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Derivative Financial Instruments
 9 Months Ended
Sep. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
Impact of Derivatives on the Consolidated Balance Sheets

The following table presents the gross notional amounts and estimated fair value of derivative instruments employed by the Company:
September 30, 2022December 31, 2021
 Notional AmountFair ValueNotional AmountFair Value
(Dollars in millions)AssetsLiabilitiesAssetsLiabilities
Cash flow hedges:      
Interest rate contracts:      
Swaps hedging commercial loans$7,250 $— $— $— $— $— 
Fair value hedges:   
Interest rate contracts:   
Swaps hedging long-term debt 14,893 — (80)12,690 — (6)
Swaps hedging AFS securities7,097 — — 12,711 — (2)
Total21,990 — (80)25,401 — (8)
Not designated as hedges:      
Client-related and other risk management:      
Interest rate contracts:      
Swaps154,257 540 (2,830)150,223 1,716 (733)
Options28,266 160 (166)23,659 43 (30)
Forward commitments2,435 27 (5)2,404 2 (5)
Other4,925 1 (1)2,927 — — 
Equity contracts37,582 653 (938)34,232 1,582 (2,089)
Credit contracts:
Trading assets120 — — — — — 
Loans and leases519 — — 570 — (2)
Risk participation agreements6,342 — (1)8,145 — (4)
Total return swaps1,525 87 — 1,445 3 (19)
Foreign exchange contracts18,793 763 (725)16,102 160 (156)
Commodity6,142 834 (840)4,641 475 (468)
Total260,906 3,065 (5,506)244,348 3,981 (3,506)
Mortgage banking:      
Interest rate contracts:      
Swaps572 — — 441 — — 
Interest rate lock commitments1,869 6 (61)4,163 30 (7)
When issued securities, forward rate agreements and forward commitments
3,716 158 — 6,913 7 (15)
Other106 1 — 424 1 — 
Total6,263 165 (61)11,941 38 (22)
MSRs:      
Interest rate contracts:      
Swaps22,327 10 — 12,837 — — 
Options13,599 160 (47)101 1 — 
When issued securities, forward rate agreements and forward commitments
2,470 3 (48)3,927 7 — 
Other1,265 1 (3)2,017 — — 
Total39,661 174 (98)18,882 8 — 
Total derivatives not designated as hedges306,830 3,404 (5,665)275,171 4,027 (3,528)
Total derivatives$336,070 3,404 (5,745)$300,572 4,027 (3,536)
Gross amounts in the Consolidated Balance Sheets:    
Amounts subject to master netting arrangements
(1,621)1,621  (1,312)1,312 
Cash collateral (received) posted for amounts subject to master netting arrangements
 (643)717  (345)1,638 
Net amount $1,140 $(3,407) $2,370 $(586)
The following table presents the offsetting of derivative instruments including financial instrument collateral related to legally enforceable master netting agreements and amounts held or pledged as collateral. U.S. GAAP does not permit netting of non-cash collateral balances in the Consolidated Balance Sheets:
September 30, 2022
(Dollars in millions)		Gross AmountAmount OffsetNet Amount in Consolidated Balance SheetsHeld/Pledged Financial InstrumentsNet Amount
Derivative assets:
Derivatives subject to master netting arrangement or similar arrangement$2,907 $(1,915)$992 $— $992 
Derivatives not subject to master netting arrangement or similar arrangement100 — 100 — 100 
Exchange traded derivatives397 (349)48 — 48 
Total derivative assets$3,404 $(2,264)$1,140 $— $1,140 
Derivative liabilities:
Derivatives subject to master netting arrangement or similar arrangement$(4,538)$1,989 $(2,549)$28 $(2,521)
Derivatives not subject to master netting arrangement or similar arrangement(758)— (758)— (758)
Exchange traded derivatives(449)349 (100)— (100)
Total derivative liabilities$(5,745)$2,338 $(3,407)$28 $(3,379)
December 31, 2021
(Dollars in millions)		Gross AmountAmount OffsetNet Amount in Consolidated Balance SheetsHeld/Pledged Financial InstrumentsNet Amount
Derivative assets:
Derivatives subject to master netting arrangement or similar arrangement$2,752 $(1,221)$1,531 $(1)$1,530 
Derivatives not subject to master netting arrangement or similar arrangement388 — 388 — 388 
Exchange traded derivatives887 (436)451 — 451 
Total derivative assets$4,027 $(1,657)$2,370 $(1)$2,369 
Derivative liabilities:
Derivatives subject to master netting arrangement or similar arrangement$(2,873)$2,514 $(359)$66 $(293)
Derivatives not subject to master netting arrangement or similar arrangement(225)— (225)— (225)
Exchange traded derivatives(438)436 (2)— (2)
Total derivative liabilities$(3,536)$2,950 $(586)$66 $(520)

The following table presents the carrying value of hedged items in fair value hedging relationships:
September 30, 2022December 31, 2021
Hedge Basis AdjustmentHedge Basis Adjustment
(Dollars in millions)Hedged Asset / Liability BasisItems Currently DesignatedDiscontinued HedgesHedged Asset / Liability BasisItems Currently DesignatedDiscontinued Hedges
AFS securities (1)$39,822 $(662)$(4)$108,758 $(400)$(150)
Loans and leases361 — 10 382 — 12 
Long-term debt24,456 (839)240 27,361 (137)629 
(1)The amortized cost of AFS securities was $47.2 billion at September 30, 2022 and $110.6 billion at December 31, 2021.
Impact of Derivatives on the Consolidated Statements of Income and Comprehensive Income

Derivatives Designated as Hedging Instruments under GAAP

No portion of the change in fair value of derivatives designated as hedges has been excluded from effectiveness testing.

The following table summarizes amounts related to cash flow hedges, which consist of interest rate contracts:
Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in millions)2022202120222021
Pre-tax gain (loss) recognized in OCI:
Commercial loans$(182)$— $(123)$— 
Total$(182)$— $(123)$— 
Pre-tax gain (loss) reclassified from AOCI into interest expense:
Deposits$— $— $— $(2)
Short-term borrowings— — — (12)
Long-term debt(1)(7)(12)(17)
Total$(1)$(7)$(12)$(31)
Pre-tax gain (loss) reclassified from AOCI into other expense: (1)
Deposits$— $— $— $(12)
Short-term borrowings— — — (20)
Long-term debt— — — (4)
Total$— $— $— $(36)
(1)Represents the accelerated amortization of amounts reclassified from AOCI, where management determined that the forecasted transaction is probable of not occurring.

The following table summarizes the impact on net interest income related to fair value hedges:
Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in millions)2022202120222021
AFS securities:
Amounts related to interest settlements$36 $(15)$40 $(39)
Recognized on derivatives157 81 631 442 
Recognized on hedged items
(142)(83)(586)(448)
Net income (expense) recognized51 (17)85 (45)
Loans and leases:
Recognized on hedged items
(1)(1)(2)(2)
Net income (expense) recognized(1)(1)(2)(2)
Long-term debt:
Amounts related to interest settlements(23)— (4)— 
Recognized on derivatives(445)— (912)— 
Recognized on hedged items
482 73 1,050 227 
Net income (expense) recognized14 73 134 227 
Net income (expense) recognized, total
$64 $55 $217 $180 
The following table presents information about the Company’s terminated cash flow and fair value hedges:
(Dollars in millions)Sep 30, 2022Dec 31, 2021
Cash flow hedges:
Net unrecognized after-tax gain (loss) on active hedges recorded in AOCI$(118)$— 
Net unrecognized after-tax gain (loss) on terminated hedges recorded in AOCI (to be recognized in earnings through 2029)
24 (9)
Estimated portion of net after-tax gain (loss) on terminated hedges to be reclassified from AOCI into earnings during the next 12 months
(11)(9)
Maximum time period over which Truist is hedging a portion of the variability in future cash flows for forecasted transactions excluding those transactions relating to the payment of variable interest on existing instruments
5 yearsN/A
Fair value hedges:
Unrecognized pre-tax net gain (loss) on terminated hedges (to be recognized as interest primarily through 2030) (1)
$703 $767 
Portion of pre-tax net gain (loss) on terminated hedges to be recognized as a change in interest during the next 12 months
173 231 
(1)Includes deferred gains that are recorded in AOCI as a result of the reclassification to HTM of previously hedged securities of $469 million at September 30, 2022.

Derivatives Not Designated as Hedging Instruments under GAAP

The Company also enters into derivatives that are not designated as accounting hedges under GAAP to economically hedge certain risks as well as in a trading capacity with its clients.

The following table presents pre-tax gain (loss) recognized in income for derivative instruments not designated as hedges:
Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in millions)Income Statement Location2022202120222021
Client-related and other risk management:  
Interest rate contractsInvestment banking and trading income and other income$59 $28 $187 $142 
Foreign exchange contractsInvestment banking and trading income and other income202 73 381 107 
Equity contractsInvestment banking and trading income and other income(57)2 (50)(18)
Credit contractsInvestment banking and trading income and other income(7)13 84 (48)
Commodity contractsInvestment banking and trading income9 1 9 6 
Mortgage banking:  
Interest rate contractsResidential mortgage income94 (18)572 (15)
Interest rate contractsCommercial mortgage income6 — 5 (1)
MSRs:  
Interest rate contractsResidential mortgage income(175)(48)(789)(162)
Interest rate contractsCommercial mortgage income(9)(1)(23)(8)
Total$122 $50 $376 $3 

Credit Derivative Instruments

As part of the Company’s corporate and investment banking business, the Company enters into contracts that are, in form or substance, written guarantees; specifically, risk participations, TRS, and credit default swaps. The Company accounts for these contracts as derivatives.

Truist has entered into risk participation agreements to share the credit exposure with other financial institutions on client-related interest rate derivative contracts. Under these agreements, the Company has guaranteed payment to a dealer counterparty in the event the counterparty experiences a loss on the derivative due to a failure to pay by the counterparty’s client. The Company manages its payment risk on its risk participations by monitoring the creditworthiness of the underlying client through the normal credit review process that the Company would have performed had it entered into a derivative directly with the obligors. At September 30, 2022, the remaining terms on these risk participations ranged from less than one year to 16 years. The potential future exposure represents the Company’s maximum estimated exposure to written risk participations, as measured by projecting a maximum value of the guaranteed derivative instruments based on scenario simulations and assuming 100% default by all obligors on the maximum value.
The Company has also entered into TRS contracts on loans and bonds. To mitigate its credit risk, the Company typically receives initial margin from the counterparty upon entering into the TRS and variation margin if the fair value of the underlying reference assets deteriorates. For additional information on the Company’s TRS contracts, see “Note 14. Commitments and Contingencies.”

The Company enters into credit default swaps to hedge credit risk associated with certain loans and leases. The Company accounts for these contracts as derivatives, and accordingly, recognizes these contracts at fair value.

The following table presents additional information related to interest rate derivative risk participation agreements and total return swaps:
(Dollars in millions)Sep 30, 2022Dec 31, 2021
Risk participation agreements:
Maximum potential amount of exposure
$260 $521 
Total return swaps:
Cash collateral held406 290 

The following table summarizes collateral positions with counterparties:
(Dollars in millions)Sep 30, 2022Dec 31, 2021
Dealer and other counterparties:
Cash and other collateral received from counterparties$591 $346 
Derivatives in a net gain position secured by collateral received680 506 
Unsecured positions in a net gain with counterparties after collateral postings
89 143 
Cash collateral posted to counterparties746 1,704 
Derivatives in a net loss position secured by collateral840 2,591 
Additional collateral that would have been posted had the Company’s credit ratings dropped below investment grade
— 3 
Central counterparties clearing:
Cash collateral, including initial margin, posted to central clearing parties52 31 
Derivatives in a net loss position18 18 
Derivatives in a net gain position124 — 
Securities pledged to central counterparties clearing782 904