How Mike Lyons, Truist’s new CEO, is plotting a turnaround

• Key insight: Mike Lyons, who took the reins as Truist’s CEO last month, announced several changes Friday that he believes will better position the bank for success.
• What’s at stake: The long-struggling superregional bank will need to move relatively quickly to satisfy shareholders, who have been waiting for years for the underperforming bank to deliver on the promises it made seven years ago.

The new chief executive officer of Truist Financial shared his vision Friday for what he believes the underachieving superregional bank can become, and outlined the initial steps it’s taking as part of that evolution.

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In his first public remarks since joining Truist just over six weeks ago, CEO Mike Lyons told investors that Truist has “all of the raw materials to become one of the country’s top-performing banks.” Reaching that goal, he said, is the $554 billion-asset bank’s “overwhelming No. 1 objective.”

Lyons also acknowledged Truist’s bumpy history, saying that while it has “an exceptionally strong foundation,” the Charlotte, North Carolina-based company hasn’t lived up to its potential since being formed seven years ago through a much-criticized merger of equals.

Now it’s time for change, starting with new leadership in consumer banking and a reallocation of resources away from underperforming businesses and into those with higher returns, Lyons said. The bank reaffirmed its expectation that it will achieve a key profitability target next year — a 15% return on tangible common equity — and said it’s still committed to 16%-18% over the long term.

“While I believe that history and context are important, and we have learned from it, we are where we are today, and we know we can perform better,” Lyons said on the bank’s third-quarter earnings call. “We’re now squarely focused on the future and are fortunate to move forward with some tremendous assets. Importantly, we do not need to reinvent Truist to win from here.”

Analysts who cover Truist were quick to point out a change in tone with Lyons in the CEO job.

“Strategically speaking, I absolutely love the contrast in tone at the top,” Mike Mayo, an analyst at Wells Fargo Securities, told American Banker. “This is clearly a much more shareholder-oriented CEO,” whose earliest message centered on simplifying, executing and growing to create shareholder value, he said.

Still, Lyons and his management team are in a difficult spot, at least in the near term, Mayo said.

“Financially, progress is going to be a slog,” Mayo predicted. “They’ve not been in growth mode, and now they’re in shrinking mode. So I do think there will be some earnings headwinds.”

Changes afoot

On Friday, the bank said it hired two experienced executives to oversee consumer banking and small business banking, a move designed to increase accountability in each of those segments, and that the previous head of consumer and small-business banking is leaving the company.

It also said it will sell nearly all of the assets of LightStream, the unsecured lending platform it acquired in 2012, to Carlyle Group, marking the bank’s latest shift away from non-core lending.

The LightStream deal, which includes $7.7 billion of non-core loans, is expected to close by year-end. It will generate $7.2 billion of net proceeds, which Truist plans to use to repay wholesale borrowings.

Lyons, the former president of PNC Financial Services Group and former CEO of Fiserv, will have to move with urgency to keep shareholders satisfied.

Though he will be granted a window of time to begin shaping Truist into the bank he wants to create, shareholders will be eager to see progress and, in turn, higher returns, said Scott Siefers, an analyst at TD Cowen.

“Virtually everyone I know thinks extraordinarily highly of Mike and what he’ll be able to do, but while Mike is new, the story of Truist is not,” Siefers told American Banker. “There’s a sense that people have been waiting for Truist to reach top speed for a while, and investors probably have some concern that this story will have to take another step back before it can step forward.”

Truist is in the midst of a detailed strategic review of each of its businesses, including its lending portfolios, to determine what will help it become a top-performing bank and what’s holding it back, Lyons said. The results of that review are expected to be unveiled in early 2027.

So far, the findings are mixed, according to Lyons. The branch network is strong, and there are several high-quality businesses, such as corporate lending, commercial real estate and wealth management, he said. At the same time, “we found capital spread to a lot of areas,” including in areas that don’t support the bank’s core strategy, Lyons said.

“We have a clear lens … Is it strategic? [Are there] clear financial returns? Or does it … do something to protect the bank?” he said. “If it doesn’t, we’re moving it out.”

The bank has already taken certain actions to exit national businesses, as it attempts to focus on its core Southeastern market. In September, it said it would sell $5.5 billion of auto loans, clearing out most of the assets of its auto-lending subsidiary, Regional Acceptance Corp.

In July, prior to Lyons’ arrival and soon after setting higher profitability targets, the bank said it stopped originating loans for marine and recreational vehicles. The shift was an effort to drive higher returns, improve efficiency and direct capital to the highest-generating areas of the bank, Bill Rogers, Truist’s immediate past CEO, said at the time.

As part of the leadership changes announced Friday, Truist said that Dontá Wilson, who has been Truist’s chief consumer and small business banking officer for the past three years, will leave the bank at the end of the year. Wilson, a member of the bank’s executive management team, was an executive at BB&T prior to the merger with SunTrust Banks, which created Truist.

In a LinkedIn post Friday, Wilson said he has “deep optimism for Truist’s future and great pride” in the bank. He said Truist’s employees and clients “are in great hands.”

Meanwhile, D. Steve Boland, the former chief administrative officer at Bank of America, is joining Truist as vice chair. Boland, who retired from BofA last year, was BofA’s president of retail banking before he was promoted to chief administrative officer.

Boland is set to join Truist on Dec. 1, a Truist spokesperson said Friday in an email.

Shimna Sameer, another longtime BofA executive, will become Truist’s chief consumer banking officer. Sameer, who was hired earlier this year to lead Truist’s wealth management business, will instead lead the bank’s efforts to grow core deposits, deepen primary banking relationships and improve the client experience. She will start on Oct. 19, the Truist spokesperson said.

In addition, Jeff Warner is coming on board later this month to serve as chief small business banking officer. Warner was named head of small business at Pittsburgh-based PNC in December 2024, according to his LinkedIn profile. His 17-year tenure at PNC overlapped with Lyons’ time there.

Boland, Sameer and Warner will report directly to Lyons, the bank said.

Rogers is still with the bank, serving as executive chair of the board. He plans to fully retire from Truist in April 2027.

Third-quarter results

Truist’s third-quarter results, which were released Friday, were mostly overshadowed by Lyons’ first comments as CEO. For the period ending Sept. 30, the bank reported net income of $799 million, a sharp year-over-year decline stemming from a $1.4 billion pre-tax loss on the sale of available-for-sale securities and impacts related to the sale of the auto-lending portfolio.

Excluding those items, net income was $1.4 billion for the quarter, the bank said.

Earnings per share were 56 cents, missing the $1.21 consensus estimate of analysts who were polled by S&P Capital IQ. Total revenue was nearly $3.8 billion, down from about $5.2 billion in the year-ago quarter, while noninterest expenses rose slightly to $3.1 billion as of Sept. 30.

The bank’s net interest income rose 0.7% year over year, mostly driven by fixed-asset and liability repricing, higher client deposit balances and higher loan balances, Truist said.

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Noninterest income dropped 95% compared with the year-ago period, reflecting the $1.4 billion securities loss as well as a decline in mortgage banking fees and “other income,” the bank said.

The bank’s return on tangible common equity was 7.2% for the quarter, or 14.6% on an adjusted basis.

What Lyons does next, and how he decides to mold Truist, will be critical, Mayo said. It will be a multiyear transformation, Mayo predicted.

“Defining who they don’t want to be is sometimes as important as defining what they do want to be,” he said.