SNV - Earnings call transcript Q1 2024 | Synovus Financial Corp.

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Operator

Good morning, and welcome to the Synovus First Quarter 2024 Earnings Call. [Operator Instructions] Please note this event is being recorded. I will now turn the call over to Jennifer Demba, Head of Investor Relations. Please go ahead.

Jennifer Demba

Thank you, and good morning.

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

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

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

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

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

Kevin Blair

Jennifer. and you, morning, everyone, XXXX call. for first our thank quarter Good joining for earnings Thank us you

first commercial market, banking meaningful progress specialty steady strategic or where growth have C&I, key well deposit less that we rationalization Synovus as such over on for investment fee several loan tangible quarter you results priorities outlined produced the have continued as in in the corporate last Our and relationships. middle we categories demonstrate quarters. portfolios as and loan

disciplined keeping to continuing in contraction expenses quarter higher-cost grow a continue investments basis, weaker as in deposit areas and seeing noninterest continued generated We total deposit key while control operating growth expense year-over-year Core a revenue roughly broker in in seasonally diminishment flat. remains while improving are core with well on as deposits. categories trends noninterest-bearing

funding with quarterly improvement wholesale key loan highlighted in and further strengthen sheet and to by losses soundness lower higher balance and capital metrics, Our safety our continues ratios. stable, remained

and well the our team recognized expectations trusted through talented of In are advice is members of Our service. be we and and result needs clients to financial a Synovus direct valued nationally meeting excellence. continue how success our regard, service for that

that We We XX fourth businesses clients. the over for Synovus of highest recently are the small our to were awards and number proud performance banks XXXX awards earned middle-market serving XXX evaluated. among extremely Greenwich report that received total

We also the Power against in survey Southeastern and recently consumer satisfaction continue perform to client very well released J.D. peers for trust. our

gain CIB team, quarter XX Our new Grow relationships program, our approximately new pipeline from existing our the largest business middle-market grew sales commodities to continued we owner of capability, expanded hedging our our with year-over-year wealth AUM first date, built as to a new our generated XX% to banker traction XX% Bank treasury and wealth existing finalized the clients. strategy, by added initiative over relationships GreenSky in expanded

launched pipeline this Speaking payment staff immediate administrative workflows, of solution new team, clients. called and are new since payable treasury seamlessly existing Accelerate alleviates accounts for our announcement. building has introduce return we We differentiated providing earlier the our which investment month, faced and by solutions steadily burdens into been on a an excited integrates this Pay the capability and to

track in community a record successful have we banking. Lastly, long

$XXX million. our deposit $XXX million, generated quarter, of Bank approximately of core growth produced This Bank almost our Community growth and Consumer

a and us revenue value in to core relationship new well-positioned of future approach, to invest sources allowing drive businesses growth. long-standing Our continue through growth

of quarter of X to financial adjusted Now for diluted reported Synovus $X.XX. EPS EPS and let's $X.XX XXXX move highlights. the quarterly Slide first

million first $XX a by incremental FDIC assessment adjusted reduced special EPS quarter our However, reported and $X.XX.

in prior the initial quarter. from impact the assessment EPS $X.XX or million $XX a Following special

XX% annualized. specialty consistent we corporate and and lending lines, business categories commercial middle including in loan mentioned, growth investment healthy up previously high-priority banking As generated market, and with our these

highly core in rationalization quarter. flat However, The due estate and at remains through $XXX focused funding first and generation fourth to seasonal an quarter versus flat modestly in of senior loan which the basis utilization, expansion and deposits led loan production activities line sales points the X portfolio deposit our on was that team grew the quarter million lower. growth accelerating payoffs Despite period-end housing increase strategic rate a in paydowns real roughly was and and product efforts. to commercial headwinds, first approximately core

deposit was quarter a throughout improved decline course but deposit by of January's $XXX March. the with of noninterest-bearing the increase month flows the impacted million seasonality, in

the reduced growth, broker strength we for core quarter. the of the deposits consecutive for Given third our deposit

business. noninterest key in Looking and our including sponsorship treasury solutions growth at revenue, of commercial lines we categories, experienced payment and year-over-year

to adjusted the first However, given declined consumer experienced lower more correlation ago, a loan a GLOBALT third lower quarter primarily service result income wealth by XXXX was relative from quarter revenue and in charges driven levels capital markets year the to total checking income strong Also, and XXXX of elevated the production. noninterest management as modestly 'XX, modifications divestiture. of

has a investments as flattish Synovus well position that expense of ongoing growth overall a from level shareholder long-term value. core led order XXXX standpoint drive year-over-year strategic diligence initiatives as cost to competitive well to in while maintaining

quarters. losses quality previous front, asset stable On credit were the with

XX.X%. while XX% earnings further ratio through and sits sheet share in solid levels X opportunistic bolstered uncertainty, in accretion our Lastly, balance equity measured we half a equity highest our X are given the years the in the Tier X Tier first currently amount common completing management repurchases. and range of of quarter Common upper over to continued of economic stated

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

Andrew Gregory

you, Kevin. Thank

Slide see a on loan basis. X, can essentially on linked-quarter stable balances you total were As

as first on offset declines. As in quarter. expected, sheet our market specialty key the during was middle was and Consistent commercial, strategic which transaction-related growth muted growth lines optimization saw loan client our was with $XXX balance million relationships, focus business core lines efforts CIB and growth, by

by transaction activity strength of estate commercial increased is over housing as real evidenced X last levels sales and the property markets due to in There the quarters higher senior refinancings. and

throughout We result activity expect these transaction in XXXX. portfolios declines this increased to in

prioritize that continue syndicated also clients reduce revenue portfolios and noninterest return growth. balance or continue lending first our deposit with our strategically lending quarter, meaningful we our nonrelationship areas objectives. meet the further growth to relationship relationships third-party consumer sheet Consistent a don't positioning rationalizing third-party lending client syndicated strategy, lending core in with to our strategic for loan overall while balance sheet profile and lower as such credit-only consumer in and have We

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

bank. quarter. million Consumer the the growth, in a balances Bank first contributed deposit saw and sequentially to during decline The $XXX Community Core X. Slide the to Turning Bank strong deposits seasonality grew in wholesale while

for the within core we should As our growth from continued stated deposit the higher remainder noninterest-bearing demand the combined consumer deposits bank to year, previously deposits, during and Client deposit the during support range. pushed This wholesale execution growth quarter. within look total guidance time the growth, continued remixing costs of community first elevated remained quarter. segments and of our with our

growth the of quarter, X% contraction. trends followed in million and in deposits million contraction deposits was in fourth or We of March. significantly from January million consecutive by as noninterest-bearing decline $XXX in February Brokered declined less the are which quarter was $XXX encouraged the by $XXX third

declines the coming in further quarters. brokered in expect We deposits

of increasing in aforementioned trends XX to points first the costs, resulted the deposits in funding total at our look by we quarter. basis As cost X.XX%

For X.XX% of total was December. month in March, cost the deposit X.XX% versus

December. Our XX% deposit versus in in beta cycle-to-date total March XX% was

primary Though the million core approximately fixed X. quarter quarter, and asset our production, assets and higher interest as Deposit Moving mentioned, more count, more further later lower cost points core on quarter. in million, modest averages mix The income first interest Net interest-bearing deposit increases ended impacted margin increase. within the decline of a from the we $XXX by cost X.XX%, day were the deposit the which the repricing quarter margin a mix basis and represented benefits in this the partial to rate quarter. was impacted Slide X included sequential spread fourth loan revenue by Net balances contributing decline X% somewhat than factors also deposit at to our and $X decline for of earning were decline the fourth offset a repositioning which securities in the rates a in constructive newer trends the first quarter the trends as for quarter. of than portfolio.

in noninterest the of million revenue decline income forward million, million declined $XX in down the or quarter primarily As million margin. and reported previous X% or million back we to commercial X fees. sequential X% revenue book Adjusted was stability basis, first and in interest $XXX declined relative noninterest $X net Slide by sponsorship to $X related second quarter. quarter, the total related GreenSky year-over-year. shows look a was On $XXX a we expect the from

commercial for quarter-over-quarter These markets fees management quarterly the impacting stable year. of and the relatively declines sponsorship the expect remainder elevated revenue partially mortgage, also wealth capital quarter, were BOLI by was comparison. fourth in higher offset fees. We the

our middle lines. to as year. checking GLOBALT core ago markets as X% from other impact XXXX, Wealth When Also, for income fee revenue as expanded sharply consumer markets-related in growth by second approximately the quarter offset Treasury primarily down looking CIB growth XXXX. driven in the the investment. quarter, tailwinds last led banking result due well divestiture capital of our of relationship. fees of slower at expect Also, of business Despite the GreenSky management XXXX noninterest modifications the we X% by third year-over-year income, and were implemented the and These increased quarter first year Solutions a capital market increased was quarter Qualpay year-over-year, Payment a

that in deepen demonstrated capital payment which revenue relationships, continue core management, years. past markets as noninterest We few and healthy and invest solutions, wealth growth treasury over streams the have such to client

expense million, noninterest driven was million the assessment. almost was million operating $XX increased X which of in $XXX expense Reported and Adjusted or incremental Slide noninterest adjusted X% special The impacted year-over-year million million incurred from was the X first incremental Reported $XX $XX special special noninterest a entirely million recognized expense. was initial quarter. expense million, the by the and to by $XX assessment was the FDIC or Moving $XX in XX% prior adjusted impact including FDIC highlights noninterest assessments the expense cost down of our quarter. quarter. $XX $XXX million total fourth discipline.

employment expense year-over-year, with environment. our management X made will reductions $X.XX first in proactive Employment remain higher quarter, headcount impacted by million expense quarters. Seasonally past the which over by earnings expense we was the challenged X% Importantly, disciplined down revenue in by expense $XX inflated noninterest benefited this an estimated approximately

in XXXX expense adjusted be of noninterest XXXX. special assessment relatively the in in quarter FDIC flat result, of the first fourth a the excluding As should XXXX, imposed quarter

Moving X XX and on to credit quality. Slides

continued XX for scenario. with credits credit weighting quarter quarter basis fourth $XXX credit Net levels. $XX classified the manageable prior and historically or quarter loan at credit points quarter XX a million basis $XXX ended in and or up basis low toward nonperforming compared The which fourth in quarter. raise asset points allowance from were million from first in X.XX%, as losses the economic to allowance criticized reflect migrate levels. ratio quarters, Consistent we slightly Our downside X.XX% remain to third of the at sales. valuations, million Total XX the increased the very and or points to but loans the excluded the charge-offs loan rose to the trends migration heavier metrics in first X.XX%

expected net industrial were resolved basis points XX later by accounted impacted quarter this credit, which charge-offs be one of and is commercial to and net and for metrics First credit charge-offs month. particular

strength heightened portfolio a have portfolio of this confidence reduce in the level macroeconomic diligence We loan and and higher we degree a of nonrelationship our in continue of will our the more credits uncertain to and manage quality environment. with

in our As to position first seen the on Slide XX, quarter. continued capital increase

capital total With capital earnings the at XX.XX%. preliminary common risk-based supported the XX.XX% Retained first with in quarter. and accretion ratio now equity reaching Tier X

in certain within of our in ratios. increase quarter, decline segments the assets, executed supported our equates $XX first in the in a common of efforts modest which about million X further Additionally, capital. which points basis this backdrop, resulted to growth rationalize repurchases to risk-weighted stock approximately we Against capital

environment. target a within ratio to XX.X% what a capital robust of against and an and aim will continue remains a to position macroeconomic maintain uncertain XX.X% range We CETX

weighting. for is loan into a flexibility weightings. incremental ratios this note our Looking When we risk completed, deployment. underway our and that optimization analysis risk to the second capital would eligible and being for certain support result of This upon currently that subset eligibility asset deployment our quarter, is reduced documentation loan expected of of portfolios for capital capital contingent portfolio a the in should is reduced provide incremental the risk-weighted

this on share near will details the further We the term. exercise results of over

we our common the April on interest securities tangible equity AOCI variability to billion and from reclassified This portfolio of to maturity. Finally, available held sale will X, thus, within $X.X reduce the rate ratio. of our sensitivity for reclassification

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

Kevin Blair

I'll continue and you, in still fundamental paydown our growth and real continued now XXXX. and offset be success loan the investment is specialty by on rationalization first housing activity. quarter Thank nonrelationship lines to period-end payoff expected our and supported estate Jamie. X% be remainder guidance and in commercial to with should updated middle banking, Growth X% of the by existing XXXX. and in experience corporate senior for market, pipelines, credits, Based

Our for aided to seasonal year and as deposits indicates growth tailwinds X% initiatives. new X% year, a progresses growth the the core for within current forecast core by funding range

With are remaining the in for into the that having process a industry XX% end impacted roughly the deposit the current of of revenue cycle points months X% largely the residual increase beta occurred experiencing. FOMC X the deposit our forecast now are upward the the between to with range, and should negative deposit to second X% XX%. ago, last growth by some costs, Under in and deposit our quarter and believe remixing total pressure this continued we peak we result costs stabilizing at for rate low outlook

rate for based remain optimization capital exercise. risk-weighted the include of revenue interest Noninterest half is forecast remixing. should ongoing fixed environment this year repricing from year this Our interest growth not upon the deposit markets-related overcomes a should rate does stable repricing fees improve potential pipelines Net as and asset any second experience income benefits asset and in as strong.

on to build. to Payment continues core forward execute continue program We Treasury and in the GreenSky and new growth our Solutions flow

growth adjusted special Our quarter FDIC for of noninterest the after guidance expense impact assessment. the adjusting first is unchanged

fourth of be anticipate assessments our this of will we first 'XX noninterest the quarter Excluding special in stable and 'XX, adjusted year. relatively quarter the expense

across We uncover industry and continue our to geography. credit manage loan systemic to and closely monitor any portfolio or deterioration themes

basis of half at stable net charge-offs expect to to points. continue relatively the We the year first be approximately XX

environment half Given we flat trends, and net a assuming the to of down certain credit the individual migration stable the considering economic current large relatively impact second year. expect losses, of be charge-offs to in

Moving to rate. the tax

points Our XX% current forecast half to our range. XX% to of the upper

well equity repurchases will end we of X remain amounts to common all top range evolving of for sheet with Synovus capital amid our balance our position past ratio is the opportunistic high capital needs strength clients to our we environments. manage to economic at share XX% our while Finally, a the positioned liquid we of over and ensure targeted quarters, strong taken is remains several of to economic the have XX.X%, from this and levels. of measured management Prudent landscape. operating priority the Through have actions Tier meet

our We And growing expansion this prepared concludes while bank of sources and and bank. the are now all on more the even the focused an delivery of relationships risk-resilient building revenue, operator, of improving through returns new remarks.

questions. the Let's call open for

Operator

[Operator from Thank the of you. Instructions] Markets. We'll Arfstrom question-and-answer from RBC is The begin Jon line the section. now first Capital question

Jon Arfstrom

do battleground Stock stock you positive the well? of if you little need a maybe quarter? trends core would do and areas, do better? Just on thoughts a going looks can to and of the you your of also I a a how little you emerging. in maybe been chance see How the Kevin, soft say a curious think I feedback see this get little bit it, it's me, bit, do to What -- Where some off But terms you curious puts your couple off in you to if think and try bit. start call. defend think is script okay to takes I fine the can. to is I a morning. others,

Kevin Blair

the mind. that's my what's look, love Jon, on Yes, question I I think because

You to when areas, the lot today, look we our at at our it comes credit. margin look a expectations of you look there. I really provided down meet information continue and and you income, Because X fee expenses exceed think we at and to

off deposits first margin. was So higher a function basis let's bit dig We're points quarter, little modeled. had what this on of that in and a is we and than that X largely

it, between we remixing. caused the some interest-bearing of and improve. some deposit include split those So to seen those And of expect DDA, that nonmaturity little when cost would as declines, we've think I could into weeds the done more noninterest-bearing as look this trends headwinds of because a at well the trends each some what those to on look margins but quarter, we spend around of around our was the the things evenly want don't that I already And it you abate. get as fairly our we've will increases CD rest trends the at I call, positive which

later, risk-weighted include not to we this would any us any any $XXX us remarks, trends year-end, but the optimization And repricing, And fixed margin That allow points to That place in the back of to some have part flat would both as asset said our obviously use there expand million these that then of quarter we capital are this prepared we some January. asset in expect right XX exercise. realize the Jamie changing. basis impact that back you'll be shared as potential And that things also from flat. in we hear will does of as getting of the that XX to rates. by assumes of by

contraction more down, was thought. we quarter So than

a have we similar talked about and back path in January. very one expansion to that's think I we what to

NPLs on declined including basis commensurate XX that this credit since points a in would Having also it been resolved NPLs, and our Now NPLs. front. have credit, this large one without charge-offs to increase and basis credit actually has in net quarter, this that month, stable our had represented credit charge-offs, of XX points will really credit very this credit result that ultimately that meaning in quarter, metrics resolved We our decline this that quarter. the impacted of

what's just I is maybe was And which half we most the to what important expect of our down and net end, upon our flat be in there the year based said the trends. metrics second portfolio to at charge-offs

probably we led be did that credits, in back similar did our given this similar one things industry some with right questioned what last Well, COVID. And hospitality of did and to multifamily what initiated around the to Now quarter, very year which totaled metrics. $XX the downgrade Office can a how of we X deep in that the of dive we a have through portfolio, entire some million. to we that

deep in XX that criticized So the increase and point classified represented our XX of dive basis ratio.

asset provision the seen given classes. on what valuation we've front, and across on Also, all

to of And quarter-on-quarter. the CRE defaults adjustment, to you portfolio any have sort perform $XX just This qualitative to account actually that very remind quarter, our we added our if adjustment I'll side. just higher on allowance we Without well. given that the allowance to declined continues default under see were million loss CRE for a of would

million only basis NPL And of We this NPL ratio $X quarter. XX have we of an had inflows points.

our and opportunities in areas couple top optimization, I those at our And outweigh your look I fee in X increased capital our improvement look some add the that, discipline then expense with to the asset and had like I at areas. of when in totality you about incremental for have risk-weighted stability forecast to the forecast of that I probably the income, our point, those that I when and and risk. So everything softness the on feel potential think from

Jon Arfstrom

the are those credit It's Yes, issues. margin. Good. Okay.

could follow-up, that, to Jamie, it, And what mentioned quickly, So optimization it I you but it, for Kevin could who you. when just do Kevin. appreciate RWA bless to for And how you the a needs much need free up? just think capital it happen? do do then or

Andrew Gregory

and Yes. of consuming a general is ROE our books. multiple Jon, aware, dollar for what on looking real for at view we the kind of put you're estate of been we years. lines, question. been thanks effort assets. return put And our into of Look, assets We've commitments for we've risk-weighted the that recently, risk-weighted lot C&I working a every on improving unfunded

XXXX. as Some strategy, of that go-to-market of these what inorganic business strategies, our strategies we the like as affect them affect do far we did of our some sale lines in

RWA risk exposures loans we're about order effort qualify be today term lender effort could we have in reduced relative impact risk categories the mortgage, a that XXX% weightings, to lending, largest loans. weighting the loan certain many multifamily eligible achieve reduced of within to for have including that risk government from this is cases to and to But is talking XX% today. But that securitization coming around down finance portfolio. treatment weighting, our in The

simplified in capital proper requirements supervisory under documentation regulatory have perform of the the to approach. We analysis formula light and

effort, as said ratios. on in the impact in the completed that prepared as we But it we so haven't could we be specific we unfortunately, And of meaningful. cannot details deck, the remarks, give show believe we capital

date, of be assets impact to points. or and the greater capital in think we be risk-weighted Given ratios completed could XX what more billion basis we've $X impact reduction than could the

And range. this end work higher to successfully our if the range. the given we and stay end at already where we're at of our of are higher is So that's target intent with we complete our capital,

the this either it's try any And and or of kind generated securities to capital, share when completed ratios repurchases levels. capital at so given capital repositioning we'll likely to maintain deploy from this our

billion. $X be, about billion is more around the The $X and probably or upside asked you about this what comment. say, feel we confident We could

it the further And we complete we do do along. to in once we'll and to report work but expect get term, have near that we so

Operator

of of question next The America. is Bank from Poonawala Ebrahim from the line

Ebrahim Poonawala

I following just on guess outlook. NII the and NIM up

So had around in expectation this low cuts your guidance. you always rate

in through we changed peers not what's of the Like you So market. the in your one on markets? seeing reported around And I'm yesterday the level a same your of peak what Can in pricing had think and talked around versus significant trying just deck? about pricing beta that NIB Southeast talk to the changed. competition Are deposit about pickup mix deposits the you visibility thing? the you in slide call out competition

Kevin Blair

for Ebrahim, deposits. everyone And new in as pricing past, abate. going an think is price is mean about the talked market don't attract I use industry, traditionally we we've as I to in the the to competition liquidity.

we a change there. haven't seen so And big

competitive also We data going that suggest of haven't any rates the seen higher. are

As a production basis we deposits, matter points. of actually fact, when about we this look declined at for our X new quarter

same same, the roughly in that has rates competitive position, in place. our us left the a kept we've and roughly so And

about quarter-on-quarter. up was production Our XX%

I suggest change big wouldn't competitive there's landscape. a So in the to you that

a just think for ourselves, haven't change to pricing we're it's win competitive, rate and But to but looking big I backdrop. really position the new always ways I ways not in deposits. very other with seen

bit about want to and we you Jamie, that? think how about talk little NIB

Andrew Gregory

we basis of margin the in points speak to first our And just cost obviously, me Yes. increase right? this deposit had quarter going outlook, XX first quarter point, expect because that is quarter. the Ebrahim, the quarter. given second second the let We to in abate the inflection to

through So of components. let's the kind go

of those the And on had in February increased costs. NIB expect positive. the saw non-interest growth a in And stabilization a the we March. portfolio, deposits, margin we but then are saw we And of that stabilization X, to there then January in trends. given in Slide in large and side compression And on think in bearing showed and attrition change quarter, the individually when interest-bearing continue the we as where amount was we you first driver NIB trends about liability declines the for

much we saw to in to Now we we of that, clear, NIB will decline But early what deposits as head a year-end. be be expect as percent pressure think we than moderate through that year. the total more

When markets the When deposits, average on money each think increases of December. in flat quarter NOW flat and When CDs. driven nonmaturity pressure market the was January. the interest-bearing market NOW you about of look at you since deposits first costs since by on us category at has NOW you the rate been money deposits, money for the accounts, accounts of average the rate been look has

seeing stability portfolios. in we're So these

do X.X% the -- in mean $X.X off And when time look quarter creep and production being right billion due the we was But Now time I have maturities time what deposits at the the to continue and deposits X.X%. and that at second of I'd up quarter, time deposits. of than our new renewed you in first on to rolling growth portfolio. higher rate rate deposits about the say is

renewed the quarter X.X% $X.X new So production was first we and for at going billion maturing and have on in our X.X%. new

So very similar.

the pressure to forward of going to -- just to reduced cost that interest-bearing deposits. we that's expect So going be

launching all benefit combination less liability confidence fees, the interest And a and quarter things half quarter of the margin along second reversals margin, the side point normalization of give is year. of on so those hedge loan us expansion of the of maturities, which in a for the the in the second with residual first

Ebrahim Poonawala

great color. just also. credit separately on And That's

imply within money build changed I'm worsening macro this the you seeing versus are signs credit conservative? being few today the reserve book putting to aside for you seeing what of in get sense we back just economy, view than trying some expected more of in little ago? essentially a portfolio you're your months bit a a built the Or today reserves. markets So that terms for is the Has in Jan?

Andrew Gregory

not. we No, are

when actually And quarter. in of and pushed improvement Kevin reduction can in about the see did you change you see as our think economy, that, And we seeing multifamily. dive earlier, the waterfall in that we're fact, the As that there. the the allowance, can a on performance outlook general macro in towards matter really was this general a allowance you the deep mentioned the

mentioned, Now quality in be seen of degradation just clear, we to haven't as a he the portfolio. that

But what with out we're based with is increased we seeing just occupancy, prudence. out have done there of office valuations, what on allowance the just

associated allowance an this And in you'll see increase increased XX in that, allowance due so you on in that move. the loan allowance CRE is the increase basis to see about based ratio We've points CRE to the with quarter.

performance of the the so more And -- than but environment that's portfolio. again, of the indicative

Ebrahim Poonawala

it. about the and dive, next lot any we weakness? Anything you through multifamily loans having that of downgraded Got loans. I'm X on that of work assuming And coming supply a on I you as downgraded kind the X? is deep kind all identified the or obviously over mean there's signs just chatter of year you for else, of

Robert Derrick

the Thanks Bob. it's Ebrahim, Yes. Yes. question. for

as as X it status Kevin rate to on classify a were relates mentioned, as just special Just coverage. stress those would to downgraded interest what we credits mention based

significant we don't there. getting just sponsors classification -- the had right. We sure see really great loss more content have any We making

supply multifamily. markets. housing of settling a Rent little to fair in for strong to these a multifamily And there the loss perspective cushion of terms years. we're now going that nothing our from there's projects equity is in of in -- still there few yes, relative special our projects. certainly, been content have increases demand housing is still outlook loans bit, to and these actually, constraints. a amount again, of but some tracking We any feel in and it certain pockets They're was single-family moved a there's relative lot for like, mention, are changed kind just again, X but in But issues

Kevin Blair

And more detail the where including give we you Slide very Ebrahim, is a the LTV, appendix little multifamily the reference student just ratios XX low performing portfolio, a that I'll X in at high very points. fact on basis only of again NPL level. entire XX% housing, it

migration. else? seen we've to Bob would deep look. done said, other if did question find that found dive, just anything risk we have the was, So your classes anything get else in you And Obviously, we had greater as asset

Operator

The of next is question the JPMorgan. from Alexopoulos you. Steven Thank line with

Steven Alexopoulos

start. I wanted to

levels. think outlook or based those second changing get adjusted range. expansion minute. growth still So on current year? we XX XX revenue Do bps one current does do it's still is out rates assuming the get to curious, the know you something see X NIM cuts this XXXX I in cuts? we looking if the the play at I'm we in did the curve this that would of from flat forward But are you And in by and range the And slide, half

Andrew Gregory

simple the your But and is we answer curve which changes rates all is, mean when we margin we well. to forward is we that as Yes. do say the we would why January the why what expect to our pressure. did to easing in an look -- there, point, during I flat time, guidance out gave to cycle, see

neutral the curve. of relatively front remain the We to

less But XXXX. easing with the in. we on we that we So cycle is be cycle, out do forward given once it come would we expect somewhere XX X question the your But be revenue, as and similar spot today to the the think to a the when going margin. deposit curve, on we at of basis would revenue impact points for expect between during where full curve, the to than forward were stabilize costs X% impact year

Steven Alexopoulos

it. Got Okay.

it did -- and would what the be. wouldn't NIM you'd So the below saying. you that Not that's of low cuts, you're end see get range if materially expansion be we

Andrew Gregory

range, than impact. less X% be gave would guidance impact. It be a of a X% it the would than the It Yes. to less end We but low depends.

Kevin Blair

just forecast. And baseline That's that's asset. risk-weighted again, before the on would based current anything do the we Steven, with

Steven Alexopoulos

thought And on credit that this it. out, C&I guys called I you of said then it large couple was you resolved. Got a times

Now does that you're does that go just also away Or associated recovery that What mean? on this with in mean that getting does XQ? it resolved mean maybe NPAs loan?

Robert Derrick

The quarter. was it's bankruptcy. through charge-off this the into Yes. Steven, obviously took second been NPL it's stayed Bob. and resolved We resolved. refinanced the quarter. But It

go So NPL should yes, that away.

Steven Alexopoulos

out. Got it. come It won't

big I And question. Okay. had then Kevin, picture a

think balance love your markets, right? because letter. I get enough I as I improve? expenses when about the growth report envious you markets investing you look really potential I flat mean we the annual tough. at very mantra, pace pretty I are markets. environment most your the of this of look why as this banks would But investments to So the And take expect about this be of in bank advantage environment to your improves, let's of And right, shareholder the your year, at grow revenue bringing where is when talk

to great Synovus growth you really footprint really with that's banks much a is than that when loan Because I'm that than worse growth do the different much honestly, start in. not we see you're have deliver commensurate wondering, just have. markets your

Kevin Blair

spend every scenes, team in We're wealth but spend Look, wrestle for Steven, are investing and area, of investments. that commercial enough. this It's technology. shareholder in we X we're much year, never it's leaning for in. with you we're still how terms our today our the value, question long-term private area. you And we do adding day Behind members at the in

a to You more. little always spend want

growth something increase for to as have. we very trying stewardship want to less investments adding that. And about we're presented to in by sure the to resource We look that grows, good or think revenue how of shareholders. leverage that's take a takes we to that to keep period. terms But for earn-back to it's We long positive regimen do. want going a for investment we're revenue invest at pay financial us look just as of a we as the spend. I back. make at we to we as approach whether technology, We much a continue doing new can And approach is level very operating it adding how

as in I more. and yes, us 'XX, couldn't you invest And see you'll improves more. So revenue with 'XX agree

We survey, at in -- as the J.D. a Greenwich our you opportunity demographic we've survey. not at just because real shifts said, you look of our have Power but look Southeast, the

should better the competitors. serve that of only clients higher in we growth our share And our get growth tell clients than Southeast, us them competitors. we benefit Our but that market not by of case, get from the taking the should we

to invest to provides use we're prudently. a expand continue margin revenue as want us more to calibrator how spend economy much we'll willing We to more on we money. as starts yes, spend do the growth, So growth as

side, we we And on I the in, areas growth lastly, in growing. our just think that loan are to loan continue slide, that see you'll the invest

we We in our for had loan as downplaying the rightsizing has fairly CRE But credits some we've are payoff a And been and up national as that we've time. well growth. big headwind to some annualized we've which on housing, because shared senior more been on balance that seen middle some market, activities us specialty. haven't seen constructive CIB allows sheet, activity XX% see

So higher growth than we you're and to would that are think start back as shared in that you I CRE. growth. that as growth, going and go national being normalized today a our get build again they add see When point to more strategic to ones to levels loan far higher on are pipeline to get housing, level we on credits senior and the you

Operator

next Mealor The from the with KBW. question Catherine of is line

Catherine Mealor

of you're environment NIM that bit to being guidance expenses revised end Is think to of And softer. fourth that quarter growth event? revenue quarter last about from kind fourth PPNR to XXXX XX% to really seeing where into in of range, and your about the a growth rate as Kevin, XX%. enough the and talked to little in rate is rate your is little what the that to 'XX like we a X% high-single-digit more eating Or feels get but going 'XX fees be NII rate? you lower a a to there about X% is quarter to PPNR inflecting, still

Kevin Blair

maybe working us of as they that little that revenue our of we to we're in sort were kind right decline the potentially of based quarter keep a levers bit expenses have PPNR the growth a Jamie increase now this into high-single-digit forecast. forecast to lot we're said, this margin And originally. going on front. would 'XX on forecasted allow This where on But delays

fourth point of to give X us optimization But maybe continue in conclusion this risk-weighted through to quarter quarter we basis update in forecast 'XX. time more some would it sort work asset point, on So this that increase to we this into to and quarter-over-quarter get the -- of as But this based as point, program. the decline your your margin, we'll year. delay

Catherine Mealor

higher when about And environment. longer That's helpful. It [indiscernible] makes sense. for then we as think

think points about, margin great to start when to start -- growth how see that cuts you disclosure the we talk You've that difference rate cut. the Jamie, about basis in discussions, XX given once you and changes what about to we as growth get X

cuts, cuts. is is that growth actually that guide to could to fair when say X% to X% we accelerate. Your without But it start get start that, to

kind we're if then at growth we range. that longer, the low stay higher And of for end of

the margin Just kind dynamics and about of between growth curious rate in the environment.

Andrew Gregory

would easing the loan to similar be that believe book. on growth do We

credit rate on credit have -- cut Like a it does a -- are We that the or impact the clients. disclosures mean, rate our we look the of believe when tightening. also marginal of our of have when of a -- modification. We we tremendous of our our kind profiles, sort of outlook hike good the have think indication to not there not impact those client I XX% only at FDM any and a look -- at marginal and rate does impact easing rate component

we don't there's in there to that credit And also, are so are big fee there's an easing impact. revenue. a environment, think positives But

fees, mortgage be banking the we And on so your to positive but fees, point, loan capital core side production, fees. loan believe market net to a to it that to also will

pressures, when revenue. you fee think to we would And it loan growth. across mix and be be it we think the so positive -- it income deposit look to ease We positive statement, there could think will

Catherine Mealor

makes That sense.

forward think rate all there's focus environment versus along on curve. it just to if the out. you the kind for year And higher cuts in half that's feels so of in I than we with about a the change longer we really the So like cuts. enough of X% thinking right, where see But start less we only much that back in lay you're the why margin, get NII

Andrew Gregory

right. That's

Operator

Tenner with The line next the D.A. from question Davidson. Gary is of

Gary Tenner

A any little surrounding that be industry just longer-term particular specific Or the C&I couple large maybe of that credit that that. more behind maybe company? out a credit a few terms issues times. just called on of in color of credit, a questions was struggling Can you you and kind some

Robert Derrick

behind materialize subordinated through bankruptcy we Yes, had it the concern on debt through. as credit. Thanks with reserves senior the another bankruptcy We working the It's for as lender Gary, would. well We sale a Worked well credit, fairly credit a Florida, reserved. involved were South the in an us. question. it's actually We as a thought Bob. didn't increased option aviation going lender that

And reserve when to we off, much took the amount. was equal charge the it pretty

think we through it exactly our an best the I and we a was sale, get we It to and happened, that's getting was equity taking option really nonetheless, -- sold resolved. from bankruptcy. perspective, right won't specific managed into charge refinanced a what But it it in up and that asset ended for it, get So number into, had the it but factors way. good of

does help? that So

Gary Tenner

cost has Appreciate just of expectation, terms then a on and flat the for in the quarter the NOW the March flagged when second essentially flat. was commentary the think total does. that. Jamie, quarter, flat in NIM And about market money quarter, accounts for given it deposits pricing been in first in trends you of Yes, the the I pretty

in your than CB and little comments NIM? Am repricing potentially based like I of other So bit on the upward those. interpreting It flat amount feels the conservative. is small of as of something I'm some a additional a the even mix on on kind missing push

Andrew Gregory

what the that's side on your a declines And we comments ongoing. on. and spot due the to is little costs funding bit No, see see pressure deposit we of are NIB

us in April seen turn anything from that. that haven't would Now we

April of would been are a In renewed on similar our a new date. to maturities as But to has as bit production rate. I little the fact, at see deposits. We pressure constructive mentioned, rate and expect time

expect to stability, on those we the where that's deposits. and So interest-bearing are we see non-maturity do as the -- side, deposit on said, I

is by be impacted not look lower those you when than first quarter reversals. then continued. being will at and fees it event first are think more of was And impacted a quarter that by loan margin, typical, we And the interest also

see to there flat there margin. the the components for those them. so we tailwinds for now, second our are in is And quarter, are but as But guidance individual the

Operator

next from line The Shaw is Jared of the question with Barclays.

Jared David Shaw

of retaining up following core the coming successful to you just customers the attracting more that is in a from you maybe Would market. the they're better competitive maybe you're overall? of commercial Or was losing noise asking guess, still some can on peers? When you're feel Maybe those you you they on market recently being Or Are about a comment, job question existing portfolios I strip most new like Steve customers? the bank customers? out of the little from bigger exiting. customers say little doing growth that now? And bit with do some the right

Kevin Blair

only customers, start absolutely. talent. winning winning with Not Yes, we

growth highlighted And so those that initiatives, market. middle strategic you areas we look at

win continuing Over Business from new to are last by from XX% bankers years, roughly as the institutions as the efforts. come increased and we've X those bankers they've business. our prospecting well just

so coming And new and growth loan deposit from clients. both side is new the market, that on middle in the and from talent

we've $XXX up We're quarter, FTEs. new growth another CIB the X XX have $XX in and clients of around this million On front, loan onboarded year. outstandings million this we to right

so existing relationships. from brand-new and that's And coming relationships expanding

as lender again, expanding new as well specialty services, area, our clients, for relationships. restaurant our existing lending Our finance both

we talent, of competitive winning folks. every situation, we the from only war taking in other are are So not winning clients

game. the that's So

get more As we in have opportunity. earlier, and marketplace. growth, We all fair of But rising great said than that want an think you you're tides missing then boats, raise share a we're I doing if to our in down. situations. pay that clients that those We're and many loans we're are areas deemphasizing off pay to running mean losing letting we're credit. Offsetting doesn't just and And those growth areas that certain in areas. down that

are super So excited. we

our basis there's a year be the which that get back of points. and us merger, the go Atlanta changes we out And big go footprint. in personnel We've some across of point, look, our basis of landscape Georgia MSA time market The all data last this, to markets continues in to allow and occur, been by points. banks, grew marketplaces. FDIC of about really talk the more always all metro Any you to it in to the if And talent your state opportunities. there's share these with competitive XXX there to XXX adding

get most real got shareholders' the our We've take got that grow that's message me, from pace got a we've for competitors. our to share we've to meets expectations. is so And talent. at to importantly, But

Jared David Shaw

great That's shifting then Okay. little just color. And maybe bit. a

XX health to I and the at X away with if office else over and of to from maturities? the expectation next XX what's years, what's those looking try Looking schedules retain at somewhere taken those of the able and being maturity the multifamily those, bank? Is to your loans be Slides appetite possible? out Or the, guess,

Robert Derrick

Jared, this is Bob.

and And relationship as Just to our our going retain to touch it first some and we're if loan again, it to to a priority with start item on And first priority. that work client, is work client. clients. is we're well. can foremost and with that on to doing But and our Kevin's matures Jamie business that's point, the certainly,

through mentioned lot markets don't of But non-relationship, some, on to that a much what selection. cap exit maturities, but bit. a comes like think stress have look the or cetera. analysis of move balance it's look may We capital transactional rates, clients a choose down it client sheet certainly his piece do if comments that really as done maturities. We've to the testing environment can relative does and got what little rate like et good we've these Now around in to and that have the get we We business, of Kevin that, remixing refinanced. we

okay without, events. our consider our So maturity to significant about would we credit schedule I feel ability be through move what to

that's relates to your to stressed multifamily particularly and there, of about point, little but last a that loans good there sitting Now in stress we feel that's are our perspective, a valuations the be maybe will at relative it, where of to because it we're cycle. have up our rated, make relatively always over little quarter will majority enormously, currently around office, more book from as a be is book we has kind XX%, we of in and some analyzed that office and number. to stable and X been XX% there But

well. So backfill, the we wall assuming that we those get through can kind of work office can X and we kind maturity don't through of as

confident pretty feeling it. our we're through about to ability manage So

Kevin Blair

And you each XX% to is when little think different, but that class, in only multifamily asset I'd almost our that thing of Bob, they're is the a about add construction.

financing. financer generally completed, on So are to a those. they'll for when long-term permanent not permanent those go We're

sales as from quarters last healthy well refinancing And agencies. both level churn. through will there the what fairly a in payoff and so activities, as be of And a kind natural paydown a we've seen just the some X is of of

developments so go to And more Those up, and Bob's want think new into construction I we're markets able lend more are want it's to behind backfill we'll clients to to constructive the those those going with will continue into. to be and a CRE keep opening the that. we financing, classes point, that new we going permanent that the and And part environment. is to keep projects to be much asset important then

Operator

Rose from line the Raymond question next is The Michael you. of Thank with James.

Michael Rose

the helpful. you arrived just give that color those? and assumptions some was some XX, I hopeful Jamie, us maybe That of down you on on can at beta Slide around be way would your how

Andrew Gregory

Yes, Michael.

pretty do how included and discussed portfolio, level ago give is high environment. at you As repricing is what our similar why really actually this easing an betas, look we at a we about clarity about think in slide deposits it's when we some think that few months to we of to a

you the portion And noninterest-bearing. -- that's a portfolio so -- have of have you obviously,

maturities. a little and have at and expect a do see standard portion We with you deposits beta just the beta. And reprice of to really are brokered. those, high on time time, portfolio those very brokered and it's more you get either high then half depend the will systematic. of of time the a the book beta, high that's Then But deposit beta. the that Same or half is into will low portfolio,

have didn't to them as the down standard the they're much cycle, beta rates a so their so expect XX% to as cycle. much Those are why standard up because portfolio. the but the of we easing easier beta and there. lower reprice don't in largely we lower And tightening around is in That's go rates, go

And book, the then exceptions XX% the we to deposit higher beta. higher at the a in decline on see expect beta, of do those

You conversations the can reprice. some those will slide. take see -- be slower our in part, bit assumptions on little a But to there will likely those

plans Now have for we of all this.

environment. up even We're to really get it will on have go, the ready we set the us. though is that timing There a It like timing of of looks competitive that's go different it factors to the depends into how landscape. So the on are it it. up. lot delayed. continues to depends But It

Michael Rose

regulatory as then aspect. And just Very kind a from of a follow-up helpful. maybe a

billion. some NYCB what the kind that CETX the ratio banks AOCI about of when are contemplating rules kind happened of down pushed like some of kind of with of bank impact $XXX point? of just what after fear the at think to what some sub I Can bank you to bigger looks the similar talk there's this get kind including could larger

Andrew Gregory

Yes.

when side, at fine we of And that, inclusive capital X.X%. the that. we On feel CETX our AOCI about look is

will AOCI, over at XX% accrete ratios, will year. the AOCI we including believe next accretion that the manageable. think of AOCI look of the we in they're think happen our As We by end time. about capital back We

on we And ratios, risk-weighted capital ratios. that expected asset mentioned to capital we So improve that's where stand. this currently is work

X line ratios. interesting, what But necessarily when we on context in an Cat we the of haven't the get you in banks question not like when exactly because we inclusive would CETX because this already but impact capital to that it your the would it's AOCI of take is determined finish it's repositioning interesting securities

our that's of as when the get considerations and our is are the so we we what one it about think finish the That above or do within target line, considerations. to one like? does about we we it? do look of range what Where target And

Operator

the question is from of from Scouten next line Sandler. The Stephen Piper

Stephen Scouten

talk certain I the Can like guess I had mix certain moving about was that bit deposits than is mentioned geographies, from Or was? noninterest-bearing a kind versus maybe parts it rural that little of segments, curious, was more you Kevin, probably about more you of were that pressured Or expected. wholesale? you incremental what pressure still? away

Kevin Blair

it's then rates, at from it's CD mean on increased first seeing front. noninterest-bearing is Well, the away I when expenses the look or But you both. we're mix the increased primary that the reason thing.

the more And that, balances issue. move remixing, bigger has so CDs, is part that been of as the that into the rate it has overall just actual portfolio on impact on the portfolio

in point down or now As and market have rates the like individual actually look categories tick those some money basis Jamie cases, mentioned, a when and peaked we at X.

those landscape. into in it with earlier, high just really the do has to more remixing question the very as have competitive And So the rates, stayed CDs.

So to our keep higher had as rates well. we've

duration We to have there. tried shorten the

terms months. X rate odd is Our

So were we're the that's more months, remixing really but happening deposits opportunity to decline there. XX those were have to due rates they much going than the if to reprice to if it's quickly more

Andrew Gregory

data give one point. let me more And Stephen, you

deposits. growth outflows being Community our the look deeper, when the look of in significant We with saw one layer think those Bank, you a core which that within we clients. But clients. As about our can larger were the transactional in -- saw first growth lot kind of you you deposit quarter

And were the so XX% on Bank, NOW accounts up in quarter-on-quarter. they Community

they at market quarter-on-quarter. look money accounts, you were X% If up

clients. growth strong core type So And the through help XXXX. our that's and trends those we want -- are we lean of that's with go that feed as to into

Stephen Scouten

in Yes. kind on then with basis. in the encapsulating the a million appreciate the economic that. That's your you a in Is from various one $XX like an show reserve scenario? what Slide important -- change distinction. clarifying just talked weightings the about XX And towards move question qualitative of I that on you the

Andrew Gregory

No, that's economic and than the that's would component separate. portfolio That the in outlook. be of separate that,

Operator

with the Stanley. from of is Morgan question line Manan next Gosalia The

Unknown Analyst

This your you industry charged balances is back credit. C&I weaker with few off [indiscernible] seeing loan that filling there going in for this from quarter. The aside this if And Manan. of I was an nonperforming that of are wondering if I you you're talk could ask from perspective? breakdown credit one a C&I any to because broad quarter. your wondering themes peers have cited I'm about

Robert Derrick

credit just one no say Yes. I'll Brian, at look nonaccrual broad Certainly, it's ratio, side Bob. and if I the this for themes. would you set discussion. our

drop would down of C&I. give take, us $X that XX% million of is it So million $XXX to about nonaccruals, or around

credits of we've there. have think or reserves -- appropriate marked on no So in C&I where but in them and either those is we credits already specific the industries Most specific process. to those exit is

But to a of portfolio more C&I heavily number yes, the nonaccrual would credits. today. it's manageable perspective, So from our weighted be

XX and relates number put a those on $X pencil resolution can We it above plan. a credits pretty we million, of to as good have

quantifiable when see what number. start in So down, light. but of got new very is terms And think C&I it inflows a is you more we've we heavy, importantly, very it willing we

been the And some about think the a -- is little be space. going more to be There's then So idiosyncratic. to but corporate C&I piece going -- think continue when the we be other way to that's of we increases, the stabilize. our to a of components sort housing got labor there beginning at overall look portfolio. it's the in cost because it's the rated We've and through senior you pandemic component

So be of positive. that a would more

significant think office then potential to mentioned, of and just done new deep when about we've we be of it third earlier, around rated. specifically dives the any Kevin drill would CRE concern us that XX% And And into those the I as numbers, backlog as piece. multifamily, mentioned And portfolio is related office. there would our on And we're problems. finally, be give I don't office that's a

So back think as of as earlier, loans, guiding we that begin through charge-off that can those take and really we mentioned toward that that don't economic half 'XX, kind and that what's work will assuming our remain charge-off our year, see of is that doesn't see numbers certainly Kevin the those to categories improved framework And of guide, in of time. analysis we kind office rate reveal into the of a in we any environment surprises. environment But today. we're that we kind

Unknown Analyst

of I so, few wondering to sensitivity do that I end in you material benefit playing then unpack the out we've the how as you the weeks? a get the end if Do over if your yield the color. And of increase a the appreciate you And was XXXX. just the from seen rate XX-year through see long past follow-up, could curve. that

Andrew Gregory

We sensitive to asset continue the curve. the to long of be end

end to we've in So the similar the a increase conference a the that fourth where basis the of of the you when approximately announcement, change we due had X%. rates indication the point before roll quarter asset margin curve. in difference the rates. a to to to in December long that the in from That's is X expectation It's good us. sensitivity January spoke to beneficial forward conversations earnings It's

Unknown Analyst

have due that -- coming Do much fixed would you repricing. that's Okay. quarters? primarily primarily I rate next any on color the imagine is from over is on X how And from

Andrew Gregory

have the a about paydowns. $XX on portfolio, So million month we securities in

flow, And steady steady so a just that's repricing.

on our billion accretion. the then It's paying that book $X year. see about mortgage of that's securities at have You portfolio. that XX% yield a -- And we portfolio down part a about is

Operator

the of Timur Braziler next have We Wells from line from Fargo. question the

Timur Braziler

brokered like as can And maybe your we to seems for just the what liquidity throughout get thoughts just you course year? fast look deposit appetite been deposits appetite cadence just we growing? like the the at an there's give balance Maybe of ability not they've broader some use deposit of then there, deposits of your Maybe look growth, then cadence sheet it declines expect as XX% some time time brokered the your [indiscernible] the update us on grow time paydowns deposits. to as maybe the and about balance sheet and for

Andrew Gregory

decline $XXX per right. million to expect do that. those to the we million brokered, On safe time On see $XXX year. exactly to deposits, through use questions. to as go continue great we quarter for It's you're Timur, Yes.

funding, wholesale year-over-year. over First, we're in if you funding down wholesale look XX% at

of gives economical so to liquidity flexibility a the to way side. lot bank. And that on fund the choose most the

time Now part that with to client of deposits, demand. is regards

so have deposits. on their where time deposits. for clients lot what are they're react And to attraction to looking to And a on there's we of

for slow And bank incremental in there we to is or use We we decline brokered. the get loan we with you're pressure avenues And -- right, need for be so deposits. rate. down simply a liquidity them the competitive have given grow But could could not we can time we to there home the all liquidity. could

core relatively We expect deposits in the stable year, then expect the second half of see to the to and the of do we growth in be year. first half

continue be But piece looking the will to on the it we profitability how so today. analyze that's and we're And and at demand of that. balanced client

Timur Braziler

that portfolio, of book loans within leverage then you commercial and specifically, that C&I in are finance other that to as more to what C&I using then make Can insurance [indiscernible] are component those loan And loans. the to of update companies. borrowers Okay. as entails? what loans are us that to the just an And give

Kevin Blair

quality, about portfolios as you those to that's our the the is Jamie risk-weighted lender treatment. reduced maybe some earlier, business. portfolio the talked looking give we're comfort at Look, around -- finance get And the asset to are asset

a as the there's sponsorship, means risk XX% good there's potentially down weighting good So on mentioned, XXX% that risk-weighted which assets. to treatment Jamie coverage

to assets. levered provide liquidate ability within And These point, repayment those to are your these the are assets. asset-based that not structures

se. So levered well it's asset risk-weighted structured. based It's asset actual a for qualify portfolio may treatment. not It's and lower ultimately per

Operator

with question of next from line the have Gunther Stephens. We Russell the

Russell Elliott Gunther

Just couple follow-ups. quick of a

The first growth. on

you get the we say would in magnitude be in back loans? Just the line decline in the earlier. what but guide, and time understand this helpful abate included nonrelationship kind to a to were of for get impact discussing were wanted sense it get sense I to a and for terms of to headwind that inning or growth is the you'd in, of strategic outlook of that

Kevin Blair

third when securities will in million excess $XX the party the those declines that SNC of at one, portfolio about quarter, look, another portfolio, look we when Well, continue for the Number liquidity. for were had of foreseeable these we had the both remember you future. in million $XX surrogates

unless rate expect in better we of economics seeing so environment, And this sort continue. would run are we that to

So each of $XXX around quarter. million expect runoff to somewhere $XXX million

not would that So change.

get news could good as the some of to market-related is offset declines. these that Now be than we more

I once declines, offset So their to more growth declines the than gets size portfolio the back the would towards senior those offset than activities, pipeline of more think strategic put kind the growth more housing offset paydown some and mid-single-digit there or back of real to estate portfolio that final which builds market-related will of that these level. their

Russell Elliott Gunther

great. That's

as and Can Okay. just year-over-year switching to I in capital you markets that contribute appreciate just the GreenSky for guide. fee growth the then there. And then guys expectation well, And confidence the year? gears onto outlook there? that remind drivers just rate this us

Andrew Gregory

that. we at than associated will forward, out the We first played strong revenue with going revenue a had look on for quarter, quarter the you less -- We-if a GreenSky, expected. as million little reason it the of $X change. And

it's we a quarter, flow forward, in so in And arrangement. quarter but in going first of So the arrangement, actually think loan first we revenues area, area the if that closed quarter, below similar through deal you pass-through we about go book. a XXXX. similar the had slightly it, be a in But expect as the flow to per the

We the for in And through as XXXX. the good at capital -- markets, and will overall year. And We digits. markets. With to we growth first continue there about going see we in XXXX. and markets, off a the low we go those go swaps, that as to we moment, markets which of think we good expect think low- the of one that we fees, the components we think to agency capital lead-arranger really to is coming go see but that's mid-single it's quarter lot expect that client this be of And we NIR said the growth of to the capital fees year. strength as to relatively have through When drivers. strong feel capital through we regards increasing a year going be are

Kevin Blair

our pipeline in to the are been And largest they've today. your our those in pipeline Jamie's are and in some point, And conviction, CIB to wholesale time.

actually And we to just able we'll see transactions be the forecasting, it's on. execute so that not

Operator

Marinac the line Christopher have We Scott. the Janney question next Montgomery of from with

Christopher Marinac

Just a quick question for Bob.

office? with tied pertains maturities. to back it those in that office the Is As Are the medical of number? any to blended

Robert Derrick

office million yes, of is And book. million, total this the component in. or blended Chris, is the That's me, medical take, total excuse $XXX then office $X about give our book.

Christopher Marinac

by was we the saying result, that I on adjust maturities So can so. that, proportionately

Robert Derrick

of institutional No, did office building. does I'm the not sorry, That office the medical portfolio. asset on million Chris. There's office in $XXX include about sale we loans medical our current

$XXX community today. -- that speaking, office So medical we in offices banking, our million of office brought still have mainly about are portfolio

Christopher Marinac

Bob, it in office? the are And as component? on seeing to that reflected pertains has service Or you stress ratios largely further coverage been criticized Great. debt any

Robert Derrick

Obviously, perspective, service are But debt ready more current but be reflected in it XX% of them -- in, some of XX from status would it's and coverage our we negative valuation we're a good bias reflected, there's around a Chris. on changes, It's still -- and been feel I migrating, certainly still the certainly to you've mean we got others. markets slight the certainly book. about office. largely than stressed rather rated

of lease So we're out the maturities day those lease activities, these and expirations obviously, and doing types et looking our and cetera. things to every rollovers roll when what over sublease analyzing are leases those and of

of business which office good right a analysis, feel into and activities accuracy our current portfolio we of kind of today usual the So in about of our normal sort is risk those now. in lot built management variables as it's and reflected our ratings,

Operator

The question King next Securities. of is with Truist Brandon from line the

Brandon King

your interest the Two-part year. quarter in third points XX question the net basis on expecting half this How fourth much And versus that margin could XX are occur of of you in schedule looking the to second quarter? expansion, repricing fixed that of going even is to just be second loan question the that then at pace rate beyond forward? could part a looking certain we is, Or more expect [indiscernible]? that,

Andrew Gregory

in is Yes, of important And in the the in great time year a expansion Brandon, hedge an see quarter. fourth expansion late that largely to question. expect maturities second largely do the to half due some We the year. that for it's

be impactful in low maturities million first the $XXX the have the We and in fourth quarter both to those quarter of rates, hedge again XXXX. and will incrementally quarter fourth at pretty to then

about We first, would term margin, those first longer about is: side. I on the in saw think what you say liability the the when quarter. think think clearly headwinds I our

both to expect mitigated we in the be stabilization as those in second We quarter mix. and see rate

the the And think so look you benefit about at margin of then you fixed asset rate and repricing. the

And so It's a that really becomes benefit. powerful. multiyear

stay will And about stable. that see continue relatively through so that but past, we've in the And assuming flow XXXX, talked that you're we'll to benefit. if rates benefit

to of rate I fourth this fourth the when repricing. a at longer term look XX so I fixed to about due quarter XXXX, year, and basis of benefit there point and compare look I it is And asset the quarter

variables of pretty that's rate And can to there outside tailwind that lot of But margin. a that fixed are important those impact the a benefits. repricing

due on I the asset as fixed just rate And clear margin year, just so expansion be that really to but continue wanted next yes, But one. that get we into expect to we to repricing.

Brandon King

buying back RWA Okay. on you with about capital Very generated that once shares? basically deploying potentially that's versus optimization, more the then And complete, securities how are thinking helpful. into lastly, positioning

Andrew Gregory

at we're also that of look the on everything we'll at and something sure lift we it's and to it's question, X to the Cat great because way documentation about that it, because that a That's and the right. that done ratios at want regulators And as AOCI that, where once way currently make matters capital we pretty a the is complete looking well. we're our But decisions that are through. think analysis is capital we our make the be Yes. hefty working think banks thinking get we and we've that to inclusive ratios, and looking

play And so it we we of to we repositioning, expect, in to repurchases, it, deploy to share large but but target CETX end to our things how of portion of of be we want XX% the a out try like securities would to balanced stay expect really deploy just at range XX.X%. deploy some it to assuming high

to more so And on come that.

You be that everybody soon can locked we let as everything we have we sure term, as near which the down, know. in will expect

Operator

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

Kevin Blair

Synovus. and and I'd and you, to listening today Thank being team who attendance interest your are everyone our continued like appreciate today. thank Angela, of I in all also members in recognize in

we our are, differentiate daily from result our a serve of and direct presented them Our financial as morning, clients do to are this to us what results competitors. you

for quarter first the into expansion that this to we year reflect believe will and Our results come. in the the contraction margin, reverse

income fee Our have expectations risen.

well managed. are expenses being Our

to but shoots. even standpoint, the today, business And shared front, is as lots credit for an allowance activity our lower charge-offs overall the we've build from is some outlook seeing the as we're metrics, we green summary On of stable higher.

Our loan a are our increase activities segments pipelines client are bit, and across starting sales to picking up.

and recent profitable quarters, our shared approach on our and we've serving advising is deliver prudent growth. trusted valued to in and to leveraging deepen As focus and relationships strategic our clients

economic and into profile. returns an which equally navigate we uncertain risk-resilient translates more As are environment, we balance on well in strengthening interest rate a turn as as focused our our sheet,

we year have growth throughout momentum to build even and the more that progress believe upon bank consistent a to will the into remainder diversified truly XXXX, I and this and our return and of continue we orientation.

we you upcoming operator, and Thanks in and our the June, any ready our of forward in concludes questions. May to address XXXX call. and your all many earnings to conferences quarter first of stand we seeing look that For investors, to now,

Operator

Kevin. joining. you, today's Thank concludes Thank This call. for you

now disconnect may the You lines.

Synovus Financial (SNV) 18 Apr 242024 Q1 Earnings call transcript