile, loan revenue was up 3% year over year to $3.75 billion.

The bank increased its loan-loss provision by $512 million, compared with $436 million in the third quarter and $471 million a year ago.

The provision offers a glimpse at how a bank expects its loan portfolio and revenue stream to perform as customers struggle to make monthly payments. It has a bottom-line effect on a bank's profitability.

Other details

Truist issued its initial fiscal 2026 earnings projections of revenues up 4% to 5% from $20.32 billion in fiscal 2025. Noninterest expenses are expected to rise 1.25% to 2.25%.

For the first quarter of 2026, it is forecasting a 2% to 3% decline in revenue. Noninterest expenses are expected down 4% to 5%.

Truist spent $750 million on share repurchases during the fourth quarter.

In December, the board of directors authorized a new share-repurchase program in which it plans to spend up to $10 billion on buying back its common stock. The authorization does not have an expiration date.

Truist projects spending $1 billion on share repurchases each quarter of 2026, or $4 billion for fiscal 2026.

Truist's workforce declined by 472 during the fourth quarter to 38,062. The workforce, however, is up 401 from a year ago.

Truist has not provided a Triad West workforce total for several quarters. The 14-county region, which covers the Triad, spans from Avery and Watauga counties in the west to Alamance County in the east.

Since BB&T Corp. completed its $33.4 billion purchase of SunTrust Banks in December 2019 to form Truist, the current workforce has decreased by 35% — or by at least 21,238 positions, from approximately 59,300.

Total assets were $548 billion as of Dec. 31, up from $543 billion on Sept. 30.