Truist Financial TFC is slated to announce first-quarter 2026 results tomorrow before the opening bell. The overall impressive lending scenario in the quarter is likely to have supported the company’s net interest income (NII).
Per the Fed’s latest data, the demand for commercial and industrial (C&I) loans (accounting for almost 50% of TFC’s total loans and leases held for investment) was robust in the to-be-reported quarter. Demand for consumer loans (almost 40% of total loans) was solid.
The Zacks Consensus Estimate for TFC’s average earning assets for the quarter is pegged at $486.1 billion, indicating a 2.1% rise from the prior-year quarter.
In the first quarter, the Federal Reserve kept interest rates unchanged. This is likely to have offered some support to Truist’s NII. Strong loan demand, decent economic growth and stabilizing funding/deposit costs are expected to have driven NII higher. The consensus estimate for NII is pegged at $3.62 billion, implying a 3.3% increase.
Management anticipates NII to decrease 2-3% sequentially, primarily due to a seasonal fall in public funds deposits and two fewer days compared with the fourth quarter. Also, net interest margin is expected to modestly fall sequentially.
Other Factors to Consider for Truist’s Q1 Earnings
Non-Interest Income: Though mortgage rates rose in the first quarter, they were still below last year’s level. Hence, refinancing activities and origination volume were decent. Thus, Truist’s mortgage banking income is expected to have risen. The Zacks Consensus Estimate for the metric of $111.4 million indicates a 9.2% increase from the prior-year quarter.
Higher client activity and volatility in the capital markets, along with industry-wide robust deal-making activities, in the to-be-reported quarter are expected to have supported TFC’s corresponding fee income. The consensus estimate for investment banking and trading income of $318.3 million indicates a year-over-year jump of 16.6%.
The robust lending scenario is likely to have supported Truist’s lending-related fees. The Zacks Consensus Estimate for the same stands at $98.7 million, indicating a rise of 3.8%. The consensus estimate for wealth management income of $365.9 million suggests a rise of 6.4%.
The Zacks Consensus Estimate for card and payment-related fees of $334 million implies a 51.8% growth. The consensus mark for service charges on deposits of $118.1 million suggests a 48.7% plunge from the prior-year quarter.
The Zacks Consensus Estimate for total non-interest income is pegged at $1.51 billion, which indicates an 8.2% rise from the prior-year quarter. Management expects non-interest income to decline 2-3% sequentially due to lower other income.
Expenses: Truist has been witnessing a continued rise in overall non-interest expenses over the past several quarters because of investments in technology, inflationary pressure and expansion efforts. A similar trend is expected to have continued in the first quarter.
Management expects GAAP non-interest expenses to decline 4-5% from $3.2 billion in the fourth quarter of 2025. This will be attributable to lower other expenses and personal costs, partly offset by a rise in regulatory charges.
Asset Quality: Truist is less likely to have set aside a decent amount of money for potential delinquent loans as the operating backdrop turns slightly negative because of lingering geopolitical headwinds and the recent oil shocks.
The Zacks Consensus Estimate for total non-accrual loans and leases of $2.06 billion suggests a 31.7% year-over-year increase. The consensus estimate for total non-performing assets is $2 billion, indicating a 23.5% jump.
What the Zacks Model Unveils for TFC
According to our quantitative model, the chances of Truist beating the Zacks Consensus Estimate for earnings this time are low. This is because it doesn’t have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Truist is -0.74%.
Zacks Rank: The company currently carries a Zacks Rank #3.
Truist’s Q1 Earnings & Sales Expectations
The Zacks Consensus Estimate for TFC’s earnings of 99 cents per share has been revised 1% lower over the past seven days. This indicates growth of 13.8% from the year-ago reported number.
Truist Financial Corporation Price and EPS Surprise
Truist Financial Corporation price-eps-surprise | Truist Financial Corporation Quote
The consensus estimate for sales is pegged at $5.14 billion, suggesting a 4.9% rise. The company expects revenues to decline 2-3% sequentially.
TFC’s Peers Worth a Look
Here are a couple of bank stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time:
State Street STT is scheduled to announce first-quarter 2026 results on April 17. The company carries a Zacks Rank #3 and has an Earnings ESP of +1.00% at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Quarterly earnings estimates for State Street have been revised upward to $2.58 over the past week.
The Earnings ESP for Capital One Financial COF is +2.00%, and it carries a Zacks Rank #3. The company is slated to report first-quarter 2026 numbers on April 21.
Over the past seven days, the Zacks Consensus Estimate for Capital One’s quarterly earnings has been revised lower to $4.63.
Zacks' Research Chief Picks Stock Most Likely to "At Least Double"
Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.
See Our Top Stock to Double (Plus 4 Runners Up) >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Capital One Financial Corporation (COF): Free Stock Analysis Report
State Street Corporation (STT): Free Stock Analysis Report
Truist Financial Corporation (TFC): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).