Truist Financial has agreed to sell $7.7 billion of unsecured consumer loans to Carlyle, its second large loan sale in a matter of weeks. The loans make up substantially all the assets of LightStream, Truist's online lending platform, and the agreement was signed on 14 October, according to the bank's third-quarter earnings release on Friday. The release gives no price. Banking Dive reports estimated net proceeds of $7.2 billion and a closing expected in the fourth quarter.
The same release carried a $1.447 billion pre-tax loss, or $0.90 a share, on the sale of available-for-sale securities. That is the main reason reported and adjusted earnings sit so far apart: diluted earnings were $0.56 a share, against $1.04 a year earlier, while adjusted earnings were $1.16, up 12 per cent. Net income fell to $0.80 billion from $1.45 billion, and net income available to common shareholders to $0.68 billion from $1.35 billion.
What Carlyle is buying
The portfolio is made up of fixed-rate, fully amortising personal loans to prime and super-prime borrowers, a seasoned pool of consumer credit, according to Alternative Credit Investor. Carlyle's asset-backed finance team, part of a Global Credit platform with about $211 billion under management at 30 June, is leading the purchase.
"Banks are increasingly turning to private capital to help manage their balance sheets," said Akhil Bansal, a partner and head of asset-backed finance at Carlyle, as quoted by the same outlet. The $7.7 billion describes the size of the loan book, not a disclosed purchase price, and neither company has published one.
The seller's case
Chief Financial Officer Mike Maguire described the sale as "an exit from a non-core, loan-only business that is generating returns well below our targets," Banking Dive reports. Chief Executive Mike Lyons, six weeks into the job, said Truist has "operated too many nationally focused, standalone, single-product businesses," and that "we don't need to reinvent Truist to win."
This is the second disposal. Truist also sold $5.5 billion of near-prime auto loans tied to Regional Acceptance Corporation, a sale completed in the third quarter that produced $5.2 billion of net proceeds, per Banking Dive. The release records a $66 million loss on that sale in other income, and the adjusted figures exclude $106 million of pre-tax costs tied to it, as well as a $581 million pre-tax loan-loss reserve recapture. By this publication's arithmetic, the two sales cover $13.2 billion of loans, about 2.4 per cent of the bank's $554 billion in assets, and are expected to bring about $12.4 billion of net proceeds.
The securities loss
The mechanism is a familiar one for banks holding bonds bought when rates were lower: sell them, accept the loss now, and reinvest at higher yields. It is a different kind of charge from the one that hit Bank of America this week, a $1.2 billion Treasury penalty, but it has the same effect on the headline: a reported figure far below the adjusted one. Truist's earnings presentation says a further repositioning of the securities portfolio is meant to offset the capital freed up by the LightStream sale. By this publication's arithmetic, the pre-tax loss is about 1.8 times the quarter's net income.
The adjusted figures tell a steadier story. Adjusted net income available to common shareholders was $1.4 billion, against $1.35 billion a year earlier. Taxable-equivalent net interest income rose 0.7 per cent to $3.71 billion, wealth management income rose 8.8 per cent to $407 million, and noninterest expense rose to $3.11 billion from $3.01 billion. Net charge-offs were 0.77 per cent of average loans, against 0.48 per cent a year earlier; the release says 0.39 percentage points of that related to the auto-loan sale. The bank repurchased $1.2 billion of stock and declared a dividend of $0.52 a share.
People and targets
Dontá Wilson, the chief consumer and small business banking officer, is leaving, Banking Dive reports. He was the last person remaining from the executive team formed by the 2019 merger of BB&T and SunTrust. Shimna Sameer, hired from Bank of America in July to run wealth management, will succeed him as chief consumer banking officer. Jeff Warner, a 25-year PNC veteran, becomes chief small business banking officer, and D. Steve Boland, formerly of Bank of America, was named a vice chair.
Truist is targeting a 15 per cent return on tangible common equity in 2027 and 16 to 18 per cent over the long term, according to Banking Dive, and its strategic review is due to finish by year-end. The release puts the third quarter's return at 7.2 per cent reported and 14.6 per cent adjusted. Jefferies analyst David Chiaverini wrote that "the turnaround is fully in motion," as Banking Dive quotes him.
What to watch
The first test is the close of the LightStream sale, and whether Truist discloses a price and any gain or loss on it. The second is the strategic review: which businesses stay, and how much capital goes back to shareholders as these loans leave the balance sheet. The third is the return target. Selling businesses that earn below the bank's targets helps the ratio. It also shrinks the base that has to produce the earnings.
Sources
- Truist Financial, third-quarter 2026 earnings release (Exhibit 99.1 to Form 8-K), 16 October 2026: https://www.sec.gov/Archives/edgar/data/0000092230/000009223026000108/ex991-3q26.htm
- Truist Financial, Form 8-K, 16 October 2026: https://www.sec.gov/Archives/edgar/data/0000092230/000009223026000108/tfc-20261016.htm
- Banking Dive, "Truist consumer-bank chief is out in leadership shakeup", 16 October 2026: https://www.bankingdive.com/news/truist-lyons-wilson-consumer-banking-leadership-shakeup-earnings/833247/
- Alternative Credit Investor, Carlyle to acquire $7.7bn consumer loan portfolio from Truist, 16 October 2026: https://alternativecreditinvestor.com/2026/10/16/carlyle-to-acquire-7-7bn-consumer-loan-portfolio-from-truist/
Earnings figures, the securities loss, the RAC items, the net charge-off ratio, the buyback, the dividend, total assets and the description of the LightStream sale come from Truist's third-quarter earnings release, filed as Exhibit 99.1 to its Form 8-K of 16 October 2026. The release gives no price, proceeds or closing date for the LightStream sale; the $7.2 billion proceeds estimate, the fourth-quarter closing, the RAC proceeds, the executive quotes, the leadership changes, the return targets and the Jefferies note come from Banking Dive of 16 October. The portfolio description and the Carlyle quotes come from Alternative Credit Investor of 16 October. Totals and ratios are this publication's arithmetic. The analysis is our own.
Topics businessbanksprivate credit
