Truist Financial Corporation announced an agreement to sell $5.5 billion in auto loans, representing substantially all assets of Regional Acceptance Corporation (RAC), as part of a strategic decision to exit its near-prime auto lending business. The transaction is expected to close in the late third quarter of 2026 or early fourth quarter of 2026, contingent upon the satisfaction of customary closing conditions.
The company disclosed that RAC pre-tax earnings were approximately breakeven through the six months ended June 30, 2026. The sale is projected to generate $5.2 billion in net proceeds and a loan loss reserve recapture of $535 million. These funds are intended to be used to repay wholesale borrowings and reposition certain available-for-sale securities.
Truist stated that the transaction is expected to create $945 million of Common Equity Tier 1 (CET1) capital, representing a 22 basis point increase. The company anticipates the deal will reduce non-performing loans (NPLs) by more than 10 basis points as of June 30, 2026, and reduce net charge-offs (NCOs) by approximately 10 basis points annually. The firm noted that its outlook for the third quarter of 2026 and full-year 2026 remains unchanged, excluding the impact of these strategic actions.
Truist highlighted that the sale sharpens the company's strategic focus by exiting non-core and less profitable activities, consistent with previous actions such as the discontinuation of Marine and RV lending. The company also affirmed its 2026 share repurchase target remains at $5 billion. The firm noted that broader strategic reviews are ongoing.
