Truist Financial Corporation (NYSE:TFC) is one of the 10 Best Bank Stocks to Buy in 2026.
On February 9, JPMorgan analyst Vivek Juneja raised his target price on Truist Financial by 10.7% to $57.00 (from $51.50) but maintained his Neutral rating on the stock. This target price change comes as JPMorgan updated its large-cap bank forecasts following the release of the 4th quarter results.
The firm prefers bank stocks in this market cycle for five reasons. (1) Good economic trends, (2) Steady fundamentals, (3) Sticky inflation, which could prevent the US Fed from cutting rates too much in the long term (although he does think the Fed will cut rates twice in 2026), (4) Favorable regulatory environment, and (5) An uptick in bank consolidations, as shown by the recent M&A activity amongst banks.
Truist Financial, on January 21, released its Q4 2025 earnings. The report showed net income available to common shareholders grew 5.7% YoY to $1.29 billion (from $1.22 billion). On a per diluted share basis, earnings grew 9.9% YoY to $1.00 (from $0.91). This earnings growth yielded a modest increase in both return on average assets (3 basis points YoY to 0.99%, from 0.96%) and return on average common equity (10 basis points YoY to 8.5% from 8.4%).
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The earnings growth was driven by a 3.1% YoY increase in net interest income (NII) to $3.70 billion (from $3.59 billion), which in turn was driven purely by earning assets growth as net interest margin (NIMs) was flat. Earning assets grew 2.5% YoY to $484.6 billion (from $472.6 billion), virtually all of which came from a 7.4% YoY expansion in the bank’s loan book to $330.4 billion (from $306.4 billion). Cash and investment securities, meanwhile, fell 4.8% YoY to $158.6 billion (from $165.5 billion).
The $12 billion YoY increase in earning asset base was supported by a $9.8 billion YoY increase in deposits to $400.5 billion (from $390.5 billion). Debt supplemented the bank’s funding needs, growing $5.6 billion YoY to $69.8 billion (from $64.2 billion).
NIMs, meanwhile, were flat YoY at 3.07%, as the effects of the improvement in funding costs perfectly offset the deterioration in earning asset yields. The bank’s average funding cost improved by 35 basis points YoY to 2.67% (from 3.02%), while earnings yield fell 20 basis points YoY to 5.05% (from 5.25%).
Asset quality was relatively stable across multiple metrics. Nonperforming loans (as a % of loans) increased 1 basis point YoY to 0.48% (from 0.47%), net charge-offs (as a % of loans) decreased 2 basis points YoY to 0.57% (from 0.59%), while credit costs (as a % of loans) increased 1 basis point YoY to 0.62% (from 0.61%).
