Truist Cuts Funding Costs as Full-Year Lending Expands
Deposit interest expense fell 10.2% to $7.05 billion in 2025, supporting higher net interest income.
Truist Financial (TFC), a large U.S. regional bank, cut deposit interest expense 10.2% to $7.05 billion in 2025 as lower funding costs supported net interest income.
Total interest expense fell 7.8% to $10.12 billion, offsetting a 2.1% decline in taxable-equivalent interest income. Taxable-equivalent net interest income increased 2.2% to $14.62 billion from $14.30 billion in 2024, while GAAP net interest income rose 2.4% to $14.42 billion.
The balance-sheet expansion was led by loans and leases held for investment, which increased about 7.2% YoY to $328.6 billion at year-end from $306.4 billion. Broad-based growth occurred, with particular increases in commercial-and-industrial and commercial-real-estate lending.
Fee income presented a more uneven picture. Investment-banking and trading income fell 5.6% to $1.14 billion, while wealth-management income increased 1.3% to $1.43 billion and card and treasury-management fees rose 3.7% to $1.36 billion. Mortgage-banking income and lending-related fees also increased, while other deposit revenue declined.
Truist ended the year with a common-equity Tier 1 ratio of 10.8%, down 70 bps from 11.5% at the end of 2024. The company announced a new authorization to repurchase as much as $10 billion of common stock, with no expiration date.
Credit costs edged higher. The full-year provision for credit losses increased 1.3% to $1.89 billion, while nonperforming assets rose 10.6% to $1.63 billion. The nonperforming-loan ratio increased one bp to 0.48%, and the allowance for loan and lease losses declined six bps to 1.53% of loans.
Noninterest expense increased 0.6% to $12.08 billion as higher personnel, processing and software costs outweighed a decline in regulatory costs. Deposits finished the year at $400.4 billion, up 2.5% YoY, leaving loan growth ahead of the expansion in the deposit base.