Truist Financial’s TFC net interest income (NII) has been witnessing modest growth, driven by continued loan growth, a favorable interest rate regime, expansion in earning assets and deposit trends. Further, net interest margin (NIM) and loan spreads are likely to influence the pace of NII expansion.
NII has remained relatively resilient, recording a 1.1% compound annual growth rate (CAGR) over the five years ended 2025. The momentum continued in the first half of 2026, with the metric rising 1.8% year over year to $7.22 billion. It benefited from higher earning assets and loan growth, partly offset by lower loan spreads and fixed-rate debt repricing.
NII Quarterly Trend
Image Source: Truist Financial Corporation
Truist’s NII growth has been supported by an expanding earning asset base and continued loan growth. Average loans and leases held for investment increased 6.3% year over year to $330.4 billion in the first half of 2026.
Continued lending activity will likely provide a foundation for NII growth as a larger loan base generates additional interest income. However, the ongoing optimization of less strategic and lower-relationship-return lending portfolios is expected to temper loan-related NII growth to some extent.
Truist’s funding profile remains an important consideration for NII. Average deposits increased 1.5% year over year to $5.9 billion in the first half of 2026, led by growth in interest checking balances. Deposit growth provides funding capacity for asset expansion, while the average cost of total deposits remained relatively stable at 1.56%. Ongoing deposit repricing could provide further support as the rate cycle evolves, although management expects a less favorable deposit mix to weigh on NII growth.
Net interest margin remains a critical driver of Truist’s NII performance. The metric declined 2 basis points (bps) to 3.00% in the first half of 2026 from the prior-year period, reflecting pressure from lower loan spreads and fixed-rate debt repricing. While this indicates some pressure on NII growth, relatively stable funding costs and continued deposit repricing are expected to help limit further margin pressure.
TFC's NII Outlook Remains Positive Despite Headwinds
Management has moderated its 2026 NII growth outlook to 1-1.5%, reflecting continued optimization of less strategic and lower-relationship-return lending portfolios, lower loan spreads, a less favorable deposit mix, and changes in the forward rate curve. These factors are expected to limit the pace of NII expansion.
The company expects NII to increase approximately 1.5% sequentially in the third quarter, indicating continued improvement in its core interest income performance. This is supported by loan and earning-asset growth, deposit trends and balance-sheet initiatives, although NIM and pricing dynamics will remain key variables.
TFC’s Price Performance & Zacks Rank
Over the past six months, TFC shares have risen 0.3% compared with the industry’s 17.8% growth.
6-Month Price Performance
Image Source: Zacks Investment Research
Currently, Truist Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
How Are TFC’s Peers Faring in Terms of NII?
The Bank of New York Mellon Corporation BNY has been strengthening its NII through reinvestment at higher yields, balance sheet growth and stable deposit trends. Although NII declined in 2020 and 2021 amid low interest rates, it recorded a six-year CAGR of 7.6% during 2019-2025, with growth continuing in the first half of 2026.
Going forward, continued reinvestment at higher yields, loan growth and relatively stable funding trends are expected to support NII expansion. BNY now expects 2026 NII to increase 12-13% year over year, up from its previous outlook of approximately 10%, indicating stronger near-term growth prospects.
KeyCorp KEY has been strengthening its NII through lower deposit costs, reinvestment of maturing low-yielding securities and swaps into higher-yielding assets, and a shift toward higher-yielding loans. Although NII declined in 2023 and 2024, it recorded a five-year CAGR of 2.8% during 2020-2025, with NII growth continuing in the first half of 2026.
Going forward, continued loan growth, lower funding costs, a favorable deposit mix and the runoff of low-yielding assets are expected to support NII expansion. KEY expects 2026 NII to increase 9-11% from $4.67 billion in 2025. Favorable loan and deposit trends, along with growth in average earning assets, will likely further support NII expansion.
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