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Derivative Financial Instruments
 6 Months Ended
Jun. 30, 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:
June 30, 2023December 31, 2022
 Notional AmountFair ValueNotional AmountFair Value
(Dollars in millions)AssetsLiabilitiesAssetsLiabilities
Cash flow hedges:      
Interest rate contracts:      
Swaps hedging commercial loans$21,400 $— $— $16,650 $— $— 
Fair value hedges:   
Interest rate contracts:   
Swaps hedging long-term debt 19,268 — (66)16,393 — (68)
Swaps hedging AFS securities8,627 — — 7,097 — — 
Total27,895 — (66)23,490 — (68)
Not designated as hedges:      
Client-related and other risk management:      
Interest rate contracts:      
Swaps295,199 599 (2,620)155,670 579 (2,665)
Options44,020 164 (188)29,840 172 (192)
Forward commitments211 — — 1,495 8 (2)
Other3,337 — — 3,823 1 — 
Equity contracts36,590 1,058 (1,481)33,185 644 (901)
Credit contracts:
Trading assets120 — — 140 — — 
Loans and leases465 — (1)394 — — 
Risk participation agreements7,473 — (2)6,824 — (3)
Total return swaps1,802 62 (7)1,729 81 (2)
Foreign exchange contracts23,940 284 (277)19,022 364 (380)
Commodity9,062 439 (429)4,881 444 (447)
Total422,219 2,606 (5,005)257,003 2,293 (4,592)
Mortgage banking:      
Interest rate contracts:      
Swaps277 — — 115 — — 
Options(1)
400 1 — 400 1 — 
Interest rate lock commitments1,426 2 (16)999 1 (17)
When issued securities, forward rate agreements and forward commitments(1)
2,600 39 — 1,728 24 (6)
Other99 — — 140 1 — 
Total4,802 42 (16)3,382 27 (23)
MSRs:      
Interest rate contracts:      
Swaps14,605 — — 14,566 — — 
Options(1)
15,882 80 (89)15,505 125 (48)
When issued securities, forward rate agreements and forward commitments(1)
871 — (7)884 8 (15)
Other2,161 — (1)1,532 — (3)
Total33,519 80 (97)32,487 133 (66)
Total derivatives not designated as hedges460,540 2,728 (5,118)292,872 2,453 (4,681)
Total derivatives$509,835 2,728 (5,184)$333,012 2,453 (4,749)
Gross amounts in the Consolidated Balance Sheets:    
Amounts subject to master netting arrangements and exchange traded derivatives
(1,344)1,344  (1,223)1,223 
Cash collateral (received) posted for amounts subject to master netting arrangements
 (579)712  (546)555 
Net amount $805 $(3,128) $684 $(2,971)
(1)In the second quarter of 2023, Truist reclassified TBA MBS options into the options line item. Prior periods were reclassified to conform to the current presentation.
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:
June 30, 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$1,738 $(1,438)$300 $— $300 
Derivatives not subject to master netting arrangement or similar arrangement83 — 83 — 83 
Exchange traded derivatives907 (485)422 — 422 
Total derivative assets$2,728 $(1,923)$805 $— $805 
Derivative liabilities:
Derivatives subject to master netting arrangement or similar arrangement$(4,020)$1,571 $(2,449)$126 $(2,323)
Derivatives not subject to master netting arrangement or similar arrangement(678)— (678)— (678)
Exchange traded derivatives(486)485 (1)— (1)
Total derivative liabilities$(5,184)$2,056 $(3,128)$126 $(3,002)
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:
June 30, 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)
$37,365 $(576)$(4)$38,773 $(630)$(4)
Loans and leases347 — 9 353 — 10 
Long-term debt30,333 (579)(141)25,378 (780)218 
(1)The amortized cost of AFS securities was $44.6 billion at June 30, 2023 and $46.2 billion at December 31, 2022. Further, as of June 30, 2023, closed portfolios of securities hedged under the portfolio layer method have an amortized cost of $23.0 billion, of which $8.6 billion was designated as hedged. The remaining amount of amortized cost is from securities with terminated hedges where the basis adjustment is being amortized into earnings using the effective interest method over the contractual life of the security.
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 June 30,Six Months Ended June 30,
(Dollars in millions)2023202220232022
Pre-tax gain (loss) recognized in OCI:
Commercial loans$(419)$59 $(256)$59 
Pre-tax gain (loss) reclassified from AOCI into interest expense:
Long-term debt— (5)— (11)
Commercial Loans(5)— (5)— 

The following table summarizes the impact on net interest income related to fair value hedges:
Three Months Ended June 30,Six Months Ended June 30,
(Dollars in millions)2023202220232022
Investment securities:
Amounts related to interest settlements$87 $9 $163 $4 
Recognized on derivatives42 60 (53)474 
Recognized on hedged items
(31)(42)75 (444)
Net income (expense) recognized(1)
98 27 185 34 
Loans and leases:
Recognized on hedged items
— — (1)(1)
Net income (expense) recognized— — (1)(1)
Long-term debt:
Amounts related to interest settlements(47)3 (93)19 
Recognized on derivatives(291)(38)(135)(467)
Recognized on hedged items
299 82 157 568 
Net income (expense) recognized(39)47 (71)120 
Net income (expense) recognized, total
$59 $74 $113 $153 
(1)Includes $12 million and $22 million of income recognized for the three and six months ended June 30, 2023, respectively, and $17 million and $25 million for the three and six months ended June 30, 2022, respectively, from securities with terminated hedges that were reclassified to HTM. The income recognized was offset by the amortization of the fair value mark.
The following table presents information about the Company’s cash flow and fair value hedges:
(Dollars in millions)Jun 30, 2023Dec 31, 2022
Cash flow hedges:
Net unrecognized after-tax gain (loss) on active hedges recorded in AOCI$(311)$(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
(142)(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
5 years6 years
Fair value hedges:
Unrecognized pre-tax net gain (loss) on terminated hedges (to be recognized as interest primarily through 2033)(1)
$290 $669 
Portion of pre-tax net gain (loss) on terminated hedges to be recognized as a change in interest during the next 12 months
39 163 
(1)Includes deferred gains that are recorded in AOCI as a result of the reclassification to HTM of previously hedged securities of $436 million at June 30, 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 June 30,Six Months Ended June 30,
(Dollars in millions)Income Statement Location2023202220232022
Client-related and other risk management:  
Interest rate contractsInvestment banking and trading income and other income$52 $72 $86 $128 
Foreign exchange contractsInvestment banking and trading income and other income(26)147 (29)179 
Equity contractsInvestment banking and trading income and other income(22)2 (20)7 
Credit contractsInvestment banking and trading income and other income(26)83 (59)91 
Commodity contractsInvestment banking and trading income7 (5)17 — 
Mortgage banking:  
Interest rate contracts - residentialMortgage banking income23 217 22 478 
Interest rate contracts - commercialMortgage banking income(2)— (1)(1)
MSRs:  
Interest rate contracts - residentialMortgage banking income(83)(265)(82)(614)
Interest rate contracts - commercialMortgage banking income(7)(5)(4)(14)
Total$(84)$246 $(70)$254 

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 June 30, 2023, the remaining terms on these risk participations ranged from less than one year to 14 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)Jun 30, 2023Dec 31, 2022
Risk participation agreements:
Maximum potential amount of exposure
$543 $575 
Total return swaps:
Cash collateral held461 453 

The following table summarizes collateral positions with counterparties:
(Dollars in millions)Jun 30, 2023Dec 31, 2022
Dealer and other counterparties:
Cash and other collateral received from counterparties$579 $542 
Derivatives in a net gain position secured by collateral received668 618 
Unsecured positions in a net gain with counterparties after collateral postings
89 76 
Cash collateral posted to counterparties837 590 
Derivatives in a net loss position secured by collateral944 692 
Central counterparties clearing:
Cash collateral, including initial margin, received from central clearing parties— 4 
Cash collateral, including initial margin, posted to central clearing parties154 45 
Derivatives in a net loss position2 13 
Derivatives in a net gain position10 12 
Securities pledged to central counterparties clearing1,000 639