What Falling Interest Rates Mean for Truist's Net Interest Income

Core Insights - Truist Financial Corporation (TFC) has experienced a steady rise in net interest income (NII) with a five-year compound annual growth rate (CAGR) of 14% from 2019 to 2024, despite declines in 2021 and 2024 [1][10] - The outlook for TFC's NII expansion is positive due to falling interest rates and easing lending standards, with interest rates currently at 3.50-3.75% [2] - Management anticipates a 2% sequential increase in NII for the fourth quarter of 2025, driven by loan growth, higher client deposits, and lower deposit costs [3][10] NII Growth Projections - NII is expected to grow by 2.3%, 4%, and 2.7% in 2025, 2026, and 2027 respectively, supported by stabilizing deposit costs and increasing loan demand [4] - The decline in interest rates is expected to improve borrower solvency and reduce delinquency rates, further supporting NII growth [3] Peer Comparison - Fifth Third Bancorp (FITB) has a five-year CAGR of 4.2% in NII, with a year-over-year increase of 6.2% in the first nine months of 2025 [6] - U.S. Bancorp (USB) has a five-year CAGR of 4.4% in NII, with a 2% year-over-year increase in the first nine months of 2025 [7] Market Performance - Truist's shares have risen 13.2% over the past six months, compared to the industry's growth of 18.2% [9]