{"id":24820,"date":"2026-01-21T22:47:03","date_gmt":"2026-01-21T22:47:03","guid":{"rendered":"https:\/\/finderica.com\/?p=24820"},"modified":"2026-01-21T22:47:03","modified_gmt":"2026-01-21T22:47:03","slug":"truist-settles-15-year-old-legal-saga-causing-earnings-hit","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=24820","title":{"rendered":"Truist settles 15-year-old legal saga, causing earnings hit"},"content":{"rendered":"<div wp_automatic_readability=\"167.92917251052\">\n<ul class=\"rte2-style-ul\">\n<li><b>Key insight:<\/b> Truist&#8217;s fourth-quarter earnings were hurt by $130 million in legal-related fees and $63 million in severance costs.<\/li>\n<li><b>What&#8217;s at stake:<\/b> As part of the settlement agreement related to a court case involving overdraft fees, the bank has agreed to pay up to $240 million.<\/li>\n<li><b>Forward look: <\/b>Truist Chief Financial Officer Mike Maguire said restructuring charges should be &#8220;lower in 2026, modestly,&#8221; though there will still be severance-related costs.<\/li>\n<\/ul>\n<p><ps-link>Truist Financial<\/ps-link><span class=\"QModMiniQuotesRichText\"> <span class=\"QModMiniQuotesRichText-tool\"> <span data-qmod-tool=\"miniquotes\" data-qmod-params=\"{\" lang\":\"en\",=\"\" \"symbol\":=\"\" \"tfc\"}\"=\"\" class=\"qtool\"><\/span> <\/span> <\/span> has agreed to pay up to $240 million to resolve a long-running legal saga, and that settlement ate into its fourth-quarter profits, the company announced Wednesday.<\/p>\n<p>Processing Content<\/p>\n<p>The quarterly results, which fell short of Wall Street&#8217;s expectations, were also hurt by $63 million of expenses tied to employee severance packages.<\/p>\n<p>The settlement agreement, which is subject to court approval, caps a 15-year class-action suit about overdraft fees that arose at one of <ps-link>Truist&#8217;s<\/ps-link> predecessor banks.<\/p>\n<p>The plaintiff, who died in 2014, had argued that all of the overdraft fees that Atlanta-based SunTrust Banks charged to his account were actually interest charges and therefore were subject to the maximum interest-rate limit laws of the state of Georgia, according to <ps-link>Truist&#8217;s<\/ps-link> most recent quarterly filing.<\/p>\n<p>The plaintiff later argued that SunTrust violated civil and criminal usury laws, and sought damages on a class-wide basis, including refunds of up to $452 million for challenged overdraft fees and pre-judgment interest.<\/p>\n<p>Earlier this month, the U.S. Supreme Court declined to hear <ps-link>Truist&#8217;s<\/ps-link> appeal of a Georgia Supreme Court decision that was unfavorable to <ps-link>Truist<\/ps-link>. The Charlotte, North Carolina, bank had taken issue with the case&#8217;s status as a class-action suit.<\/p>\n<p>The settlement agreement added $130 million to <ps-link>Truist&#8217;s<\/ps-link> fourth-quarter expenses. It wiped out 12 cents of earnings per share for the quarter and 18 cents per share for the year.<\/p>\n<p>On Wednesday, the $542 billion-asset bank declined to comment further on the settlement agreement, which is expected to be included with a motion for preliminary approval when it is filed with the court.<\/p>\n<p>Overall, <ps-link>Truist&#8217;s<\/ps-link> noninterest expenses totaled $3.17 billion for the fourth quarter, up about 4% from the same quarter in 2024. For all of 2025, the bank&#8217;s expenses were $12.08 billion, up roughly half of one percent compared with the prior year and coming in under the bank&#8217;s 2025 guidance.<\/p>\n<h2 class=\"cms-heading-h2 HeadingH2\">The cost of job cuts<\/h2>\n<p>The severance costs, which shaved four cents off <ps-link>Truist&#8217;s<\/ps-link> fourth-quarter earnings per share, are among the bank&#8217;s ongoing restructuring charges. Such charges have totaled $358 million over the past two years. In addition to severance costs, the restructuring charges include occupancy fees, professional services costs and outside processing fees.<\/p>\n<p><ps-link>Truist&#8217;s<\/ps-link> restructuring charges should be &#8220;lower in 2026, modestly,&#8221; Chief Financial Officer Mike Maguire told analysts Wednesday during the company&#8217;s fourth-quarter earnings call. The bank, which struggled for years with higher-than-expected costs, initiated an organizational revamp in the fall of 2023 to <ps-link><u>reduce expenses by $750 million<\/u><\/ps-link> over a 12- to 18-month period.<\/p>\n<div class=\"Enhancement\" data-align-center=\"\">\n<div class=\"Enhancement-item\">\n<figure class=\"Figure\">\n<div class=\"Flourish\">\n<div class=\"flourish-embed flourish-chart\" data-src=\"https:\/\/www.americanbanker.com\/news\/visualisation\/27320009?1792826\"><\/div>\n<\/div>\n<\/figure>\n<\/div><\/div>\n<p>&#8220;Obviously, we&#8217;ll continue to have severance expense,&#8221; Maguire said in response to an analyst&#8217;s question about what to expect in 2026. &#8220;We&#8217;ll continue to have facilities-related charges and the like. But I do think that there is an opportunity and an expectation that they&#8217;ll be lower over time.&#8221;<\/p>\n<p><ps-link>Truist&#8217;s<\/ps-link> headcount has ebbed and flowed over the past year, according to data provided in its fourth-quarter earnings press release.<\/p>\n<p>At the end of December 2024, the company had 37,661 full-time equivalent jobs. By the end of September 2025, that number had risen to 38,534. It then dropped to 38,062 by the end of December 2025, a quarter-over-quarter decline of about 1.2%.<\/p>\n<p>The ups and downs in headcount reflect the bank&#8217;s shift away from temporary contract workers, Maguire said on the call. &#8220;So in fact you might actually see headcount higher throughout the course of the year as we move from contractor to full-time employees,&#8221; he added. But &#8220;cost per full-time equivalent would go down, assuming we do a good job executing that strategy.&#8221;<\/p>\n<p>For the quarter ending Dec. 31, <ps-link>Truist<\/ps-link> reported earnings per share of $1.00, missing analysts&#8217; average estimate by 9 cents, according to S&amp;P Capital IQ.<\/p>\n<p>Net income for the quarter was $1.35 billion, up 6.1% year over year. Net interest income rose 3.06% from the prior-year quarter to $3.7 billion, as average total loans increased and average deposit costs declined. Fee income of $1.55 billion rose 5.17%, due to higher investment banking and trading income and wealth management income.<\/p>\n<p>Revenues totaled $5.25 billion, up from $5.06 billion in the same quarter of 2024.<\/p>\n<p>During Wednesday&#8217;s call, <ps-link>Truist<\/ps-link> CEO Bill Rogers reiterated the bank&#8217;s expectation that it will achieve a return on tangible common equity of 15% for all of 2027. For 2025, that profitability metric came in at 12.7%.<\/p>\n<p>When pressed by an analyst about the post-2027 outlook for return on tangible common equity, Rogers declined to get specific. <\/p>\n<p>&#8220;Past 2027 \u2026 I don&#8217;t want to sort of speculate as to what all those things might be,&#8221; he said.<\/p>\n<p>He cited the possibility that the company might be in a different capital position by that time, and he said the economic environment after 2027 could also be a factor.<\/p>\n<p>The bank said Wednesday that it plans to buy back more common shares this year than last year \u2014 about $4 billion in total, including roughly $1 billion by the end of March. <\/p>\n<p>In 2025, <ps-link>Truist<\/ps-link> repurchased $2.5 billion of common shares. In December 2025, its board authorized the repurchase of up to $10 billion of common stock with no expiration date.<\/p>\n<\/div>\n<p><a href=\"https:\/\/www.americanbanker.com\/news\/truist-settles-15-year-old-legal-saga-causing-earnings-hit\" target=\"_blank\" rel=\"noopener\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key insight: Truist&#8217;s fourth-quarter earnings were hurt by $130 million in legal-related fees and $63 million in severance costs. What&#8217;s at stake: As part of the settlement agreement related to a court case involving overdraft fees, the bank has agreed to pay up to $240 million. Forward look: Truist Chief Financial Officer Mike Maguire said<\/p>\n","protected":false},"author":1,"featured_media":24821,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[218],"tags":[9401,8221,1095,927,638,6289,591,2876],"class_list":{"0":"post-24820","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-banking","8":"tag-15yearold","9":"tag-causing","10":"tag-earnings","11":"tag-hit","12":"tag-legal","13":"tag-saga","14":"tag-settles","15":"tag-truist"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/24820","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=24820"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/24820\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/24821"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24820"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24820"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24820"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}