Company: TFC
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0000092230-25-000020
Chunk: 449

Company: TRUIST FINANCIAL CORP
Filing Date: 2025-02-25
Form: 10-K
Item: Item 7A
Chunk 449
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 $197 Foreign exchange contractsInvestment banking and trading income and other income236 7 236 Equity contractsInvestment banking and trading income, other income, and personnel expense45 (29)5Credit contractsInvestment banking and trading income and other income(35)(112)53 Commodity contractsInvestment banking and trading income13 21 11 Mortgage banking:   Interest rate contracts – residentialMortgage banking income4 37 596Interest rate contracts – commercialMortgage banking income— (1)(1)MSRs:   Interest rate contracts – residentialMortgage banking income(247)(137)(792)Interest rate contracts – commercialMortgage banking income(10)(3)(22)Total$67 $(113)$283 

Truist Financial Corporation   155

Credit Derivative InstrumentsAs part of the Company’s investment banking and capital market business, the Company enters into contracts that are, in form or substance, written guarantees; specifically, risk participations, TRS, and credit default swaps. The Company accounts for these contracts as derivatives.Truist has entered into risk participation agreements to share the credit exposure with other financial institutions on client-related interest rate derivative contracts. Under these agreements, the Company has guaranteed payment to a dealer counterparty in the event the counterparty experiences a loss on the derivative due to a failure to pay by the counterparty’s client. The Company manages its payment risk on its risk participations by monitoring the creditworthiness of the underlying client through the normal credit review process that the Company would have performed had it entered into a derivative directly with the obligors. At December 31, 2024, the remaining terms on these risk participations ranged from less than one year to 10 years. The potential future exposure represents the Company’s maximum estimated exposure to written risk participations, as measured by projecting a maximum value of the guaranteed derivative instruments based on scenario simulations and assuming 100% default by all obligors on the maximum value.The Company has also entered into TRS contracts on loans and bonds. To mitigate its credit risk, the Company typically receives initial margin from the counterparty upon entering into the TRS and variation margin if the fair value of the underlying reference assets deteriorates. For additional information on the Company’s TRS contracts, see “Note 16. Commitments and Contingencies.”The Company enters into credit default swaps to hedge credit risk associated with certain loans and leases. The Company accounts for these