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Derivative Financial Instruments
 3 Months Ended
Mar. 31, 2023
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:
March 31, 2023December 31, 2022
 Notional AmountFair ValueNotional AmountFair Value
(Dollars in millions)AssetsLiabilitiesAssetsLiabilities
Cash flow hedges:      
Interest rate contracts:      
Swaps hedging commercial loans$19,400 $— $— $16,650 $— $— 
Fair value hedges:   
Interest rate contracts:   
Swaps hedging long-term debt 16,018 — (53)16,393 — (68)
Swaps hedging AFS securities7,097 — — 7,097 — — 
Total23,115 — (53)23,490 — (68)
Not designated as hedges:      
Client-related and other risk management:      
Interest rate contracts:      
Swaps160,381 625 (2,169)155,670 579 (2,665)
Options42,648 171 (166)29,840 172 (192)
Forward commitments791 2 (10)1,495 8 (2)
Other3,092 8 (7)3,823 1 — 
Equity contracts34,979 727 (1,109)33,185 644 (901)
Credit contracts:
Trading assets160 — — 140 — — 
Loans and leases780 — (1)394 — — 
Risk participation agreements7,156 — (3)6,824 — (3)
Total return swaps1,793 71 (6)1,729 81 (2)
Foreign exchange contracts21,527 300 (304)19,022 364 (380)
Commodity7,534 454 (450)4,881 444 (447)
Total280,841 2,358 (4,225)257,003 2,293 (4,592)
Mortgage banking:      
Interest rate contracts:      
Swaps227 — — 115 — — 
Interest rate lock commitments1,837 12 (12)999 1 (17)
When issued securities, forward rate agreements and forward commitments
3,470 15 (17)2,128 25 (6)
Other243 1 — 140 1 — 
Total5,777 28 (29)3,382 27 (23)
MSRs:      
Interest rate contracts:      
Swaps14,329 — — 14,566 — — 
Options15,089 53 (85)13,930 122 (48)
When issued securities, forward rate agreements and forward commitments
2,184 14 (3)2,459 11 (15)
Other2,268 1 (1)1,532 — (3)
Total33,870 68 (89)32,487 133 (66)
Total derivatives not designated as hedges320,488 2,454 (4,343)292,872 2,453 (4,681)
Total derivatives$363,003 2,454 (4,396)$333,012 2,453 (4,749)
Gross amounts in the Consolidated Balance Sheets:    
Amounts subject to master netting arrangements
(1,251)1,251  (1,223)1,223 
Cash collateral (received) posted for amounts subject to master netting arrangements
 (511)556  (546)555 
Net amount $692 $(2,589) $684 $(2,971)
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:
March 31, 2023
(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$1,722 $(1,370)$352 $— $352 
Derivatives not subject to master netting arrangement or similar arrangement107 — 107 — 107 
Exchange traded derivatives625 (392)233 — 233 
Total derivative assets$2,454 $(1,762)$692 $— $692 
Derivative liabilities:
Derivatives subject to master netting arrangement or similar arrangement$(3,431)$1,415 $(2,016)$95 $(1,921)
Derivatives not subject to master netting arrangement or similar arrangement(572)— (572)— (572)
Exchange traded derivatives(393)392 (1)— (1)
Total derivative liabilities$(4,396)$1,807 $(2,589)$95 $(2,494)
December 31, 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$1,895 $(1,408)$487 $— $487 
Derivatives not subject to master netting arrangement or similar arrangement86 — 86 — 86 
Exchange traded derivatives472 (361)111 — 111 
Total derivative assets$2,453 $(1,769)$684 $— $684 
Derivative liabilities:
Derivatives subject to master netting arrangement or similar arrangement$(3,688)$1,417 $(2,271)$43 $(2,228)
Derivatives not subject to master netting arrangement or similar arrangement(697)— (697)— (697)
Exchange traded derivatives(364)361 (3)— (3)
Total derivative liabilities$(4,749)$1,778 $(2,971)$43 $(2,928)

The following table presents the carrying value of hedged items in fair value hedging relationships:
March 31, 2023December 31, 2022
Hedge Basis AdjustmentHedge Basis Adjustment
(Dollars in millions)Hedged Asset / Liability BasisItems Currently DesignatedDiscontinued HedgesHedged Asset / Liability BasisItems Currently DesignatedDiscontinued Hedges
AFS securities(1)
$38,761 $(534)$(4)$38,773 $(630)$(4)
Loans and leases350 — 9 353 — 10 
Long-term debt27,385 (303)(134)25,378 (780)218 
(1)The amortized cost of AFS securities was $45.5 billion at March 31, 2023 and $46.2 billion at December 31, 2022.
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 March 31,
(Dollars in millions)20232022
Pre-tax gain (loss) recognized in OCI:
Commercial loans$163 $— 
Pre-tax gain (loss) reclassified from AOCI into interest expense:
Long-term debt$— $(6)

The following table summarizes the impact on net interest income related to fair value hedges:
Three Months Ended March 31,
(Dollars in millions)20232022
Investment securities:
Amounts related to interest settlements$76 $(5)
Recognized on derivatives(95)414 
Recognized on hedged items
106 (402)
Net income (expense) recognized(1)
87 7 
Loans and leases:
Recognized on hedged items
(1)(1)
Net income (expense) recognized(1)(1)
Long-term debt:
Amounts related to interest settlements(46)16 
Recognized on derivatives156 (429)
Recognized on hedged items
(142)486 
Net income (expense) recognized(32)73 
Net income (expense) recognized, total
$54 $79 
(1)Includes $10 million and $8 million of income recognized for the three months ended March 31, 2023 and 2022, respectively, from securities with terminated hedges that were reclassified to HTM. The income recognized was offset by the amortization of the fair value mark.
The following table presents information about the Company’s cash flow and fair value hedges:
(Dollars in millions)Mar 31, 2023Dec 31, 2022
Cash flow hedges:
Net unrecognized after-tax gain (loss) on active hedges recorded in AOCI$6 $(118)
Net unrecognized after-tax gain (loss) on terminated hedges recorded in AOCI (to be recognized in earnings through 2029)
41 40 
Estimated portion of net after-tax gain (loss) on active and terminated hedges to be reclassified from AOCI into earnings during the next 12 months
(54)(31)
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
6 years6 years
Fair value hedges:
Unrecognized pre-tax net gain (loss) on terminated hedges (to be recognized as interest primarily through 2033)(1)
$308 $669 
Portion of pre-tax net gain (loss) on terminated hedges to be recognized as a change in interest during the next 12 months
52 163 
(1)Includes deferred gains that are recorded in AOCI as a result of the reclassification to HTM of previously hedged securities of $447 million at March 31, 2023 and $457 million at December 31, 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 March 31,
(Dollars in millions)Income Statement Location20232022
Client-related and other risk management:
Interest rate contractsInvestment banking and trading income and other income$34 $56 
Foreign exchange contractsInvestment banking and trading income and other income(3)32 
Equity contractsInvestment banking and trading income and other income2 5 
Credit contractsInvestment banking and trading income and other income(33)8 
Commodity contractsInvestment banking and trading income10 5 
Mortgage banking:  
Interest rate contracts - residentialMortgage banking income(1)261 
Interest rate contracts - commercialMortgage banking income1 (1)
MSRs:  
Interest rate contracts - residentialMortgage banking income1 (349)
Interest rate contracts - commercialMortgage banking income3 (9)
Total$14 $8 

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 March 31, 2023, the remaining terms on these risk participations ranged from less than one year to 15 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)Mar 31, 2023Dec 31, 2022
Risk participation agreements:
Maximum potential amount of exposure
$618 $575 
Total return swaps:
Cash collateral held473 453 

The following table summarizes collateral positions with counterparties:
(Dollars in millions)Mar 31, 2023Dec 31, 2022
Dealer and other counterparties:
Cash and other collateral received from counterparties$511 $542 
Derivatives in a net gain position secured by collateral received586 618 
Unsecured positions in a net gain with counterparties after collateral postings
75 76 
Cash collateral posted to counterparties636 590 
Derivatives in a net loss position secured by collateral809 692 
Central counterparties clearing:
Cash collateral, including initial margin, received from central clearing parties— 4 
Cash collateral, including initial margin, posted to central clearing parties85 45 
Derivatives in a net loss position19 13 
Derivatives in a net gain position1 12 
Securities pledged to central counterparties clearing933 639