SNV - Earnings call transcript Q4 2021 | Synovus Financial Corp.

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Operator

Good morning. And welcome to the Synovus Fourth Quarter 2021 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. the to turn of Evans, now Relations. Investor will call Cal over Head I ahead. go Please

Cal Evans

and you Thank morning. good

the of your the today’s Officer be During call, Relations Blair, within release He Chief the Financial Executive be we slides call. questions synovus.com. Officer, to end section President able Investor will and the and Chief of will followed will press are by and that Gregory, our at we Kevin website, the answer call. begin reference will available Jamie

We comments risks include statements assume any as in our to update in list results actual new obligation vary forward-looking because may subject Our cause statements. These do law. not materially or our which be our SEC We and results filings, press are otherwise, forward-looking statements any early are release information, materially. these to might developments differ available by the factors and that except required uncertainties, website. and to on could

we call, financial the performance. will non-GAAP the During to measures company’s related reference

You measures appendix And these presentation. our will in Kevin quarter. the may Blair, the to an now, reconciliation provide the overview see of of

Kevin Blair

I led know well lot running to I credit became table with moment Relations and joining in our Cal, everyone. transition move to career Cal and ground you, investor to who know morning, going Market analyst earnings the job is great years, after for and his shortly has role official company hit as interfacing development community, quarter’s role Director. Thank last want when market Cal’s our and new to and his Corporate our aspirations. and Treasury his team. a Intelligence will a shifted call. getting with done you Brown, IR but Senior past intelligence latest in you his call help fourth Cal. Kevin Kevin and the Thank expanded to two take officially working background. The good enjoy brings recognize given will a quarter Evans for and has our Cal with the Investor

the wrought our and the fourth point again for the I and XXXX, Now quarter with uncertainties, let’s was on communities of support placing commitment. were our thank team exclamation our your challenges difficult year. deliver dedication the able XXXX to shareholders. and our but shift into hard contribute an to teams environment work, clients, our want to navigate to for with overview

continued of accomplished you today, hear our pandemic impact the even our the company. As will clients operations we and as to of a lot

team meeting assignment Our from is challenge it to our when clients. anticipating capable the with and the unexpected opportunities understands and comes for and the

report an do more. purpose-driven inspired strong and doing their story enables areas to even absolute would we and is said quarter achieve for today a could Our people of fourth work and follow-through your is passions and in and you doing we testament do the what we potential. and full many of What execution talents year-end see to that will

objectives. Number business Synovus, to to provide three, advice, to experience to our four, solutions two, and talent of development and our leading better to it client wallet number enhance proactive of deeper all and informed client of a to XXXX, As our and growth to analytics one, across easier provide relationships, lines the core the with more we making of seamless business five, growth focused business, we even began order do regain five delivery on momentum, initiatives. share leverage to support in by attraction

was execution our largely business significant success driven by in have all our progress core objectives. five and We in these made of XXXX areas

year. Moving the to review slide three, let’s

income fee in of Our solid via succeeded growth. delivering loan, and performance deposit business core lines

growth half sublines funded with of our production with up first While saw across in client XX by all loan for XXXX community productivity wholesale broad-based and the primarily loan of gains wholesale significant XXXX, demand second driven our half, business double-digit was wholesale bank growth we in the versus the commercial commercial muted versus year. posting XX% loan XXXX, XXXX increased and teams. XX% was

be on accounts. pipelines growth banking expect XXXX augmentation, We as into core driven middle-market, operating restaurant our and well the XXXX by was given corporate continue growth focus continued to momentum an this bankers, that key activities as in incremental talent the and as and teams. investments investment the Deposit of our and well sales by balance ongoing as services, will provided

balances transaction past core the result, a XX% increased years. two in have As

from consecutive led progress to businesses. continue higher income at optimize this lower was during transaction banking the have including quarter various At and year. in net our equity to the of office XX% onboarding during to core as Forward our initiatives. grew allowed from by include Synovus an this of cost We wealth new remixing market, as Drivers well assets profile total growth the with make [ph], revenues X%, a goal period client strategically a new deposits % year-end cost, composition liquidity. family seventh fees. XX deposits year-end, wealth in In increases XXXX, excess core funding management of strong XX deposits non-interest fees lower clients overarching deposit we with gains, significant Ex increases growth This of under of TRAI were security versus of value XXXX.

investments savings but million area pace This remain to and and Forward allowed achieve overall of original which The we managing Forward $XXX run expenses. year, XXXX in strategic success reducing adjusted overall into the all make of rate million while flat on XXXX. expenses a lowering of As benefit, in headcount in Synovus spend, our being includes pre-tax us real achieved estate expenses, ahead Synovus every Forward to plan, resulted Synovus of versus impactful year-end, will projections. our we of committed transition $XXX our strategic Evidence reduction have target. third-party efforts and

digital enhanced functionality, platform. deposit including client have to commercial capabilities services, As part origination; solutions enhanced online is several of experience. overall a Accelerate leading and and our we investments account and suite; receivable our our and These integrated launched focus on better AR, banking new innovation, Gateway, digital

team, implemented also Florida warning and relationship regions. XX% middle-market that clients giving high on our another is insights in build talent smart We our solutions advisory risk analytics also by value. had our and our and specialty monitoring. which attrition better strong expand breaking services treasury the bankers year banking to experience record payments growing and our people, in and client those XXXX, almost have sales proactive grew to and who We expertise need, added and invested our West into early in tool growth Central commercial In to we particular,

with Member members benchmark of the team our recent Place designated existing we Survey development the of a indicated Great We relative also the the emphasize associated Place that pandemic, to were new by were tracks to Voice Team and XX% the senior emerging Work which financial challenges leadership the of two to of engaged, development our the actively launch services continue with leaders. for Institute. team quartile our is and members to Despite top Work Great

goals by efforts gender made in measured Ranks and in in XXXX. based our our the inclusion progress have also ethnicity short-term, Leadership meeting equity diversity, We and

amount a momentum of a overall, year, and and into So, one XXXX. rewarding productive that tremendous carries

quarter. highlights Now let the from fourth the me shift

origination of $XX existing It’s a billion combination of was is The $X.X this growth core quarter. a $X.X the or growth perform billion. asset on quality $XXX were from period metrics have Core the third which Diluted million underwriting AUM in annualized portfolio, income X% banking second transaction income sheet, have to on ratings interest the NSF growth. PPP. increase quarter, an with wealth The continue this the from income. basis, from $XX quarter, X%, a the earnings of balance the Net as excluding increased a continue continue and Net quarter million side versus credit deposit which and excluding point interest stable drivers and fees. earning points slide this strategic this as were the similar as XXXX. NIM as four income, from growth, of quarter. share start deposit million. reductions story of more to quarter’s billion due an from actually lower such with Approximately, with strong and our the augmentation management consecutive quarter a we increased the Let’s of returned by performance fee billion basis PPP lower the fairly growth. or losses an or basis and production per same offset earning XX% pleased net The represented new before balance XX% quarter the to expansion. From with adjusted fees and increased deposits. be the third per growth or account from consistent commercial as quarter non-interest-bearing This continues rates $X.X asset But to funded or $X.X through supported increase third to fourth the by adjusted to delivered fourth X in in loan quarter. loan resulted exceed The a XX% share on the totaled interest X record other $X.XX risk overall of came core generate during reversal growth income also levels income at in perspective, well of $X.XX our margin continues we and of measured is PPP card yields quarter, quarter. growth largely segments, PPP cash reduction pre-pandemic increase be $X.XX as fees we in than $X.XX declined management and

completed $XX repurchases. our quarter, plan the of with During share successfully fourth we capital million

year, middle common balanced $XXX key target quarter. on repurchases results share our detail client the loan represents operating range now For our and achieve for upcoming target dividend will ratio Jamie financial the we X.X% million which year-end, CETX share of initiatives the the to at and core growth, for year. greater the a in full of

Jamie Gregory

the Growth total an loans prior quarter, bolstered Dierdorff, balances growth we the the five. initiatives with X% and strong billion about the begin excited up $XX.X are Thank of by team you, We this Kevin. banking seen loan and from will of reduced of joined loans commercial quarter, November. the $X.X who disciplined year being $XX.X or while industry was by where production pay-offs also achieved assets by This and total lines, on are fourth potential businesses, were billion. I in growth. billion PPP increased key of approach adhering prudent strategic slide C&I and to was portfolio utilization. from to fundamentals In ended is XXX senior The CRE, being The approximately and and points management. driven XX%. momentum robust investment several evident as the our included led first margins, business classes We our in Tom positive footprint. and commercial in increased line such structured commercial veteran was clear accounts Benefits industry supported quarter housing, underwriting across our national broad-based also growth healthy team finance, standards we increased in banking. realized corporate growth and have excluding by in momentum the to inflection basis an towards which of evidence QX utilization, asset

today’s occur C&I We offset in time million, which other in quarter. and averages. economic exceed line than card $XX growth portfolio, A over by where for subsides. of the X.X% sheet as mixed the in commitments, consumer million remains on core our million being Within the well $XXX continued normalization particularly also growth in balances expansion, declines consumer mortgage. with should in liquidity to which $XXX more saw consumer us in somewhat In over core utilization balances, national aggregate, growth products or continued in would funded expected result continued trend declined is Southeast balance up positions

Looking portfolio by our outside modest down activities, lending of more in offset core did elevated our activity. in were decline see pay than a QX third-party we purchases as

balance of generally quarter, dragged These the million our to XX% XXXX. the quarter manage total quarter, year overall sheet means management and for the a capital full ended the so million, $XX and overall that assets. fourth efforts portfolio the securities will as as balance continue will at remained Slide sheet well our liquidity remain out deposit our leverage trends growth for positions. prior and to $XXX up highlights portfolios our at central the Additionally, to from six both as

the up very in As full growth XX% was can year. strategic continued strong up $X.X you deposits, the another by was declines account in balances, or we of seen for billion billion while see, or the deposits. quarter majority non-interest-bearing core and year have growth, for it fourth the which transaction Notably, X% led time in $X.X year for were the

NII late For the which seven $XXX from Program. to liquidity were continued QX, one net versus strong Both of to to for approximately experienced broker declines our interest million billion quarter manage points, quarter. fourth from $X related and normalize broker interest quarter, the prior or million expect fourth of points first Paycheck our ended the quarter. of $X.X down quarter basis deposits through from these excluding quarter also deposits position. the inflows basis we total was quarter the one reduce continued total decline significant Slide in balances. by experienced cost further asset decline the to In resulted as to growth decline seasonal of in Protection declines The fourth billion X public the balances while began efficiently and the we of margin income relatively we impact basis first which broker third further at XX third as point X.XX%, shows stable. a the larger funds, net as quarter The growth, the fourth earning year quarter. $XXX portfolios ago in we deposits expect and seasonal

As expected, impact NII Program of Protection serving the of headwind, excluding wind the the quarter. was PPP, margin in Paycheck as the is notable stable a down the

client in curve. stands rates To revenue the of end, in to of which was and NII saw portfolio up the loan note rate. in Our from across at quarter The includes sensitive the expected benefit not our sensitivity, portfolio our eight, portion continued that under This slide $X of large that non-interest increase strong million acquisition management, increase would increase growth. of I their highlighted yield the see immediate XXXX mortgage reduction inflows. remains X.X% XX%, prior income recorded helps at Adjusted $X is much of increases that production is driven third we that second million a from estimated growth in asset we is floating despite a $XXX half from recording variable rate and rates. quarter fee in a X% of that now one-time a stands seventh quarter. for support strong one-time of revenue on an BOLI asset million a by This Arranger to management Wealth consecutive million $X offsets another headwinds and in increase an assets perspective, markets quarter, continued fee the capital repeat. From was overcoming to income. to

notable performance-based and spend. $XX $X increases risk and fees, growth in entertainment established of totaled we $XX our increase Within consisted Other XX% the banking a recap and increased wealth and million fourth $XX This and in see the On basis X%, factors, growth swap additional outlook As normalization X.XX%, of the points There in dues quarter and we excluding investments the as loans spite and to declined from ACL million continue ratio on income XXXX PPP by we improvement of In the by growth. initiatives. X.XX%. this basis revenues. flat expense, donor classified quarter, quarters. increased our $X related the million reversal respectively. strength not groundwork of criticizing management by $XX authorization, tech spend. the efforts will On a X.X%. segment, should newly X momentum or expect The this $X Synovus customers. including of point both expense so, totaled a quarter real to expense total increase driven that our commercial excluding ended basis, increases slide Past XXXX. from Drivers These in Paycheck and we million partially XX travel continued key NPA XXXX, growth of year a bonuses, fourth management represents to have normalized of growth, will to operating to in XX% while ratio highlights continuing X.XX%. provision XX banking from full be and prior our insurance which segments X.XX%, to doing million in within core economic robust key XX other incremental headwinds million driven of comparison from item. adjusted quarter X.XX% health expenses, included Recurring areas of factors. management our The loans. year-over-year. seed to metrics at FDIC that to implementation cash salaries, XX%. and points into line positive an ratio driven increases related of loan expenses initiatives fund base basis elevated have commercial remaining with management The in expenses, we basis believe million million and lay CETX Forward declined manage including Arranger growth fees a Benefits was million executed year-over-year change points points fees, strategic their non-interest can significant increased up do declined nine year-over-year, able a spend core net recurring expense, fell we gains Synovus This categories. million, from reductions helped our mortgage drive revenue basis commercial gift pandemic-related slide security several were offset resulting NIR the by Slide Program adjusted The estate quarter. the despite particularly ratio were seen seasonal $XXX in advised of core included expense credit deposit $XX deep in Forward, future and relationships declined infrastructure, charge-off the is was XX with the expenses expense notable $X initiatives for Protection and through XX% future the X the in XXXX. and successful In dropped all improvement to to for XXXX credit further for excluding in ratio to loans capital third-party losses show leverage NPL X repeat of

X.X retired prior of end we For from the year. of approximately outstanding X% shares or common the year, million shares the the

management ongoing continued helped which and strong ratios, stable with well efforts maintain capital for positions PPNR have in sheet Our capital XXXX. along us core growth balance

XXXX, in our shareholders an the in the to shareholder For plan amount privatization be continues capital client returning an the a common capital dividend. would appropriate of growth, by $X.XX form of for in quarterly $X.XX, which payable first includes our That dividend to increase while April.

our XXXX target plan CETX our managing million supporting focused and the from priorities our capital growth the While repurchases, around in ratio level authorization are X.X%. includes also of share on core $XXX client the

our As capital shareholders our best Kevin stakeholders. the core detail for strong our this focus ahead, interest in it is also of includes a we on prioritizing position but turn believe I only communities of broader and maintaining to back growth set we not outlook. clients, greater look will and XXXX that our our

Kevin Blair

Thanks, Jamie.

portfolio revenue. rate be excludes adjusted $XXX the continued of hikes commercial revenue and stable of prepayment remaining X% strong outlook assuming PPP-related three in assumes and PPP of current some due X% growth largely income reduction to The the impact relatively mortgage FOMC industry-wide activity million XXXX. will secondary X% impact rate This lending, Overall aligns muted growth and utilization. production in of the fee X% expect to in line balances, particularly the with CRE we revenue. expectations loan in growth curtailment the of to Excluding

in banking continued expect fee wealth we However, categories strategic fees core including and growth management.

Benefits PPP, talent X% and of to the and leverage outlook technology. from incorporates levels, the and additional estimated operating strategic of terms increases that building Our Forward Ex expense future. significant and of the continue throughout Synovus branch adjusted year. year a in of managing remain to expense will expect investments positive the of will an out in we development locations, to while to is to continue agile XXXX, in bank closing with and generate of inflationary pre-pandemic XX% initiatives travel run includes compensation, X% our an in our by return business disciplined offset pressures, approximately $XX efficiency end. rate initiative savings underway increased million growth One is

core CETX new to ratio Moving than We for capital, arise. for M&A to objectives, will a adverse priority. we the in points, conditions significant a support while relationship extended terms continue to adequate of our if And whole range these by X.XX%. remains becoming quartile growth our a our more strategic top capital, upper earlier, growth range Jamie priority XXXX sustained basis deployment, they towards progress bank believe were while support XX maintaining continued top of shared is targeted as X.XX% to capital range of not expectations providing This protection against our performer.

performing We at and team have amount is our a the momentum high level. tremendous core very in a of businesses

appears Given it interest will heightened tailwind XXXX continue the a environment asset levels serve sensitivity. in of rate for position we as sheet balance inflation, the to as the

We also begin topline strategic drive year. growth that the believe investments to during will our

banking-as-a-service called talent seeing strong banking product progress and are build and of corporate our on investment build out pipelines are We out. BaaS the good making the for

reasons, poised Operator, all high on delivering is we my of team begin financial in to know ready Q&A. our win. are very XXXX and and business these ready For I objectives is to now and confidence our

Operator

question from go JPMorgan. Thank from Instructions] Our [Operator ahead. comes you. Please first Alexopoulos Steven

Steven Alexopoulos

Hi. Good morning, everyone.

Kevin Blair

Steve. morning, Good

Jamie Gregory

Good morning.

Steven Alexopoulos

more you through on or gains share the I the was tied give in -- the look chart. more it customers existing slide production getting XX% quarter? wanted you off when on increase, productive was at the five, so in increase color to charts Could coming is that this almost to start, active

Kevin Blair

look both production, sub-asset significant were to the we in And it look it’s bit of both led you to increase asset can at increase and classes when classes. eight it growth at so that CRE. XX%, look little able Steven, Yeah. when you a you in a the at

So and we so was Board. in warehouses. saw growth senior saw shopping, it in hospitality, housing the across growth the We really

new the in clients it existing from versus both. terms of book, came Now

So little we existing story Similar seen more from have our become from the you as NAICS there perspective, And well. growth NAICS of $XXX active cover to the if greater take other on look it than At we you same a that a at side, clients standpoint. C&I strong from codes time, see codes share that the continue competitors. we five grew would a demand million.

So very broad well existing the based, Line during about million in as again, new customers. $XXX quarter clients, C&I. increased as actually utilization

was about So points, percentage come obviously, from would existing that it and X have largely clients.

Steven Alexopoulos

color. XX% activity utilization for follow up, growth to line for the hold flat, so without XXXX see prepayment PPP, That’s are look to if we Okay. calling And I normalize. outlook in at about helpful you then loan but to

decline pre-payment me outlook levels the a going you onboarding help client are think for this, bit or to to So, this improved in understand is XXXX increased for new because XXXX? tied quite expectations

Kevin Blair

former. More the

into look levels team members we our our are will elevated to we some will forecast we add as incremental new our as and of So that already additional think onboard doing. production what out remain production pipelines, we

more much a production it’s of story. So

loan breaking mid-to-high can look start We next the you when grow we next down commercial the single-digit at year, think year. commercial sheet balance I side. just growth think

on of flat churn that’s some keeping consumer just core the are third-party there. bit the happening and consumer shrink portfolio the a based We portfolio may little

have pay-off about the -- have $X we nine billion the of quarters, We $X.X generally because seen pay-off we over last two the averaged So billion. activity, the about last activity. quarters mentioned

front was of continue especially lot on We $X.X decline. a elevated lower will We that it rates. cap by So to about think activity billion. the CRE saw the over year given

think mid-to-high around So the subside. growth will growth production. that But in the driver loan around commercial we loan bigger single-digit is

Steven Alexopoulos

Production.

more helpful. That’s one I could Okay. if Maybe, Kevin, in. really squeeze

a I So, you the in around XXXX, know terms of Investor Investor is what year corner. the accomplished company the the covered but and lot Day, Day actually, this

the of Thanks. on like, are us a XXXX give teaser initiatives a maybe about most bit the excited Just revenue side? Day, on perspective, Investor from a you for what revenue

Kevin Blair

look, But be lot putting a asset from how We mass. will NII. start Well, talked small business. a the are industry to standpoint, obviously, the sensitivity that position I revenue to around a I is we in initiatives, ourselves with changing, the especially drive think, about able

I platform. those software a very give finance combines that platform platform. think platform And a provide a providers us have going payments-as-a-service brandable software flexible, as with embedded banking-as-a-service a an haven’t we both they to to vendors, offering mass configurable, talked is that with the had

when look year. providing to able pilot I So at be timing start we second to opportunity the of to uniqueness it drive and what our tremendous in are we to a the quarter, next rollout think, has revenue

record those in the revenues Now, $XX comments will almost cover of able and initiatives, to million invest be that, Jamie year. during planning on even we revenue $XX that’s of to mentioned in that his are XXXX about million worth expense. we think We

paybacks, will XXXX. not through So looking the XXXX large for those are new of into continue to initiatives but build we benefit

and investment would I second, bank. mention corporate The is just our

talent. He has that already in with line building the us. and We have made Dierdorff is days up to short pipelines great starting just XX been progress Tom

We quarter many of second in year onboard this team individuals members revenue. and running expect start as provide to the as will to and XX also ground hit those the

Steven Alexopoulos

Okay. for questions. Thanks my Terrific. taking

Kevin Blair

you, Steven. Thank

Operator

go James. Rose Please from Our ahead. next Raymond question from comes Michael

Kevin Blair

morning, Michael. Good

Michael Rose

guys. Good are How Hey. morning, you?

Kevin Blair

Good morning. Well.

Michael Rose

Good.

hikes the So, here. some rate outlook obviously, includes

rates just we to the build assuming those the us wanted do portfolio, sense where comfort how the portfolio? size think level should get is get and with about further in Thanks. remind again securities we Just a that for of

Jamie Gregory

question. great Yeah. that’s Michael, a

XXXX, expect on the portfolio margin. do we look build forward or the we to into security As grow

see assets on we movements are prudent of up the reaction going XX% that be really in at balance all to the getting to sheet. we a are But We today other and and to XX%. it’s very could

strong are growth. client mentioned, loan forecasting Kevin we As

We expect continue. that to

portfolio. We growth base at to But in expect case our all allow to we but marginal considerations us expect the forecast look deposits, those do together. deposit of some continue play in of to the mix growth

Michael Rose

And towards factors and it’s Okay. range just lower which end that, so on versus That’s utilization assume to assumptions Can finer would is combination and you I then it? helpful. and like appreciate somewhat is Thanks. can drive us you pay-downs it, you loans, understandable. things the wide, appreciate end? help of point upper I’d a just what put pay-offs but back a if the

Kevin Blair

Michael, I think, you Yeah. nailed it.

we are economic constructive going chain know pandemic still be any -- it’s in feel wider. there very front into supply in we think environment. challenges a going are I influences the the confident the it XXXX and don’t the levels Obviously, to we to potentially and relates production very impact so assuming we other and range little of us of kept as a

were and commercial very of continue that the think also confident, we carry year we line. range represented year. as that and that at present assumed are But haven’t quarter same tell to first forecast. zero quarter we are the that’s momentum in lending in throughout the this tremendous that we significant some flex so we the liquidity being saw in would the you some it’s the in kept unknown there we a that think positioning parties I variables more there fourth some can this we and mentioned, in up just and But kept importantly, I third the we had over side, I the going we growth. challenges. things that And to And that we know if XXXX, see more that that conservative we have knowing --

Michael Rose

of investments going $XXX I active sense it? just that one given that obviously, authorization, this last really with If helpful. making, that, buyback to think to mentioned the squeeze some but year, about Very then, is way get And I right guys million don’t you you the are are the the could the be you Thanks.

Jamie Gregory

the think right That is it. about way to

I think how good in remains quarter plan as the a fourth really is deploy example if the to environment capital, expect we of we XXXX.

in an capital fourth to quarter. capital deployed the in look XX asset, you at and keeping the that’s If our net the accretion out basis core dividend, the generation exactly and of have points risk-weighted we client loan what you mid-XXs our generation, growth you

But rate. it, earnings capital to toggle then growth how share sheet. to CETX the our ratios the use through manage target. to a high back Now we deploy our on to we we clients is repurchases will the the that’s on look of And capital that’s context a will balance generate to end as pretty manage

Michael Rose

for Very my helpful. questions. Thanks taking

Jamie Gregory

Thank you.

Kevin Blair

Michael. you, Thank

Operator

Our Poonawala from next comes from question of America. Bank Ebrahim

Ebrahim Poonawala

Good morning.

Kevin Blair

morning. Good

Jamie Gregory

morning. Good

Ebrahim Poonawala

baked And also, balances. not your could in of if normalized? franchise and just it’s guess, growth could actually good you to utilization given what things if what I going it’s the just but, and Just in stronger world on Shouldn’t talk to are and given to terms the forecast, Florida? balances Atlanta reopening. maybe XXXX, us GDP in is maybe like where to to for number I loan net all it X% know risks. nominal X% you loans a be implies be into growth our be terms loan in loan upside exposure remind me have look us normalization will investments line things much but made, like a of

Kevin Blair

with forecast. increase talking about range, another that. start will that back the in I the if And with million our that we we into and that not mid-XX% in plus are $XXX quarter, fourth normalize things in outstandings including saw are slight we Ebrahim,

be your range terms increase, line again, X% to year, point think, X% our GDP assumptions. there would higher a your back obviously, what point, we So partnership decide our included into our to just the thought. and level GDP and at the to I produce than to continued upside additional we mentioned of, and think economy liquidity third-party forecasting in you the that I into capital is deploy we we growth, sold bankers have We for loans if went if stronger if there’s in than and in assuming next upside. to utilization that that, see could not X%

Florida, productivity our perform Atlanta So the there the are of bringing in corporate and have performing are level very well, well to And markets bankers. are in we talent right, real that driver very investment is you world. we on our and banking new continues

for so will loan built And the those that, that we the individuals faster growth faster talent onboard the budget and come. additional

folks. on on in those us those an are that have of hit there based forecast on we and all the outperform wanted for cylinders. and team we and based if see what the so there’s to the And We a we forecast lot economic But, front expectations members to see variables. obviously, of opportunity

Ebrahim Poonawala

revenue a on Thank what outperform, on are? I Kevin. you puts revenue that takes feel helpful, Give around Obviously, underperform unpack to can takes guidance and separate the us That’s adjusted just just of if and and sense adjusted And a you revenue going outlook. puts out the you. but question, Is guidance, the bank. fee the fee the investment that are building revenue.

Jamie Gregory

forward on as headwinds fee is, look the those are in still on we look there expect do at as mortgage, of quarters to down we revenue year-over-year. XXXX fee have And XXXX. revenue, for mortgage, you the you in into normalization that Ebrahim, reason be the strong Yeah. -- early

revenue well recur then not will had down. income, revenue we we as BOLI rates production to Higher be But expect in fee also XXXX. to are in XXXX So interest expecting in impact in as benefits that mortgage there. gains both equity

banking So those I broad-based item core broad-based deposit into NFF other mean, XXXX. to take we environmental outside I wouldn’t across charge, the expecting that the every to really forward from fees, are more -- I that line we look to away we in see want Board of fees, both outside the don’t service normalization. as but headwinds, growth expect mortgage those growth card and headwinds our the unique of XXXX are

Ebrahim Poonawala

but the the that investment build a just are sneak that And it. as of I that if now verticals out? certain up am ramp are saved out, you follow-up on one bank Investor in Day, any particularly can some just Got and give us I you hiring assuming this terms you for are in of that doing you sense there focused on of build right have

Kevin Blair

on things people as is, have Yeah. recruiting this such tech not we Ebrahim, and the media to of communications, do Tom financial time year, of initial in and to are come that, one institutions three grew. time healthcare verticals, that, we asked so, the the we And today. focusing are you know, to the

waiting institution. are year out for previous bonus their and their them from We finish their to payments receive

you I from join quarter, even second see maybe us the in would said, to timing folks as early third probably, a so, expect And quarter standpoint. XX

of And is, to to individuals your so, those the think, lot specific see we verticals. are teams fit fee what And industry point I looking you a on coverage beginning income, banking. for are of going to in

opportunity So you outstanding. see finance, offload going capabilities syndicated those some lending traditional our are with to of to the

depository to the going business are treasury see first. and You

to like on continue increased need will markets originally, capital clients out of coverage we things are some just those market solutions banking guys that would it time, the may over But side. build securitizations. to focus Now, debt and be an capital so size It these the going be capability.

more to it will on see will see what begin with. you the than NII So you income side the on fee side

Ebrahim Poonawala

I that baked your that And of it. assume this provided? you Got is into year guide some for expense the hiring

Kevin Blair

always. It

all building it as I includes includes mass, in but Florida. $XX mentioned includes included in middle-market out that so, And also CIB, have about we it earlier, XXXX guidance expense of teams investments like million for and the our our things

would So, be those of our inclusive investments. we of all you that guidance provided

$XX $XX much million that we could next of as As million think generate as year. revenue mentioned earlier, I

we you those quick can make a see fairly So payback investments. when period it’s

Ebrahim Poonawala

you. Thank helpful. That’s

Operator

The Please go next question from comes from ahead. Sandler. Piper Brad Milsaps

Brad Milsaps

morning. Good Hey.

Kevin Blair

Brad. Good morning,

Brad Milsaps

was what Thanks know if was how just of of what you interest And you more much would points revenue asset I sensitive terms around you Jamie, the basis just a you percentage rates in apart, to just for kind taking that on maybe my be in rate questions. you maybe feel XXXX impacting rates? you have have if are NIM? define I of increase your table in I that in could rate in could maybe offer related curious color would the know little deck. I how curious there, but on then like give three maybe a guidance But each are, of percentage basis,

Jamie Gregory

Yeah.

the first floating loans, rate look So, at sheet look you can loans over and core balance that can off, at increasing as our you time. of see you to ratio total

outlook memorization increase decline. the relative to exposure and pleased that we So our long-term rate. with will as Further, premium is define sensitivity for and are -- rates native curve the exposure asset increased our interest given increase

our So magnitude likely curve our velocity embedded the you the earnings deck, that interest that’s rates metrics relatively short -- and in year-end is the these see between exposure of a that moves the assume But that relative are depending estimate we the what you cycle of will our as the that’s through But was and of have and are as longer in and of when as stages fed we NII of it’s happening the we seeing. in beta end the increases believe term the tables. our on sensitivity tightening beta rate balanced a XX lower and cycle. deposit initial that’s long

and back we of were revenue so example, as total and first thereafter. to around that your our constant move question April, expectations would curve expand And points August, beta, in end consistent are And X% guidance of rate with the growth, rate use front sensitivity you approximately to XX isolate the our impact and moves to X% the hold curve what as for the have X basis December. X of and guidance, if to revenue our for to that’s end basis the the margin far points

for than is of that and revenue. So, you think April obviously, impact about December impact August total does much this partial but can and of year year, not an have the of X% less

Brad Milsaps

you. of year. credit the charge-offs XX you for of guys Thank Great. as then, follow-up, just basis my just side the points And on equation, were around the

any points. you I in of well Any your that would to with like comments take mean that way pretty your in around just XX the XXXX? looks helpful And down basis XX the you about it be in have that’s change well. points most but exhausted ability line to are kind thinking think as basis of reserve, I

Kevin Blair

outlook our -- medium-term charge-offs. No for outlook changes in

decline regards is You to area calculations. right good a look CECL the to one to loan still ratio our as approximately low the XXXX. allowance see the to forward and of to we estimates the ACL to the life in uncertainty are outlook, economic baseline then outlook continues levels. XXs in to loan the we With our expect improve If declines in do day

loan it that believe years are of couple an X.XX%. we back medium-term. a one bit was levels for that us do today different the makes For than little day Obviously, outlook it was But appropriate ago. a

Brad Milsaps

Great. Thank you.

Jamie Gregory

you. Thank

Operator

Securities. comes from Jennifer question go ahead. Please Truist from Demba next The

Jennifer Demba

Thanks. to Back topic… Good morning. the

Kevin Blair

morning. Good

Jennifer Demba

Back to kind you loan much Kevin, size the the over you of Synovus income opportunity years? of represent for Can us? how think topic can CIB, few growth the this next and fee

Kevin Blair

timeframes to we said and bring of loans. is on targeting we as an overall on these of balance all we them just are But Yeah. earlier, it’s I bankers. a story we based start-off as nature fact coverage and going the we a the contribute time, upwards I in our to can NII less will and impact see the XX% in over it’s the But number within continue fee we add be billion onboard. of of able being a we of of to But from what relatively But capabilities of the this total there income that teams can we standpoint. standpoint, size size treasury that, our mentioned more a be to just the able at from But standpoint, on that income without predicated sheet, you meaningful fee it’s loans be recruit will can will the such to haven’t knowing timing established. provide because generated business that’s shared that, that be balance commitment point, think sheet. the based to of a Yeah. of that teams a their that there. we tough be But to think, from have the obviously three is Jennifer, have $X going this than years first the this size

Jennifer Demba

we you the now? wage effort -- inflation recruiting much landscape finding so seeing in right are are How for this in given environment this today’s

Kevin Blair

Just in Jennifer? CIB,

Jennifer Demba

want Yeah. And otherwise if you cover to that?

Kevin Blair

meet work have And Well, platform Yeah. -- for you to that to has Investor a platform to chance that recruit he’s size offer Dierdorff number we reasons you get this, a and so a attraction bankers in and that our at. think, the have want really going Day to allows provides of capabilities a of Yeah. one, offer that that bank to bankers those functionality him, way the in is clients. I come Tom an is to one able the here the you being have, to you was serve which environment which up to came like come our be look, at and environment but in will their of

and is inflation. our is But we platform our as very And side. from look and the investment attractive so obviously thing. expense those important I you will hear changing landscape guidance, corporate to at we bankers most important Two, that’s salary that banking especially a from don’t around salary us recognize the think

for has -- and Tom, like lastly, like work individuals tell are the as their are that these great attract of folks provide that they because speak individuals want that, well-respected they they success you we that I and to in would who allows for plan be to have We paid track incentive folks attract leaders here. that and then, we building that then is an have to And industry, people that success that him. a people, know -- Tom come the record will

from talent comp So you packages around you right you have them and you industry. can have platform, leaders, right top right give the the the attract the

Jennifer Demba

much. so Thanks

Operator

from next question ahead. from Stephens, The Inc. Brody go Please comes Preston

Brody Preston

everyone. morning, Good Hey.

Kevin Blair

Brody. morning, Good

Brody Preston

Hey.

on I fee comment, wanted follow-up income So to Jamie. the

be one-time we BOLI. have this that quarter. it all $XXX this guess But in I million like if expect guys I and you gains some said you core of strip year as and some out, down securities, know I You that fee income to includes

million at a the year is to imply struggling side, because just the kind But, pipeline $XXX the house, given it why on guess, from given tail maybe the rate for that’s longer am run all would are expecting of what have I mass, basis. so, I source. setting the I you investments you core side made down would of next income guide be that fee revenue on because for a on that that And here, revenue the see least on CIB know

should greater so, a some aside helpful? setting one-time And there, be item just maybe clarity of kind

Jamie Gregory

it’s little And Yeah. Good that growth the I wealth growth into rate. -- to if sustained mean, at a a management bit. mean, look I you dive question. in we fees, still

the our we And those mean, XXXX really broad-based If had those continue to though, core million see to are digits that high-single so fees, we change XXXX, year-over-year you we of have I $XX strong a look really banking the BOLI the you significant. in and feel sustained about even approximately are do And this a increasing fairly continue. headwinds, good expecting at expect banking core growth income. fees in growth in rate businesses.

you you little headwinds percentage less of are are do headwinds have -- a of gains are And have million with on terms, what they and doing. mortgage. and have these comparing nothing then You to our core when you large they year-over-year. in equity normalization have on than performance $XX we business investments But are when

that delayed than that a mass, XXXX believe we when will like just just business, to so mentioned, revenue in little believe benefit. growth. be all a coming about Kevin to fee think NII tailwinds and as like initiatives we And be you that in that’s year we likely having CIB those But believe initiatives the full

are have that with Day. the when more that’s this fee have of longer believe augment going speak platform in and impact then proven these term to will BOLI. mortgage initiatives. investments other a a we we one-offs But XXXX, statement and couple growth equity weeks so, of strategic sustainable have And normalization we we that in these strong headwind we have to Investor we revenue Unfortunately, to that and in actually financial

deeper of full kind little story. a that’s into So the dive

Brody Preston

Okay. on expense just the Got it. front. then And maybe

you items, got I the million set that strip about all out if including core I $XXX all the have up, so. or one-time running So, donation expenses

the I and guess, the beyond that is accurate you slide implies of the level fourth this quarter that quarter branch midpoint results, at noted And would guidance. of of looking average expect the guidance from so, looking just rest flattish throughout that, be at that? expenses it you kind fourth to anything closures are an driving and Is earlier, year, there Kevin, assessment, the taken on the

Jamie Gregory

the Yeah. you is, we define That’s as to $X roll at expect $X seasonal third normal in then quarter see our presentation, expenses, quarter you the you and employment that mid-XXXs. way get recurring the look what to a you and forward add first add fair million expenses, And that on. another to if from the should assumption and the million is approximately what in

spend And you all employment into that would beyond in quarter, growth mentioned, the increases, included gets $XX so normal Kevin But merit to low I start that -- believe et these million approximately to cetera. your see that’s as inflationary is when point, expense, also, that on the And pressures you the from come XXXs. first that just to we initiatives. guidance,

rolling So year. is, of spend, the what see growth forward expense from there this initiative you in personnel end normal increases

Kevin Blair

that the savings appendix slide there the in we in we just referenced on branch. see would million will come $XX throughout can you the have I from And add, Forward million Brody, to have $XX $XX standpoint, We that of Synovus million year. another the

But mentioned, add spend We to have going to and monitoring the expenses up be year. smaller be other number. are the as as third-party that very items throughout it to relates savings to Jamie that clear, we

go to think and I have our being year a proven we expenses flat. was able through year have this

when inflation period, in time you of year I next some banking. highest seen that’s and the this seen have a two-year my over our so for And that take guidance year in

two able be X% range. over into that will growth to growth We to that expense keep our total X% years

levers will the continue to to So have pull. we pull we

I initiatives some we reductions. on that’s executed think, $XX the already We in million delivered have been in expense very, of have forthright that

X% is Our down year-over-year. headcount

And to that at us so we bottomline generate some a that know that new and can from, these look either have initiative we initiatives into the allows we invest or established. environment have to the drop more we of every dollar in efficiency strategic it

Brody Preston

in, rate? for of can know portfolio quick securities if the And could on me you the floating you to that. portfolio? the I duration then, effect And securities percent is do what one you sneak happen remind of Thank what a it. just Got

Jamie Gregory

portfolio of -- back the duration years, of you. to will four X.X rate floating but The securities just that’s don’t have under percent get years. we The is hand, the top I approximately

Brody Preston

All right. much. Thank you very

Operator

ahead. Wells from Jared from Fargo comes Shaw question Securities. go Please next Our

Jared Shaw

Hey. Good morning.

Kevin Blair

morning. Good

Jamie Gregory

Good morning.

Jared Shaw

view following do optional areas growth liquidity in on those loan up deployment of into some talked your Just that growth, funding how on you deposit for well you the expectation really like, expect, anything cash for more be than that as of targets, categories? the what’s terms upon looking at And else? more going third-party is the to those dependent originators, as about,

Jamie Gregory

Yeah.

As we are a growth, very look loan in funding at liquidity the strong position. we

XXXX, And to do the be a and asset expect about growth that growth that the opportunity so, even we that we growth believe we growth in how securities there deposit tailwind we will are our XXXX. deposit improve thinking continues outlook still in this with mix. to including have But

in from And deposits, with is, net mix. reduction manage see growth continued reduction us deposits so, we time you a in deposit expect should transaction broker being to what continued core as that

third-party for funding that’s have do the investment for that the our With believe we as loans we will that regards surrogate as so, the outlook do to deploy into assets to to growth. loan view and a flexibility portfolio the that plenty of third-party we And appropriate. look and portfolio, we

is fact fourth but I strong in third loan growth, feel down was the mean, assets portfolio that the that in see such priority. the invest and compelled portfolio didn’t which our had largely that’s quarter-on-quarter, quarter, client chase when we can we to to that You in quarter due

Jared Shaw

savings that’s or optimization, throughout equally really year the end more Thanks. Okay. expect spread from the coming on branch And the that back expense then we should just loaded? that is

Jamie Gregory

the We evenly right. spread That’s throughout year.

Jared Shaw

you. Thank Great.

Operator

Fitzsimmons ahead. D.A. from Davidson. go Kevin from comes question next The Please

Kevin Fitzsimmons

Good Hey. morning, everyone.

Kevin Blair

Good morning, Kevin.

Jamie Gregory

morning. Good

Kevin Fitzsimmons

CIB about, But am know of bolting more and the on this other the you comment I this been looking, maybe opportunity finished next focus and investments say, Most that’s Forward that’s the think thinking finalizing getting really prospect and in for appreciate Carolina, your when but these one I thing all, you Synovus when about from it’s on asked, have questions not you when Kevin, really I just the not of year. for North year focus certain and or savings but maybe that’s about markets, my about M&A, franchise, curious is an -- areas. year, a

are teams in Carolina North to certain be to lift-outs seem attractive they If you for of to item. perspective, in that add a of markets of the that maybe at from do But maybe it investments the for you opportunity for metro a markets investing don’t on go all M&A, avoid to it banking in wondering or Thanks. long-term about how spoken prospect? this really more do think you is is those the or but into beyond look you XXXX radar want of just would is XXXX, very like or

Kevin Blair

that, that market. new a Carolina I generalist value think able been you technically brand they hires versus type we Because believe the with we it’s be banker we have of a a We do a Yeah. portfolio. build strong to where question, meaningful loan geography, industry a belief so and limited make. our that LPO have I of vertical a have think is orientation, that, constraining it’s not because industry verticals go a go our a of in marketplace this Kevin, production can out specialty those some are there’s actually lot not to think generating generate office don’t have national that great expand of in through a portfolio as this I be and I and it’s opportunities but talent. with in by transform specialty today, I their My small Charlotte back to individuals difficult North in would into that, expertise rather growth in very some

So, although, low five serve. it tremendous would be we to and continue state to would a I that never, say I in foremost, my never the footprint have think opportunity, first priorities, on we invest

our are that We great other up talent markets. continue in growth to able institutions existing from to creating pick be

two space hires have middle-market in great We Florida. recently announced in the

to inside footprint. going are our we focus So

to to and industry road around never top verticals skill a continue down specialty add some set then, just the going but the are say not never We it’s priority.

Kevin Fitzsimmons

Thanks Got much, Great. very guys. it.

Kevin Blair

you. Thank

Operator

Janney ahead. from comes Instructions] Marinac [Operator Please Montgomery go Christopher next Scott. question Our from

Christopher Marinac

pipeline …all growth office mentioned this you family information wealth the morning. in Kevin, just in to the the ask XXXX. space, the want about management

kind for the curious Just what the looks of pipeline quarters? like next several

Kevin Blair

phenomenal there, mean, I growth Yeah. Chris.

So when you portfolio billion. office look family asset an at the XX of -- about our management has $XX Synovus under

are asset of I not year function had in we a have that go past provides just awards So of proposition to team, indicative we -- this -- I it is market. is is a into generational And but managers. they type that in and unique. that value it lot for their being a They they is of being business families unique out think of service. offering and our think won skill there full These have way the recognized are set execution these the goes which also for a that

think I grow. that see to continue you business So will

being out the track Katherine she’s able years size on to several on double plan well there, set deliver leader and to her that. in business of ago maybe a Our

provide something that under growth side. she So it assets confident on to the we fee also will on that continue are the management only side, grow but continue that business will and be not to will

Christopher Marinac

business. exists do is Great. guess what Kevin, curious digitizing has something follow-up the new or that’s just in I Forward I with already quick brand is product it thanks really for Synovus receivable offering? am to a that. that And my

Kevin Blair

Hey. I missed the first part, Chris.

Christopher Marinac

For the -- new receiver business… receivable for the

Kevin Blair

Oh!

Christopher Marinac

we know I to into are couple in weeks. of detail a … going get

Kevin Blair

Yeah.

Christopher Marinac

But that or that’s exists already digitizing brand just curious something if it new? is

Kevin Blair

new. right. That’s It’s No. brand

So, for clients a better receivable we manage products suite we providing to what of is would -- our process. their are

quicker to that our who’s clerk general. the we payments. a provide needing clerks in not invoices and behind with intelligence so that product it you makes scene, and today matching that artificial provides happen allows obviously it more efficient process imagine And do a clients process So, have that much the to makes

part pipeline latter with today. functionality a to platforms. strong out the accounts selling will that So the built product will of for side a really exciting commercial half is are XXXX The will payments in that we similar similar roll a we payable clients really it our we product that out provide have and for

Christopher Marinac

Great.

right? So, going fees addition to lead business, load as that’s additional gets over of executed, time, additional to this in

Kevin Blair

Absolutely.

think I revenue. our last said we in Accelerated the around right was $X AR million pipeline with quarter product

to in, to will now great the continue new also team this also time, have those treasury adding a lot businesses add going will going job to wallet fuel these new over her Katherine play but are she’s grow of that’s that solutions revenue growth We getting a starting our treasury. a where forward. and and that Weislogel so, point, To sandbox what’s new of deepening with done to she’s within share expand line. to And

So it’s industries, and segments and three-legged existing and new products. the the through into really expand book, stool, cross-sell three, bring solutions new on

Christopher Marinac

Kevin. the Great. background, Appreciate Thanks it. for

Kevin Blair

Great.

Operator

concludes This session. our turn Blair remarks. question-and-answer like Thank I Kevin you. Mr. closing conference to any back over would to the for

Kevin Blair

our be and to this your this of I out high bank to build are shared the continued I team transformation of an you, for thank team. today. will that and strategic the thank thank Well, all lead everyone want of and questions I who recently to call on four members our passionate pillars exciting really performing of it’s and interest future. an honor your time extremely also part in Synovus. our It’s company

I drive businesses, gains well-balanced think and to core productivity while sources to and and continuing our this businesses new roadmap is between in extending share revenue. in generate of folding market solutions new

our to areas to reposition new Execution and and in approach we growth. and going for client our we invest in streamline, our enhance outsized these banking, generate high-tech, advantage, businesses experience a it’s also will continue talent. to leverage simplify will to team continue high-touch As

our space, crypto good also announced have have we Xth continued USDF and taken to media banks how doing expert to sustainable are some the in us. of where deliver we growth XXXX along our purpose. fintech join received other we We the February fund. more that FINTOP JAM Day and will fuel our have few we talent, hope, Head joined to steps earlier, work allow the with mentioned Investor as we But forward new Analytics past and and over some Consortium on hear coverage meaningful Jamie onboard also us the as you about the us on this investment an for work will joined weeks We

also an that our some also share have at and and targets many this from team to we our strategies collectively of financial hear we opportunity effort coordinated event. are on how on of will have executive our long-term how leadership we You executing

for your as you interest we today’s today. in conclude Operator, will again, close So, call. Synovus, that, and thank joining for we with Thanks

Operator

for Thank concluded. today’s attending now The presentation. conference has you

now disconnect. may You

Synovus Financial (SNV) 20 Jan 222021 Q4 Earnings call transcript