Fair Value Disclosures

3 Months Ended

Mar. 31, 2024

Recurring Fair Value Measurements

Accounting standards define fair value as the price that would be received on the measurement date to sell an asset or the price paid to transfer a liability in the principal or most advantageous market available to the entity in an orderly transaction between market participants, with a three-level measurement hierarchy:

•Level 1: Quoted prices for identical instruments in active markets

•Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets

•Level 3: Valuations derived from valuation techniques in which one or more significant inputs are unobservable

The following tables present fair value information for assets and liabilities measured at fair value on a recurring basis:


March 31, 2024 (Dollars in millions)	Total		Level 1		Level 2		Level 3		Netting Adjustments(1)
Assets:
Trading assets:
U.S. Treasury	$	143	$	—	$	143	$	—	$	—
GSE	42		—		42		—		—


States and political subdivisions	761		—		761		—		—

Corporate and other debt securities	1,940		—		1,940		—		—
Loans	1,692		—		1,692		—		—
Other	690		619		71		—		—
Total trading assets	5,268		619		4,649		—		—
AFS securities:
U.S. Treasury	9,020		—		9,020		—		—
GSE	350		—		350		—		—
Agency MBS – residential	51,150		—		51,150		—		—
Agency MBS – commercial	2,208		—		2,208		—		—
States and political subdivisions	419		—		419		—		—
Non-agency MBS	2,884		—		2,884		—		—
Other	19		—		19		—		—
Total AFS securities	66,050		—		66,050		—		—
LHFS at fair value	1,201		—		1,201		—		—
Loans and leases	14		—		—		14		—
Loan servicing rights at fair value	3,417		—		—		3,417		—
Other assets:
Derivative assets	1,088		1,535		1,858		4		(2,309)
Equity securities	271		264		7		—		—

Total assets	$	77,309	$	2,418	$	73,765	$	3,435	$	(2,309)
Liabilities:
Interest-bearing deposits:
Brokered time deposits	$	23	$	—	$	23	$	—	$	—
Short-term borrowings:
Securities sold short	2,034		110		1,924		—		—
Other liabilities:
Derivative liabilities	2,990		826		4,729		25		(2,590)
Total liabilities	$	5,047	$	936	$	6,676	$	25	$	(2,590)


December 31, 2023 (Dollars in millions)	Total		Level 1		Level 2		Level 3		Netting Adjustments(1)
Assets:
Trading assets:
U.S. Treasury	$	144	$	—	$	144	$	—	$	—
GSE	50		—		50		—		—


States and political subdivisions	760		—		760		—		—

Corporate and other debt securities	1,293		—		1,293		—		—
Loans	1,575		—		1,575		—		—
Other	510		461		49		—		—
Total trading assets	4,332		461		3,871		—		—
AFS securities:
U.S. Treasury	10,041		—		10,041		—		—
GSE	362		—		362		—		—
Agency MBS – residential	51,289		—		51,289		—		—
Agency MBS – commercial	2,248		—		2,248		—		—
States and political subdivisions	425		—		425		—		—
Non-agency MBS	2,981		—		2,981		—		—
Other	20		—		20		—		—
Total AFS securities	67,366		—		67,366		—		—
LHFS at fair value	852		—		852		—		—
Loans and leases	15		—		—		15		—
Loan servicing rights at fair value	3,378		—		—		3,378		—
Other assets:
Derivative assets	951		956		1,867		5		(1,877)
Equity securities	360		245		115		—		—

Total assets	$	77,254	$	1,662	$	74,071	$	3,398	$	(1,877)
Liabilities:


Short-term borrowings:
Securities sold short	$	1,625	$	185	$	1,440	$	—	$	—
Other liabilities:
Derivative liabilities	2,597		487		4,171		24		(2,085)
Total liabilities	$	4,222	$	672	$	5,611	$	24	$	(2,085)

(1)Refer to “Note 16. Derivative Financial Instruments” for additional discussion on netting adjustments.

At March 31, 2024 and December 31, 2023, investments totaling $464 million and $459 million, respectively, have been excluded from the table above as they are valued based on net asset value as a practical expedient. These investments primarily consist of certain SBIC funds.

The following discussion focuses on the valuation techniques and significant inputs for brokered time deposit liabilities that are measured at fair value on a recurring basis. For additional information on the valuation techniques and significant inputs for Level 2 and Level 3 assets and liabilities that are measured at fair value on a recurring basis, see “Note 18. Fair Value Disclosures” of the Annual Report on Form 10-K for the year ended December 31, 2023.

Brokered time deposits: The Company has elected to measure certain CDs that contain embedded derivatives at fair value. This fair value election better aligns the economics of the CDs with the Company’s risk management strategies. The Company elects, on an instrument by instrument basis, whether a new issuance will be measured at fair value. The Company has classified CDs measured at fair value as level 2 instruments due to the Company’s ability to observe all significant inputs to model-derived valuations in active markets. The Company employs a discounted cash flow approach based on observable market interest rates for the term of the CD and an estimate of the Bank’s credit risk. For any embedded derivative features, the Company uses the same valuation methodologies as if the derivative were a standalone derivative, as discussed in the “Derivative assets and liabilities” section in “Note 18. Fair Value Disclosures” of the Annual Report on Form 10-K for the year ended December 31, 2023.

Activity for Level 3 assets and liabilities is summarized below:




Three Months Ended March 31, 2024 and 2023 (Dollars in millions)	Loans and Leases		Loan Servicing Rights		Net Derivatives
Balance at January 1, 2023	$	18	$	3,758	$	(36)
Total realized and unrealized gains (losses):
Included in earnings	—		(5)		(2)


Issuances	—		48		(2)
Sales	—		(428)		—
Settlements	(1)		(70)		22


Balance at March 31, 2023	$	17	$	3,303	$	(18)
Balance at January 1, 2024	$	15	$	3,378	$	(19)
Total realized and unrealized gains (losses):
Included in earnings	—		82		(3)


Issuances	—		32		(1)
Sales	—		(1)		—
Settlements	(1)		(74)		2


Balance at March 31, 2024	$	14	$	3,417	$	(21)
Change in unrealized gains (losses) included in earnings for the period, attributable to assets and liabilities still held at March 31, 2024	$	—	$	82	$	(9)









































Primary income statement location of realized gains (losses) included in earnings	Other income		Mortgage banking income		Mortgage banking income

Fair Value Option

The following table details the fair value and UPB of certain loans and time deposits that were elected to be measured at fair value:


	March 31, 2024						December 31, 2023
(Dollars in millions)	Fair Value		UPB		Difference		Fair Value		UPB		Difference
Trading loans	$	1,692	$	1,775	$	(83)	$	1,575	$	1,664	$	(89)
Loans and leases	14		15		(1)		15		16		(1)
LHFS at fair value	1,201		1,185		16		852		828		24
Brokered time deposits	23		23		—		—		—		—

Nonrecurring Fair Value Measurements

The following table provides information about certain assets measured at fair value on a nonrecurring basis still held as of period end. The carrying values represent end of period values, which approximate the fair value measurements that occurred on the various measurement dates throughout the period. These assets are considered to be Level 3 assets.


(Dollars in millions)	Mar 31, 2024		Dec 31, 2023
Carrying value:
LHFS	$	8	$	19
Loans and leases	659		840
Other	244		454

The following table provides information about valuation adjustments for certain assets measured at fair value on a nonrecurring basis. The valuation adjustments represent the amounts recorded during the period regardless of whether the asset is still held at period end.


	Three Months Ended March 31,
(Dollars in millions)	2024		2023
Valuation adjustments:
LHFS	$	(9)	$	—
Loans and leases	(272)		(166)
Other	(83)		(44)

LHFS with valuation adjustments in the table above consisted primarily of residential mortgages and commercial loans that were valued using market prices and measured at LOCOM. The table above excludes $44 million and $409 million of LHFS carried at cost at March 31, 2024 and December 31, 2023, respectively, that did not require a valuation adjustment during the period. The remainder of LHFS is carried at fair value.

Loans and leases consist of larger commercial loans and leases that are collateral-dependent and other secured loans and leases that have been charged-off to the fair value of the collateral. Valuation adjustments for loans and leases are primarily recorded in the Provision for credit losses in the Consolidated Statement of Income. Refer to “Note 1. Basis of Presentation” in Truist’s Annual Report on Form 10-K for the year ended December 31, 2023 for additional discussion of individually evaluated loans and leases.

Other includes foreclosed real estate, other foreclosed property, partnership investments, premises and equipment, OREO, and held for sale operating leases, and consists primarily of residential homes, commercial properties, vacant lots, and automobiles. Partnership investments are measured based on discounted expected future cash flows. The remaining assets are measured at LOCOM, less costs to sell.

Financial Instruments Not Recorded at Fair Value

For financial instruments not recorded at fair value, estimates of fair value are based on relevant market data and information about the instruments. Values obtained relate to trading without regard to any premium or discount that may result from concentrations of ownership, possible tax ramifications, estimated transaction costs that may result from bulk sales, or the relationship between various instruments.

An active market does not exist for certain financial instruments. Fair value estimates for these instruments are based on current economic conditions and interest rate risk characteristics, loss experience, and other factors. Many of these estimates involve uncertainties and matters of significant judgment and cannot be determined with precision. Therefore, the fair value estimates in many instances cannot be substantiated by comparison to independent markets. In addition, changes in assumptions could significantly affect these fair value estimates. Financial assets and liabilities not recorded at fair value are summarized below:


		March 31, 2024				December 31, 2023
(Dollars in millions)	Fair Value Hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
HTM securities	Level 2	$	53,369	$	43,041	$	54,107	$	44,630
Loans and leases HFI, net of ALLL	Level 3	302,407		294,759		307,248		300,830
Financial liabilities:
Time deposits	Level 2	41,836		41,641		43,561		43,368
Long-term debt	Level 2	39,071		38,759		38,918		38,353

The carrying value of the RUFC, which approximates the fair value of unfunded commitments, was $297 million and $295 million at March 31, 2024 and December 31, 2023, respectively.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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