SNV - Earnings call 4 2023 | Synovus Financial Corp.

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Operator

Good morning, and welcome to the Synovus Fourth Quarter 2023 Earnings Call. [Operator Instructions]

Please note, this event is being recorded. And I will now turn the call over to Jennifer Demba, Director of Investor Relations. Please go ahead.

Jennifer Demba

morning. good and you, Thank

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

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

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

the see measures to presentation. reconciliation these may You appendix in our the of

And provide of quarter. an will now, the overview Kevin Blair

Kevin Blair

Entering to Jennifer. our base as gains was and our goal financial productivity was allowing in you, execution. grow That Thank our objective primary focused rooted businesses, core performance. within deepen delivering XXXX, relationships, us corporate summarized enhance client

profitability. in continuing accelerate talent markets growth businesses key the presence adding to secondarily, and and and And expand contributions new generated our initiatives through to our

and acted more risk to position mitigate bank and in and In in of challenges, our book consistent on progress our tangible a and the which steady plan, unforeseen order earnings growth presented on we and our decisively time. foundation liquidity environment. growth executing for made Synovus the We economic healthy better built to team challenging midst over value were these deliver quickly with areas, led solid to and and

with in and market, lines, more produced in challenging investment healthy we business consistent middle loan Banking, commercial and prudently funding and team product specialty last which over outstanding through loans and continues lending. on our specialty a including expansion core year. sales PPNR execute, Corporate in banking in middle and officially key grow to activities, positive corporate Investment $XXX of Also, accelerating our growth mid-XXXX generation launched was the Despite and million environment, laser-focused became businesses. and was

increase a XX% in in total production As XXXX. we delivered result, deposit an

& by and We full Markets augmented strong Treasury continue in adjusted income an as analytics delivered we and Management fee to further growth new focus Payment solutions, in intense on Capital supported contributions, double-digit their 'XX Wealth Also, teams building Solutions, our expand relationships. rationalization expense noninterest GreenSky. continuing sheet make with and our and quartile with We balance relationship top will areas in drive long-term investments the an that management efficiency diversified shareholder value. maintained to disciplined light expanded through cost stream revenue while proactive

asset and continue we asset the credit to manageable systemic and experience front, very of quality our across see On no classes deterioration footprint. levels losses

loans deposit solid was and reduction commercial higher and a office sheet the Finally, estate in wholesale balance of from real core strengthened cost funding. XXXX growth

lines. investment We was mix to management the Moreover, of GLOBALT, our streamlined optimization. with reallocate Tier solid sale also and higher our asset over enables into balance sheet returning accretion Equity ratio which through Common earnings business to X us increased the prudent XX% firm, business

of an adjusted per $X.XX, Synovus full and fourth and highlights. of overview Now financial and of $X.XX. quarter year diluted earnings quarter to per the Slides X share earnings let's XXXX XXXX fourth for share move reported X

For in share XXXX, reported $X.XX we per in $X.XX and diluted EPS. earnings adjusted

adjusted share by excluding fourth have EPS and been EPS earnings reduced quarter per fourth assessment $X.XX the FDIC $X.XX. reported adjusted and been reported special FDIC million $XX the Therefore, would would assessment, $X.XX. have However, quarter

and special were Higher assessment, was industry FDIC year. deposits, net XXXX. expense and excluding able increased adjusted noninterest and preprovision for grow to the But environment, the revenue last revenue about challenges Even challenging funding disciplined core banking Synovus X% core loan headwinds in costs losses maintain this in control. the with

for Net or margin an interest income roughly grew point $XX the despite contraction. basis million XX year X%,

billion CIB strategic period-end sales in middle C&I X%, lending. Excluding including loan of loans about lines, $X.X increased XXXX, specialty by business market, led and

an on originations. CRE activity, returns more on stronger increased growth of margin profile committed utilization and lending, continues experienced relationship to the muted pleased Despite facilities. we and previously by relationship-based and XXXX the year-over-year increased deposit profitability be driven There increased construction are with also emphasis

funding core the XXXX. total side, in XX% declined borrowings total and On deposits X%, increased

better fourth quarter a and than Our as interest-bearing our modestly deposit lower-than-expected margin quarter-over-quarter result stable X.XX% prior guidance of of costs. was net core interest

supported net income. due policy point interest fixed inflection positive reductions were Payment as throughout well Also, to reduce be rate margin monetary as tailwind adjusted & relatively quarter. provide a noninterest Market from in in increased Capital in funding a support checking broker multiyear fees, coupled progress XX% NIM borrowings headwinds Wealth asset Solutions reached fees continued XXXX the stable increases stable to for first soft deposit we Treasury GreenSky our success that environment a income. with Despite by Management production has and and confident in in able mortgage and more and higher and revenue environment, program as higher continued cost activities. the deposits net We remain our should the XXXX, we interest should FHLB intentional A fees, of repricing fees

Noninterest expense well contained. remains

a and uncertain in this quality asset rationalization position In cost environment, XXXX. placed start remains Synovus as have we healthy. proactive strong management Our initiatives

sales, in full were a the manageable basis fourth basis and points loan points charge-offs quarter XX net year. our XX Excluding the for

slower allowance we over and credit the the built pace Nonperforming assets at losses. X last increased a further for months

up economic a year environment. a And XX% maintaining and profile from our targeted uncertain capital to strong XX.XX%, Finally, XX.X%. with to remain more we we the ending of continue X.XX% we a position focus as in navigate our our the capital position CETX within ago, levels on quarter at confident well capital through

the consistent make continue We including Treasury optimizing CIB, growth several Management. and banking, and key core with where mix have we expansion, our business & commercial Markets, growth Wealth in Service These will Solutions, Payment middle future. right into Banking through progress a diversifying and are businesses execution as market, areas, to revenue the Capital in and shown win, deliver the solid to well

what Our differentiates Synovus. talent is truly

objectives three, enhancing team Our one, relationships; prudently the and winning XXXX are, full key the profits. for two, in bank; growing

even soundness profile. I these of great our but and delivering to to committed preserving to improving confidence are safety elements We meet on objectives key our outpace only ability competition. have goals, in also our our and while not

it to results the Now over quarterly I'll greater Jamie cover detail. in to turn

Andrew Gregory

you, Kevin. Thank

As $XXX you down can million on fourth see quarter or total about Slide X%. X, balances ended sequentially loan the

trends declined strategic more loans sequential activity. business estate the were There transaction-related were X a and market saw of return growth loans. as drivers commercial modestly, primary to positive overall line While normal real key declines decline in signaled modest

more those sales loan activity in Housing last CRE has months quarters. to the shows and Also, past property which refinancings, significantly transaction increased markets. believe few First, over the strength X we been over market and due Senior production softer

fourth in growth. client sheet quarter, for further in declines and our syndicated third-party core strategic positioning Finally, consumer lending nonrelationship balance loans the continued

quarter, approximately the we loans, sequentially in commercial office existing lines. also year. generated middle sale billion While C&I commitments. full CIB With there for $X.X the specialty saw strategic X% loan from fourth regards was primarily loan loans and $XXX of year, declined medical These million to categories growth during growth commercial last building fund real estate, quarter, excluding growth last the ups market

a relationships. same credit-only deposit we areas and rationalizing time, to new both clients, our the growth lending existing, We strategic income fee objectives. don't as At with meet such continue third-party national consumer lower return prioritize in or that relationship broad-based lending profile shared are credits and have and

As a we this in see expect Housing reduction higher and and Institutional of production, a paydown Real loan to Commercial year. Senior Estate result activity muted

deposit balanced loan continue and core we organic optimization Our XXXX as in will balance focus efforts sheet growth. on

by X. which a increase in partially to was or deposits, and Turning a growth sequentially of deposits, Core fourth grew noninterest-bearing pace in early time the Slide Seasonality XXXX. $XXX X% by experienced to in million quarter, decline million demand interest-bearing deposits. noninterest-bearing the X% sequential a deposit level during X% offset in remains the contributed funds $XXX or of driven below X% public balances X% during declines and on basis, peak increase the a

our growth XX.X% overall the by borrowings Our $XXX allowed improvement million from $XXX quarter million, continued ratio third in broker in deposit wholesale and quarter. resulting core strong by funding us deposits reduce fourth about to XX.X% in to

increased XX deposits average we to fourth at funding our points look costs, cost X.X%. the of As in basis quarter

industry XX%, cycle-to-date October total As was X last the we which just at deposit was result, below a an total month. range basis to conference up December, costs were our points. From beta deposit communicated

costs to deposit first We expect continue will peak the quarter. sometime the during

$XXX X% Now previously the the fourth decline Net a our was expectations. interest moving disclosed from better is income which million in X. to quarter, Slide of quarter, third slightly than

an during asset basis basis in stable margin. completed in a costs, versus X reduced point repositioning, benefit X interest-bearing fourth December, point yields Better-than-expected the quarter. interest with X and in which the was increasing incremental net Our X fourth X estimated first quarter. to securities supported decline the the quarter earning core partial an third points the basis had borrowings was sequential margin expected deposit quarter, The in impact to

first repricing interest year. in significant margin half stable a of asset the relatively assuming second forward, the remain of benefits Longer-term, environment, by to look we followed net we the to quarter a the to fixed tailwind margin. expect continue As be rate the expansion stable,

curve, neutral profile remain to sensitive end remains relatively rates. the of to slightly sensitivity longer-term we and front the asset Our

exhibit easing due will lag an the cycle, deposit during margin and repricing. to between timing However, the loan pressure short-term

Adjusted in related fee $XX total onetime non-GLOBALT quarter. its portfolio Slide legacy fee income revenue Payment $XX X million million. million Treasury noninterest previous $XXX wealth noninterest a Solutions loan variance was the from sequential stronger reported up XX% & of due to million, was well $XX as The and or shows revenue as GreenSky fees. of to

noninterest $X with GreenSky, reflected expansion revenue is quarterly we fees the relationship of first in in in about onetime thereafter, an the currently of guidance. million With our related which approximately anticipate $X ongoing quarter and million fundamental our

quarter, previously announced There third $X.X noninterest the GLOBALT the losses revenue during $XX had security the quarter of end million at approximately we Also, sale December. million. the were in by fourth in which reduced

continue year. while XX%, up Treasury Wealth deepen our Markets XX%. have all Capital core noninterest in XX%, growth and invest healthy fees fees & Management to demonstrated fees streams and grew were relationships Solutions client We revenue this that Payment increased

Markets Capital XXXX. over jumped debt and fees In XXX% Finance fact, Syndicated in

Noninterest revenue market recent by has as well checking to also soft a impacted program. as changes mortgage lending been our

highlights are relative of environment. streams, However, revenue our of income of client the volatile from over the insulated impacts bank's time of the rate core stability the many diversity which fee

incentives. ongoing was noninterest $XXX have expense expense Moving will during third as headcount FDIC X% to inflated to expense. Reported In and million Adjusted year-over-year, in quarter $XX expense prudent noninterest and by assessment the sequentially quarter. X% XX reductions took performance Without needs Slide discipline. employment reported The growth. adjusted special noninterest adjusted we well our down million appropriately operating and and the expense, rationalization as declined highlights infrastructure fourth from invest future expense lower fourth still fourth would adjusted quarter. quarter for expense. allow that actions cost that benefited Synovus September, the was

Finally, sale about reduced the fourth expense in quarter. the million GLOBALT by $X recent

count in XX%, down As you a top on is Over head an has revenue increased revenue efficiency that per of from XXXX. in XX% ratio. same can quartile see increase XX, FTE X% period, total Slide and resulting

prudent on continue focus and as spend headwinds will sharp Our throughout XXXX through discipline we discretionary operating industry manage earnings. that pressure expense

NPL and and credit loan ratio XX X.XX%. quarter third net losses previous to adjusted total of with loan by increased classified to were ratio third loans, X.XX%, quarter, credit $X from a quality. from or stable of X million Moving the sales total X.XX%, and ratio up of Slides on the quarter. relatively a for basis $XXX charge-off X.XX% the for The million allowance criticized points of XX an Credit metrics

portfolio to degree monitoring We will of continue basis XX the and the loans in conservative half and a originations the be XX of to loan to high we apply we quality underwriting and in XXXX, analytics first points loan our average to continue of management. and NCOs market to and new confidence practices expect portfolio. have advanced of Moreover, strength

Capital position quarter XX.XX%, case on during FDIC Tier Slide core impacted ratio a the total support at continues XX, was But XX.XX%. X during losses special our Equity capital quarter. the was fourth fourth Common seen improved now our to risk-based our and assessment earnings and reaching As securities capital the position. throughout the XXXX, with as profile capital by accretion the

our range and authorization XXXX capital stable management of to XX% Similar to includes XXXX, prioritizing and for up prudent XX.X%. our target we within dividend ahead, XXXX. share million in Looking XXXX and a in have common plan capital $XXX repurchases to

our it back XXXX turn now discuss guidance. I'll Kevin to to

Kevin Blair

Thank expectations our from we December. in for outlined XXXX, with updated which I'll continue unchanged the you, now guidance Jamie. financial early is

of middle corporate lending and lines. in X% XXXX. be of production to and by paydowns, more maintain between Loan loan of by fruit expected expansion and core return confidence and normalized growth XXXX. X% banking to industry-wide expected continue to specialty to will despite and should Growth credit-only expectations which partially growth we for are relationships driven offset deposit deposit rationalization have be our levels in that our This success investment growth should market-related We a and business bear to uncertain on relationships. in continued focus growth is market, X% environment, loan X% core be challenging

The revenue the loan outlook adjusted flat negatively impact X%, XXXX if reduction our a continues in of The interest which to revenue the assumes for would outlook interest has to rates in recent rate The shown in rates. area, the be and negative environment. for X% approximately outlook rates range to volatility uncertainty maintained, X% by growth a X%.

impact, be It things outlook out XXXX will this how revenue regards considering Fed to the policy, X uncertain expect to is rate play guidance. we our but However, remains within interest true. current with

relatively easing during the short-term reprice the longer-term, it's net the margin interest rates. interest negative loans. a neutral as for cycle we short-term than First, income deposits slower and are over second, And to

margin and completed. to cycle easing the once the point expected is the So back revert starting to higher likely is

Adjusted between and quarter and personnel to decline of including back-office several assessment business noninterest a and less X% in rationalization fourth XXXX is third-party combination expense, real which the corporate X% special from discretionary FDIC and spend. initiatives, expected includes and estate optimization,

investing throughout forecasted shareholder and controlled the We The in will continue that to deliver management growth expanding long-term PPNR be result areas expense very year. core of disciplined while of NIM value. is acceleration in expenses

targets. Assuming growth an environment, with a to stable we expect our economic XXXX towards operating end eye strong and metric and financial longer-term performance

for investments earnings XXXX and the tangible business We and credit Moving growth. company of to as further are within in by our our book positioned tax of long-term our strong the revenue manage should levels our economic diversification capital the range Synovus' CETX footprint value strategic dependent conditions. the strength XX% target XX.X%, on within of of approximate sources. model the range, rate actions supported XX%, relative XX% to growth to as additional opportunistically capital, this and anticipate have primarily tax forecasted we'll well revenue, we and

now And open let's the Q&A. operator, for call

Operator

Our today Jon Instructions] Arfstrom from Capital first from RBC question Markets. [Operator comes

Jon Arfstrom

that interest that end in and built is rate range back of Just of of range, Kevin, you your on end it as lower of guidance the what assumptions, and Is guidance variance? well. into wanted the what and growth at kind But to this range? that look rate you mostly to I guide revenue Jamie go that when short-term the And terms on higher takes interest -- the rate touched driven?

Andrew Gregory

Yes, this Jamie. Jon, is

in other. activity comes volatility It like economic things fairly actually mix, risks rate about the interest similar XXXX, opportunities deposit the each and in think Fed from to are policy. revenue and we As

that So our you basically know scenario. guidance rate is a flat

So we in easing guidance. no Fed the have

at X%. We have the long end stable staying

say present growth, opportunities within risks those to we assumptions, we XXXX. that and that, those opportunities business from loan both would economic would biggest of come and mix, growth, But growth, risks deposit kind using the say

Jon Arfstrom

of How is terms headwind Okay. if the a about net that think income forward Jamie? at this point, that, how curve environment? outlook, of much And interest you is difficult your in

Andrew Gregory

give We XXXX in on the front to but to bit use rates. a the scenario best We most the Yes. interest weekly. our volatility rate they deem easing then cycle end stable just impact because into of good insight assumptions debated how the decided to performance change given speak based so could people keep whatever the appropriate

assumptions of ago, we are Fed today. couple where compare you the easing If very a are weeks were different even where than for they

it comments And Kevin neutral when and by relatively entered the dependent margin. cycle guidance, -- dependent timing was of the the when as declines end the few cycle. how our easing to that the expect speed to does his are is curve. come to of reduce of a cycle, us, during lag easing of will we on deposit lower easing to we ago, that's impact relative and in front yield XXXX we that we we the for on the loan The levels, things. But longer-term, does out And to just mean begin where when the the go. minute easing, that a But be mentioned margin deposits Fed on the what normalize is far of costs the the the similar it cycle

we the then in X% think anywhere But at to during starting think our of those the stabilize the that costs And about margin. once and point cycle. that, be deposit would the easing to could X% the when between the revert back reduction margin, we impact impact we easing cycle again, end

revenue But a to X.X% up is With impact. generally scenarios XXXX seen anywhere speed of economists, it the could regards how be that's we guide, dot important, et markets, year full the those the important, very is Fed is full plot, that -- revenue, given to timing from we've important. the see year cetera. So depth

are included be not expectations. also other well account to an economic in easing growth, cycle, included positive into deposit there guide. the fee comments -- likely that, And as it's and associated mix that to impact account But not doesn't It as in revenue things that's that a credit. will are that here our is, take in One shifts. my positives

Jon Arfstrom

all Good. That's helpful. very Okay.

Operator

question next Rose James. Our comes today Michael Raymond from from

Michael Rose

to tailwinds go -- how on Kevin, the maybe partnership to on wanted and expectations should wanted are we move can headwinds that year? and for the to the outlook as I the the and X, chart expanded I go to GreenSky Slide if expand just, up to frame it we you relates as then forward for

Kevin Blair

Yes, at how of I to to new we've the that our to of we Michael, try revenue and of the sources growth take headwinds. slide, it us speaks add some allows diversity when look think the continued on to

a of whether or so income very the a sale successful where And business this on like products reducing with year. movement last just NSFOD it's or Repo, our been seeing we've

look GreenSky, chart, work to that left-hand represent and increase side the sizable through in the as we're at -- which Service expect the income continuing a finalizing still we of to contractual Banking in a you If XXXX. is that contract there,

merchant within within own acquiring expanding as majority But third-party [indiscernible] our ISOs. a we're our where also of company sponsorship our interest, expanded a we we've Banking pay, Service, offerings

year-over-year. contribute a Banking programs as growth will of so And those all Service

you at we've Treasury & Payment X look XX%. last grown the at if Solutions, years,

XXXX increase some to repricing expansion as well with continue in practices. opportunities to that sales of our as expect continued We

X%. Wealth XX% year, AUM growing was with this past up

the model. our talent grow expect We business based and on continue to to of success the that

CIB 'XX, as continued markets, up in expanded and 'XX. will Capital That's continue in bank, we've to grow grow. that we've our to wholesale in XX%

traction And guaranteed whether of we've on some that's gains, USDA seen the loans. then some or SBA government

get year so of will this of And bit as you it help look result at we'll those, NIR offset growth that. headwinds, when coming a to all those we in of little think and a

Michael Rose

color think year? And mix you and you And some dig all you costs, think then color. maybe the Jon's wanted cuts of to would down couple as that's this to that interest-bearing outstanding banks. great you related the assuming shift of pull That's do I be just get my deposit comments But a lot a how of I kind question of I follow-up. guys for rate big into some we just questions. of able a quickly Jamie. pretty mentioned, the appreciate do to

Andrew Gregory

our further your Yes. X questions we declines to the buckets. question that -- up It's on for XXXX assumptions, on total When really XX% in one bigger the to costs, industry sure. assume of XXXX deposits. somewhere of interest-bearing you for and well, But XX% between into in it we first, break NIB

buckets, so excluding And or X NIB. --

of deposits maturities repricing, CD broker reductions, have deposits systemically portfolio, high we time and the would those our XXX systematically kind call what which reprice schedule. are We deposits core beta the near pretty given systematic -- in include beta, broker

simple. pretty that's So

centrally. But deposits you about we then rates rates. total deposits. have reprice interest-bearing decisions on of And what we the XX% are those within make interest-bearing deposits us, for the is, And are those our deposits. lower have through And nonmaturity standard

And around beta will exception but cost. little be lower, higher XX% deposits so repricing simpler those than a the are total, is exception the in price the

be but a they expect And the lower, conversation. do beta involve so we to

on focused and prepared already we're ready address the do of of we're cycle. subcomponent how that we to easing but we're so deposit for And strategies portfolio, go, the

Operator

Our from next Steven comes question Alexopoulos JPMorgan. from

Steven Alexopoulos

clarity your in ask third a question to NIM I be here. Sorry but would important think row,

forward that a to X Jamie, you current flat rates scenarios know, if every get guys cuts, I plays changing there's But change How forward the if out? you to say, X.XX% guiding in at day. are look curve And does XQ are that NIM 'XX. the just curve, under

Andrew Gregory

the assume need you X% going. contracts the on cycle, around the cuts quarter. look XX how in steady if that I between would and to But think meeting, of compression the the fourth a during somewhere a prior comment X% per it's X% fast X% depending just to assume to I margin you margin

Steven Alexopoulos

and know eventually NIM is And to could got XX yield returning X% to into used commentary normal your had I one $X.XX it's you be down, been normally to your where with a curve? the range? about back X% to to think Do since that be, get you years we've $X.XX. rates, used at interesting NIM slow it.

Andrew Gregory

in So deck, our it to when asset rate prior it when fixed included further include we've we in X decks, repricing. this look out, due investor we fixed benefit didn't the rate The repricing doesn't asset could XXXX few XXXX And that basis go forward It does is and in XX approximately XXXX. but you it for forever, points. years. next run go for the

so that, really strong is tailwind. a And think that we

Now loans. and in there would as loan headwinds other are not be where deposit that there. as spreads be that originating far mix included is and are that, and one tailwind business But would you're mix

And us and do cycle would you're we what of believe we out, tailwind we continue to see play to more expect plays that so this and kind the of it describing is, get whatever out, have however through to that higher we a margin. historically for easing the with strong in normalized multiple that when get that years, context margin what's

Steven Alexopoulos

it. Got

other Okay. ask question. Can X I

about that guys strong to Day, XXXX, more it your core company, company, you're at down position, markets, growth you X. income think to really are I Kevin, of but look When growth, of think X% about you the strong And Investor I the revenue the So initiatives, a is more I And, improving you're growth. organic you X% be efficiency, back fee plus guide, I if level all at pleased had really I your when perceive for with look you, if will. you growth? that this, the

company Just the the this of curious on capabilities revenue on take year. your here

Kevin Blair

Yes.

of NIM from revenue first percent in the much the function quarter. to more a is think quarter fourth in decline I of growth the

I in think when our fourth see it grow. does that to excited, to what to PPNR. 'XX, so But inflection look versus growth look me quarter earnings there's number. and XX% quarter full that's our strength you'll revenue, footprint fourth Steve, model, really it negative X% you of of 'XX and get what at it in on more a when you point, ability the from And And does increase go an that an at you show year-over-year and our shows is back

basis, But fourth metrics, I X% the look at muted. But when quarter what comparison looking apples-to-apples in more think, that it year-over-year, more and is growth during declining year-over-year versus look much which you which our financial when makes quarter, more you bottom fourth is XX% 'XX, supporting you're seeing, at line, of you're at margin -- story. in growth a of again, much on constructive look

Operator

from Our today question comes KBW. Brady Gailey from next

Brady Gailey

is I I somewhat that happen just -- that happened and in question GreenSky. my will first on the in understand onetime nature XQ. XQ income in

add But is Synovus. GreenSky the could as you correct? income, that earnings think is And look longer-term, what impact to I all that realized fee in

Kevin Blair

be go-forward million program. said between for previous the of call, and $XX in is $XX the entity. what the a it's a the really I function look, this new And of million And Brady. so is, number production could underlying on It more revenue

on fee the on based still And maintenance administration a so we'll book. get anything sits and continue to that generate we'll on that revenue production,

that year rule good But will of So doing. the for to tied much thumb think a they're volumes is to our I more $XX be production million. revenue $XX this again, coming million

Brady Gailey

business over you right. going with exited Synovus did so be the bond Kevin, strategic then right happy Are Okay. picture, years. helpful. XXXX, forward? medical in the look been Or you know and now? much I there where as big you you we auto, should restructuring. change expecting All there's other at bigger are office sits recent just That's And moves that

Kevin Blair

our with today. mix where happy I'm Look, business sits

that's whether to in as businesses, certain I think private Service. platform, our overinvest our platform, Banking to there are opportunities continue middle our market a wealth

investments see And make so those us continue areas. to you'll in strategic

growing, accounts. balances as those a grew, foreseeable are see where where I exiting in of lot consumer, drawdowns engines things the you you at decline they're of strategic it well bank be we businesses, continue forward. community when and provided this specialty, because things not And market, some we our as like as going but slow of strategic to national at that which will won't those look not think like for those will be like or slide sales third-party -- there'll But to look future middle focused. loan you sales, loan quarter relationship relates our declines see you obviously, Those growth

market thing. But low sales where CRE on agencies. you the growth historically really the quarter payoffs activity this We're and more for some are saw same levels constructive because they've a marketplace seeing of past those see in wildcard been where or that we increasing declines refinance at comes Housing with institutional Senior activity

I look where be an some business really We'll we won't that the I be faster at you like shrinking on feel we've and business sheet as growing as mix optimization portfolios, so seen strategically We'll just some 'XX. are. example, in about than the others. but put dramatic And loans or see good balance

Operator

Brandon King Our Truist next from comes Securities. question from

Brandon King

CD you previously, potentially case, an the So enter update cycle? CD could the going short-term. start to margin. us repricing an I that's headwind forward But will strategy be on easing give NII to guess your a we and still as

Kevin Blair

will we strategy, CD come the CDs quarters. renewing Brandon, forward a coming have look, Well, that lot in of still on

] XX points rates And so look it this pricing down again actually quarter. at to of when aggressive quarter, was you be CD, and which [ market to past rate previous new those about Obviously, keep basis a combine them versus books. at on XXX CDs marginal production was you very the going we're renewals, when the to the

perspective, marketplace it there's you our at so of little And is in bit a the today. [ XXX been competitive from portfolio rationalization ] about a shows but a that

produce CDs, new the market money decision time we still which people moving as accounts be of again, from are continue the money to deposit. consumer, to into appears So

And sure we so to preference. pay want we the make that attention to consumer

So to produce we'll continue that.

But at point, the some largely is. equal portfolio where that will production

the have be pricing. past, mix. as pricing relates benefit has in So of deposit we'll deposit it less mentioned Jamie will will And as real to to be reach headwind deposit it the a that maximum

with face that shift offset the continue impact, we CD down brokered we by that you positive be So can mix. deposits, will bring with production as and to replace negative in core headwind a

we'll why largely we deposit in think, And peak for the so the pricing. see quarter, first that's

Andrew Gregory

add Brandon, more little answer. to that And just a

just the that marginal impact The CDs X%. ], as Kevin so from that as first than by we fourth are the core in was much and be quarter, margin is over a bit look mentioned. [ average is less of a core be the of in rate That's And led in growth deposit money which will then quarter, it will about to XXXX, change XXXX. XXX market XXXX, forward the maturing, the little our

And so deposit also that, total when costs think positive be will believe you a going we that about forward.

Brandon King

balance Very more then, just to this helpful, your pay regards maybe on very helpful. with And thinking debt. down Jamie, update us year an and position the about the potential sheet managing how you're give liquidity to

Andrew Gregory

what we out As there and we serve we is look our balance clients. have at liquidity so best, in position for we strong. made us positioned is the really do do our sheet, go very efforts can XXXX, which XXXX well The

that us or attrition continued $XXX $XXX the quarter. of how potentially expect a -- from is you portfolio, million we feel should year. this in And first paydown our million broker to heading What here to into so see deposit that's

than Home Bank a on billion low very are less We advances moment, $X little the at at year-end. Loan

liability we this to year. And on don't We year. and loaded we imminent balance growth, try we as which be optimize core loan are the growth could deposit So back-end be we which throughout to to debt, sheet. more continue forward, we'll core will side balanced be the that the have growth, unsecured for balanced of look needs any think think that positioned more

between year, that's So we gap deposits but in not little early and a the a loans bit unexpected. funding have may of

Operator

next from from comes Wells Timur question Fargo. Our Braziler

Timur Braziler

little a question Brandon's asking Maybe differently.

wholesale funding So went to from XX.X%. XX%

continue You side down. balance I Where funding migrate as guess, could to where sheet, the target work continue the liability is the you working there? that that continue ratio on wholesale to towards? of ultimately,

Andrew Gregory

altogether. liquidity right We're We're with is where it very comfortable with now. our comfortable

a really that balancing. a it's manage ratio That's so to. not And just we

the sheet. liquidity. lot we about do we funding, optimize to a at the fund and all liability marginal so mix of of public of funds, But sources think balance have And cost we our look including of sources how our higher we

position, forward go the sources we down. have that look higher lot we take of are to given of Southeast. intent a as and liquidity have liquidity being the beyond, of And our right into We cost. now, XXXX run it's of advantage But to those and the luxury our in able out opportunity

as Synovus Kevin and And and grow mentioned more and clients. in to Steven's response more out to go deliver question,

deposits either in fund funds. well for and Loan that, Home being that, even include funding, lot wholesale priority But advances of we easier growth. that are or not some have one marginal or with would availability we core beyond a go And like believe sources of out Bank and public we liquidity so we deposit those whether grow of positioned broker or which that

Timur Braziler

Okay. And Got then to loan it. side. the switching

your care, had What the the exposure I Housing. in in you And are credit one, sale balances earlier where the as kind down at remaining So office look of at you're from your to medical working you guess, things field? exposure? far that is quality medical year, as for what's health look then portfolio? Senior within Housing two, guys and a it Senior primarily as to you credit standpoint,

Kevin Blair

X Well, more payoff that On Housing there, really different it seen about a is our you was have really of we've down it activities. perspective, areas. on look, around Senior X% lot fact more and balances from that it's health exposure of at look about to the a C&I, managing care We talk our side. the across

where handful quarter, Senior a good were good Bob about we But we very there are And we of that at exposure. overall incurred that. losses, Housing. of about losses touch feel so on we in the can and When this feel the you really some look

to we're our care. not so And down in trying health exposure manage

fact of activity. has that of we've the a just it been see payoff in Some constructive market started more to terms

when payoffs loan $XXX that past that, quarter. about a quarter in about put running been $X.X broader about We've this our million $XXX to had a in we in billion we talk million perspective, And book.

So about $XXX million more in payoffs.

average, If we in billion activity. generally run you look at payoff $X.X about a X-year

more to back we're a normalized So level.

has things picked like activities continue you CRE to slowed some So and that just given Housing production payoff Senior other up. and fact the decline, portfolios could see

on credit metrics. the Bob, touch of to if some you want

Robert Derrick

Yes. Sure.

the is space to in metrics, portfolio pass-rated that of Senior Specifically Housing XX% credit. our still

been also in fairly a ratio payoffs the the that and a there market really Charge-offs just to small pick low -- the Kevin's net effect manageable, beginning loans the of of would have reduction rated portfolio. are and So also loans nonaccrual of up, we there. to that be point shrinkage -- specific have and small. specifically, And

Overall, health we're though, as care pretty comfortable an with industry.

a some to vertical itself, have that manageable Investment it's relative Senior it's the lot Housing a We business specialty probably remains in and specializes portfolio increase but still in characteristics, that seeing the real [ in payoffs, estate of credit care, reduction Corporate just Banking our health the ]. quality it's certainly

Operator

Next Janney from question comes Scott. from Marinac at Christopher Montgomery

Christopher Marinac

I or to growth standard a a fit Jamie's deposit of explanation new the few sort callers in the having ago, using there. even it and of is looking where customer you take growth of you dive us objectives? on sort your customer, if focused? additional at wanted or exception can that would Jamie, success you're give into Kevin Are the background terms you

Andrew Gregory

XXXX. half in growth, for component the speak we think headwinds including core X% billion with $X it's of I'd in outlook about we deposits. XXXX year, deposit speaking in bearing to this significant As decline the like to a had XXXX But very our before first non-interest important to because year, to the deposit growth

that think is that, growth, up is core XXXX. strength deposit And year-over-year. will that, result driving we underpinnings shows I And think forecast I incentive production mean realignment. of of we And focus, our production. for XX% growth the a basically the that, that our what continue. strong think of renewed deposit that was And production that's

incentives so have we are pushing -- And our it.

have intentional the which client, business our We build-out growth. increased bringing will the deposit in include full of around aligned

and new leader with solutions to core CIB hired who's full focused on they've our to And our is deposit we relationships. have balance XXXX. liquidity had X% clients. of We help on a continue that growing, in specialist in new growth a bring wealth liquidity commercial data business our one clients with to partnering private full in business, relationships. lines middle and existing market clients And commercial target is point

And so should we we fundamentally, well think and see to year, this that, believe success. that positioned grow deposits that continued we're

Christopher Marinac

actually Great. think trigger more rates on movements Do lower C&I-related that you could business? your

Kevin Blair

know, just utilization increasing folks down cash But several balances you could as their this a We trigger line it did Chris, using last seen past the line in just come #X, see pay increase for same rates to Well, lines. down. we've quarters, modest as quarter.

rates drive line lower will some utilization, think one. I So up

rates that slowing. if economy us tells Short-term, is it are going the lower,

it So people there But to to result may as that. more or of starting loan down stronger conditions think it facilities that the underlying Yes, growth -- and inventory in moderate come in remain prices drive constructive. be I impact C&I longer-term yes, projects looking or a having quarters. latent the term, at expand add as again kind the their are out would up could economic and economic

Operator

Stephens. from a Russell now question take We from Gunther will

Russell Elliott Gunther

margin clarification I of on points commentary. have of just the couple a

around expectation in the the first, 'XX. X.XX%, earlier XQ from the that's month down X.XX% So XQ 'XX the despite of better outlook result in

us through walk what's just you could changed? So

Andrew Gregory

the reduction end That simply long in the the curve. is of

tenure X.XX%. that's to move from a ] drove decline [ X.X% That the to from tenure. X% So the X.XX%

Russell Elliott Gunther

just again Okay. And the then X% the to up follow then using on X% curve. forward decline Excellent. to

on to expectation? So 'XX or XQ the starting NII you the are to then is talking are And Or relative of as you result point your percentage dollars? basis? the 'XX guys relative margin guys a that XQ thinking

Andrew Gregory

reduction could to to X% your if the in to that X% there margin, is X% want the the assume X% that May, -- be begins X% whatever the in point X had points lower. assume, in assume Around and for to X%, that's you if margin, you so XX you QX you on easing basis a to Fed would QX,

thinking And we're that's it. about kind of so how

in that plug cycle we're just start Just impact know your because is whatever so aggressive once do how that continue to to the cycle, something this and when what you change assumptions then be. and expectation just is, around to that the we wanted in expect is that the give it, margin we to you easing could

Operator

from Preston question final UBS. Brody Our comes from

Broderick Preston

wanted on saying XX kind static cut per X a just was a to, to Is sheet? I that points. just Jamie, balance that of clarify, again, that you're basis

Andrew Gregory

That's no. be No, margin through our where of expectation That's cycle. we just not during progress cycle. That's the as the will per cut. the

Broderick Preston

Okay.

quarter? forward would as outlining curve it the spending X.XX% point comes to be of by kind for the off the X the NIM of if fourth XX points the So you're pass, basis that to it's

Andrew Gregory

range, could a if range, the the they're the be so the going aggressive end that say methodical, it's then could be of higher And more Yes. of within it's the slow, impact. negative larger if And the at you is, growing it faster, end to that range. the Fed lower

Broderick Preston

Got it.

And Okay. curve for within forward of setting runoff? within deposit you aside, the kind your guidance, broker what are including -- the

Andrew Gregory

$XXX each mentioned $XXX million and not I high to -- going this the then of $XXX you forward, million the decline QX range to assuming quarter but are to probably QX million quarter, -- maybe We in deposits. $XXX would that million broker end assume

Broderick Preston

the Cool. income. $XX But it aside, still in And last one looks know was there. other to GreenSky the other on line was ask the million a setting it decent for I then quarter Okay. that like the just want item. one GreenSky, income I

is And income, And fee base growing that could just it the off what And is remind for growth that? you so drove I guidance low single-digit what just in wanted ask, to us of? for sustainable?

Andrew Gregory

other a repeatable. necessarily had that, prior that a income, in BOLI fourth in of -- The increase versus the about million there's little quarter We quarters. bit is $X revenue not in

something. that's so And

fee about the there headwinds. think X are first we As in quarter, revenue

transaction million, will you the the reoccur first that quarter. the You then $X fourth that in have quarter GreenSky not of impact have

second part of the your was Brody? What question,

Broderick Preston

on income that in fee Just single-digit called the growth I slide. you out think the low

remind off you're is? me base growing Just what the that that of

Andrew Gregory

what $XXX million. at right -- this for X year, that, We fee had adjusted was revenue

Kevin Blair

It is. right. Yes, that's

Broderick Preston

The $XXX million.

Kevin Blair

$XXX million.

Operator

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

Kevin Blair

as and morning continued your thank for of and interest questions each you in well your Drew, Synovus. you, this attendance as Thank

the it in your on for important you again once team strategic to and members investments exceptional progress delivered want basis. happen also client of thank our daily on I a the priorities XXXX, contributions experiences, solutions to all and make from meaningful

the While satisfaction goal service raise in trust client in the our ranking Southeast XXXX levels we to J.D. and in #X beyond. Power, is even our from XXXX customer and received higher

back our growth defensive we are cast more signifies new stance. a our after XXXX, shift mantra, a external we a eyes As Grow mindset This to embracing towards necessitated a Bank. where the challenges year

by prudence and pursuit our strategic will growth However, be of fully with marked objectives. will goals be aligned our and

points clients. We client be cultivate and valuable by our to streamlining touch amplifying experience, the providing continuing growth more will to advice proactive at

model will allow our products delivering of across of our wallet. In facilitates addition, share our and further solutions, us business seamlessly which increase lines our and and to deepen relationships

the especially position lastly, several peers. over And sheet, delivering prove stress. that even to last strong time, that the our starting metrics economic safety we're of a here improving preserving and to relative Synovus, years deposit capital levels retaining at with improving to profile core same our soundness put the key taken elements of us the and of balance our and credit fortify during base efforts committed At to periods diversify in

client-focused in will and this and As year journey, to market to in we well that profile growth we our XXXX present signifies continue themselves will recommit Grow our complexities to our Bank bank, even years an to this the continued the more the amidst efforts build come. enhance equipped uncertainties. derisk Therefore, to navigate to and continue stronger, intent risk-resilient

we we look you at many with partnerships, your meeting and forward conferences. and industry of quarter forward to look this continued upcoming always, As appreciate

we our earnings operator, now will call. that, conclude With

Operator

That today's you. Synovus Quarter concludes Conference Thank XXXX Call. Earnings Fourth

disconnect You now lines. your may

Synovus Financial (SNV) 18 Jan 242023 Q4 Earnings call transcript