Truist Financial Corporation is exiting the near-prime auto lending business, agreeing to sell $5.5 billion of near-prime auto loans that represent substantially all the assets of its Regional Acceptance Corporation subsidiary. The deal, expected to close in late third-quarter 2026 or early fourth-quarter 2026, is part of a broader portfolio review under new CEO Mike Lyons. Chief financial officer Mike Maguire said at the Barclays Global Financial Services Conference that RAC was a loan-only, loan-first national business offering limited opportunities to build broader client relationships, and that yields of roughly 12 percent against funding costs of around 4 percent and loss experience in the 7 percent to 8 percent range left limited economic value. The transaction is expected to generate $5.2 billion of net proceeds and a $535 million loan-loss reserve recapture, creating approximately $945 million, or 22 basis points, of Common Equity Tier 1 capital, while non-performing loans are projected to decline by more than 10 basis points and annualized net charge-offs to fall by about 10 basis points, an improvement of roughly 20 percent against Truist's 55-basis-point 2026 guidance. Truist expects modest earnings and Return on Tangible Common Equity accretion in 2027 and its $5 billion 2026 share-repurchase target remains unchanged, though the exit is expected to reduce reported net interest margin by roughly 4 to 5 basis points net of a securities repositioning.
Truist Financial CorpTruist is selling $5.5B of near-prime auto loans, generating $5.2B net proceeds, a $535M reserve recapture, ~$945M CET1 capital, and lower charge-offs/NPLs.
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