SNV - Earnings call transcript Q4 2024 | Synovus Financial Corp.

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Operator

Good morning, and welcome to the Synovus Fourth Quarter 2024 Earnings Call. [Operator Instructions] I'll now turn the call over to Jennifer Demba, Senior Director, Investor Relations. Please go ahead.

Jennifer Demba

Thank you, and good morning.

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

Our comments statements. include forward-looking

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

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

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

Kevin Blair

were Jennifer. from quarter and Synovus year Last results. night, you, which Thank up to $X.XX, we quarter XX,XXXth release full previous quarter. of was fourth strong reported pleased EPS the X%

Excluding assessment, year-over-year. quarter fourth special adjusted EPS XX% rose FDIC the

EPS XXXX, $X.XX. $X.XX, was while was EPS adjusted For

The exceptional XXXX clients, to year was members growth, team value shareholders. and our and delivery healthy effective focused collaboration a of of

corporate the past higher-growth commercial continue solid lending segments, strategies Over well investment balances includes and our and in and beyond. market, grew banking X% XXXX outlined executed year, Last XXXX the and momentum, in late Synovus in specialty we should on demonstrated which year, lending. middle we which

these broad-based activity. significant in to payoffs production we market While by had XXXX loan segments, they impacted in were strong due

deposit vertical launched and product We industry and legal bundle. by also banking grew X% deposits new core small business a

fees pace. approach, our relationship we and capital treasury and sustainable As healthy markets a grew a result at management, banking of wealth

XX.XX%. XXXX the adjusted of expense time, adjusted noninterest X% with in operating to control efficiency continue and ratio disciplined an At declining exercise cost same we

XX points Our and Tier to X loan increased equity the year-over-year common ratio basis losses improved XX.XX%. preliminary

adjusted with and tangible of profitability return X.XX% on on average strong equity adjusted had metrics return we Finally, common XX.XX%. assets of

fourth highlights financial Now let's the to the for quarter. move

The growth, Also, in quarter the higher. end expansion cost range, interest income move charge-offs growth interest of revenue. noninterest highlights were fourth improvement net of quarter-over-quarter margin at while most deposits, ratios in the lower in our net notable and the continue net included capital expected continued significant to

Adjusted revenue but income. from a and deposit commercial interest line drop of and sequential loan loan Lower quarter-over-quarter year-over-year utilization maturities X% and X% increased and remained production drove on strategic a period funding in declined payoffs loan loans rationalization. basis. costs hedge growth strong, elevated in levels non-relationship average end and net Funded further loan

was and market well Healthy public supported commercial operating as fund business core core line. by growth deposit deposits seasonality growth in our across as money

funding more lower product accelerating Adjusted quarter increased noninterest sponsorship remain prior management revenue. mortgage focused wealth capital Our sales such income and stronger industry core commercial the new legal activity expansion, core revenue as and on banking, X% the markets and than team members as through generation lending deposit offset vertical. from

from diligence long-term X% strategic making have down Ongoing that and XX% overall initiatives cost quarter Synovus have investments the up expense Adjusted position we continued continued value. At third growth. was noninterest to time, same expense drive and the contained year-over-year. shareholder

in as XXXX. points compared the points On XX basis were in XX third the to front, basis XX charge-offs quarter asset net and quality expected, points basis

repurchases. million common of bolstered executing ratio share about fourth equity Lastly, accretion $XX our in through we further the earnings solid X quarter while Tier

his years to I want it contributions at more XX this Before Chief to Officer, significant Credit acknowledge Synovus. turn Jamie, Bob to over I over Derrick, company than

well X the he in years, before his over a been tremendous wish has leader one final end his is of past credit him organization Bob call earnings retirement. retires the Today's at and March. we

Jamie review fourth in Jamie? greater detail. will quarter Now our results

Andrew Gregory

Thank you, Kevin.

period-end sequentially the facilities X% challenging As $XXX primarily quarter-over-quarter see from balances the fourth resulted larger Slide Lower commercial environment quarter in or million corporate $XXX was fourth ended down quarter. utilization, down particularly X, year-over-year. million and in loan The line you on X% can loan growth a headwind.

the were of there remained fourth loan the $X.X year. these about billion of which from third months, rose Also, over quarter, strongest robust the in impacted X% Despite headwinds, production C&I lending the funded which the commitment past our higher-growth quarter, while payoffs production X verticals. was period strong

environment by headwinds and lending was balance optimization. in The market impacted XXXX sheet significantly

verticals However, in we support strategic non-core and repositioning are pleased portfolios expanding the in growth made XXXX. to Synovus and progress with

deposit X% or Slide to fourth to of from contributed XX% the public during quarter. up as million, growth billion Core Turning funds third X. sequentially balances quarter $XXX grew the seasonality $X.X

by Core deposits. interest-bearing deposits, in was excluding were decline the deposits increased fonts, and million X% There increase up in demand $XXX in time a money year-over-year. sequential X% offset public were quarter a market which funds, X% partially combined, and

in fourth stable were deposits noninterest-bearing the Importantly, quarter.

commercial core nonpublic the drivers Our funds were group. lines deposit business of primary our

by brokered Our strong fourth $XXX further us allowed quarter core deposit deposits million. to growth reduce

our ratio compared ago the in and As year funding further XX.X% wholesale period. improved a to result, XX% is now

our X.XX% look changing we rate deposits deposit third quarter. costs with quarter-over-quarter beta an in from manage reflects intentional approximate X.XX% meet fourth points funding cost our repricing the our efforts As XX quarter at of costs, That in declined average to aligns environment. to basis and XX% to the the

prior quarter, income X% $XXX in Now a the Net interest was moving Slide from million to the increase X. quarter. fourth

by and Our a came There was points. net as in prices. which million fourth higher $XXX also NIM Conversely, of the quarter, was management a maturities fourth and position X.XX% deposit for our benefited quarter interest our adjustment in by nonrecurring quarter. basis cash X the at issuance margin in interest effective The headwinds. X the earlier supported increase the point favorable debt basis hedge served

stable, to margin nonrecurring exclusive half relatively items. the first is look fourth in the the we of expect which XXXX, the quarter of be As we to mid-XXXs

of expansion half fixed second asset pace Our rate and continued rate guidance environment. of XXXX the more in modestly a repricing on steady NIM assumes a consistent

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

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

We areas by management, produce such as growth solid to services driven continue revenue markets, key commercial treasury noninterest consistent wealth capital in and sponsorship.

wealth Slide core X and in total of adjusted offset commercial X% drop revenue $XXX capital which revenue was management the sponsorship and and a more markets million. period. year noninterest in $XXX Sequential growth fees markets the lower million in commercial income. year-over-year seasonally fees shows quarter-over-quarter. wealth reported banking by was partially ago Adjusted elevated X% of as offset in growth up by revenue income capital was declined than noninterest mortgage banking, sponsorship and noninterest services

fees relationship increases our increased fully sponsorship grew and markets management sponsorship healthy new treasury fees XXXX, revenue. in Also, XX%, capital saw commercial onboarded XX%. fees GreenSky jumped while in In as we XXXX XX% other

relationships continue the shown few will growth to We past core years. noninterest over our in and invest deepen have revenue that steady client streams

technology by which Moving was Slide XX highlights higher XX% our operating $XXX from quarter, and the quarter, FDIC impacted noninterest expense. year-over-year. noninterest prior and Adjusted X% the to continued fourth expense initiatives. personnel costs, increased premiums expense in Reported down cost million was discipline. adjusted

our well contributions quarter. increased as charitable fund adviser in from third an increase $X.X as Also, donor the million

assessment, FDIC special X% in noninterest XXXX. expense rose the adjusted Excluding

year primarily last to and infrastructure growth X% declined headcount credit-related legal incentive higher due investments. fraud-related payments, technology-related and losses was improved, fees While

enhancements. various Importantly, have into product years, in significant frontline over efficiencies we decline and reinvested back-office X an been the talent headcount, past have realized XX% through which

driven As strategic at in by growth we outlined an investments. expense normalize conference December, in XXXX our industry operating range should

These relationship and investments and long-term middle include manager our that expanding performance. commercial and critical infrastructure-related market are initiatives sustained to wealth other teams growth

on credit quality. XX Slide to Moving

were quarter lower fell XX our basis which charge-offs net points. $XX XX expected the basis range or Our XX to million end of of fourth points,

losses of X.XX% primarily third by in $X relatively total which rose from the production, were loans duration for elevated allowance increase increased credit loans credit to portfolio. third strong the million the Nonperforming $XXX flat total payoffs, quarter. to provision by or losses for X.XX% fourth impacted The of The approximately compared X.XX% the loan quarter. loans. The offset million to partially quarter was of due at

be in first of net to the half XXXX. expect to to points XX continue We XX basis charge-offs

fourth preliminary total and As seen position XX points the now improved during XX.XX% preliminary basis capital capital the with common reaching XX.X%. XX, quarter our on risk-based Slide ratio X at Tier equity

about Our profile with core fourth earnings continues share our to the position, $XX quarter. million capital completed in repurchases even support of

$XXX by capital basis by and XX our XXXX, of Healthy inclusive repurchases. for of asset points, was the we share freed second repositioning supplemented earnings In quarter, common buyback. in million optimization which exercise accretion a stock CETX risk-weighted preliminary up securities ratio increased

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

Kevin Blair

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

Our the as as goal progresses is the sheet and our and balance the more certainty growth is economic of to on of the year timing underlying pace strategic well investments. as range tighten planned guidance there

confirmed we this continues growth improve and X% our and commercial Also, banking XXXX. to with survey pipeline post business in which success be year. driven and increases market, growth investment will to lending that primarily loan be election, sentiment specialty experienced corporate is our to expected in anticipated client will quarter prior likely demand. the and loan Growth ongoing XX% X% have boost Period-end In middle fourth quarters, production. committed in by XX% lines between loan

on market-related will growth relationship our competitive of X% relationships a payoffs that Federal continue expect XXXX. hires well in from in in additions. rationalization core deposit new as the production, policy of of diminishment as manager landscape will and Furthermore, growth to around as decline activity core to that our the bear XXXX. verticals focus supported monetary of and deposit well we previous expansion be This pace non-relationship fruit We have despite for a and loan we Reserve maintain confidence as should XXXX expectations success by slowing deposit loan uncertainty continued planned X%,

a to recent growth funds yield which levels. remains the revenue target treasury The assumes Fed X% the and declines adjusted be stable X% range to XX-year of X%, to to relatively continues rate

by expect rate the in range NIM asset lag in repricing. as fixed short-term will of offset lead to early mid-XXX is We tailwind the XXXX the impact due be headwind the

consumer payment income We well our wealth lead believe easing to as fee million areas sustained and such payments solutions is short-term once $XXX of refinement execution year. to in margin markets as our the Over delivery neutral million concludes. solid models of expansion rates, medium and noninterest this adjusted services the support revenue banking, balance sheet which We and momentum. will to capital our core the treasury third-party cycle remains continued and term, anticipate to as expected relatively $XXX interest

initiatives, areas which hiring several disciplined expected a Adjusted of will teams. expense is increase market should and middle continue to renew to that noninterest a expense our while producer that be include commercial investing value. we to in X% shareholder X% from management long-term very said, deliver grow combination wealth in That program

On the first the in that quality in we basis XX half the of XX to anticipate range credit charge-offs front, should point net remain XXXX.

given X years. is As stated previously, problem in we it to than lower over have was loss default expected credits on last several periods be current our the

we target relatively April, CETX quarterly $X.XX. capital, to increase in stable our Moving will will dividend common ratio. a to equity Beginning

on loan growth. priority deployment Our capital client remains

repurchases However, to generation objectives. our to balance to capital achieve share we organic capital do leverage overall expect out

multiple the scenarios. program that flexibility us $XXX repurchase share XXXX, a Board in manage million to authorized gives common capital For

XX% additional relative over the positioned quartile model we the have our years company and investments. footprint rate the XXXX by book growth economic value the strategic well as earnings our of actions Synovus' metrics. our and as revenue, operating X Finally, business and approximate should of credit for and past top anticipate largely long-term growth tax strong tangible tax strength in supported

greatest clear We now, team. right for let's winning we we and confident actions And the questions. being as focused on opportunities in are the open a collective operator, have take win, and where call to the

Operator

RBC. comes question from [Operator today for Instructions] John from Arfstrom first Our

now is line Please go ahead. Your open.

Jon Arfstrom

a more can about talk the expectations. Kevin, you growth little loan bit

take or but headwinds, what feels over, your borrowers? are hearing then better at the looks put from at on You lower higher you production I'd as that. you've well. or thoughts the the seen flagged of end the the you're like the curious It Curious range. keep could end what like end it just but some higher of the you what And

Kevin Blair

a you activity would election, quarter we in optimistic in consider very And as we your fairly for appreciate sentiment. we And commercial I business saw client Look, prospects to returning to expect, completed really I with just a sizable for increase Jon, optimism, client I'm do. about post our it normalized more starts expectations be growth 'XX. what the survey. fourth in our environment

anticipatory starting that, shoots amongst that in pipelines. and to is Now in see across and several footprint And but our largely optimism you that see various I our green we production know think some secondly, we're areas industries.

We in We that committed expect much the our was the and in quarters. the XX% fourth in our C&I to saw CRE and past build roughly production production it highest year trough X XXXX. so in that to increase production continued so level first this Jon, quarter, we've in both seen quarter

So continuing is that momentum build. production to

Fourthly, roughly year, XX% new and throughout you over our will that more optimizing XX and last resources years. relationships XXXX added and as balance continue been which sheet. resources over in the to Thirdly, the X line. those mature more we bring we have sheet we've bankers, business and that increase been middle-market balance a grow Last know, adding is they'll

In various syndicated our but aviation, X senior in XXXX, housing, complete. reduced That's largely were in exposure classes, 'XX, combined those $X proactively asset billion runoff. portfolio, sold we a we lending, to about

And headwind. that look going into to the future, you so you're have as not

We've think that will line at is XX%. bottomed factor I out other of us kind The help utilization.

you the art was back just that XX% last to year, XX%. year over was If number previous

could seeing levels. normalized by growth utilization to just So we return get good

just with end And payoff then I'll activity. the

quarter, You quarters, payoffs. you mentioned billion. past that X had And that first billion this was the in to roughly commercial $X compare it if we $X.X

take will that the off we it return So table. headwind which if expect, more number will levels, normalized that to

for those there's in growth we'll and strong able give levers us all a great of that confidence why produce be So that's think I lot that factors, to loan 'XX.

Jon Arfstrom

you. one Good. Okay. That's for Jamie, just helpful. very

us to pressure Your how indicating quarter? the But very and margin of do first first the You quarter, trend expect gives the the you in after starting takes margin puts some give that good around point. us slight and a that?

Andrew Gregory

the of We as remarks, did mid-XXXs. first look once Jon, quarter fourth prepared at basis margin about in But in half interest. some half Kevin Yes, the for be to first impact the the that you the of the expecting the are year. you as mentioned on the have point year, stability we normalized nonrecurring X a in in in

the in And then fixed flow expect as second half see year. we expansion asset to to the rate in, margin repricing of starts

with year heading the Thank current tailwind there. the Given John. into believe XX margin outlook, end we the that you, from could in mid-XXXs the a

Operator

Our next from of comes Michael Rose question James. Raymond

Michael Rose

on and guys kind go term leverage just stable. talking about relatively CETX the the we more kind of there Maybe intermediate we buyback do this as if the deregulatory ratio? you is capital are about think into But return. there the environment, I know CETX for keeping of

could loan growth And more kind capital of your we return, the expect assuming on side expectations even hold?

Andrew Gregory

me let Michael, here. Yes, jump in

potential lot deregulation, capital plan us get flexibility. we deregulation or gives plan for XXXX As a our look at the our before of into we capital

$XXX in gives believe a and that for scenarios. wide flexibility us range the at share million look authorization of you we If repurchases,

anywhere range X% if of to our or is or in above it's below growth loan that. X% If

things flexibility that ratios is even industry was as We do right growth maintain what could high doing relatively we and one the as ratio stable influences others if that, to keep CETX or capital of stable objectives. XX%, we capital the have are use XX.X% beyond capital higher. But our that and you're maintain loan

would CETX. adequately tell we we we us high are adverse severe running There as testing, is we no do modeling that stress be are to When need as in capitalized.

excess. of plenty have We

and eye will we the targets. close into we consideration we'll future where that about as CETX so be is take our keeping on think And a industry

Michael Rose

follow-up, around margin. just to a the as just question back maybe Jon's Very helpful. And then

one I a in of levers broker decline potential just is think deposits. continued the

year, that you Is cash assume of as think I the that guide what you balances, out of the a elevated. about half back margin there gave to? now. the about guys range are which just X.X% that get you'd does total of to you called And for in like being think terms as down you

even And you of guided levers what could are other to? that range just there a supportive above be any

Andrew Gregory

that as a XXXX. just Cash Home continue basically go balances With to in advances, margin aware, as to through that you at marginal broker use to But vehicle, are do see decline you're in can just that sitting regards balances, in definitely do accretive like and quarter. see Bank were be we some we fourth X. funding XXXX. deposits, expect currently We cash we expect those which will Loan the elevated reduction as

broker And use intermix X currently, so need enter, of of available not grow can expecting But of between kind to we us, to available to we're have Loan we we those. but Home a deposits, Bank lot the liquidity those.

to and brokered loan growth be we're XXXX. growth We low deposit relatively to in to expect stay decline line actually core core those in and forecasting because

Michael Rose

Helpful.

Operator

Our next question comes from JPMorgan. Anthony Elian of

Anthony Elian

XXXX outlook your you to first easing the the X% we the just cycle the expect expect. On about you your rate get to pretty I impact in in if don't all FOMC half. you first guidance it. guess parts much can slide, you still X% a reiterated to growth continue but revenue half, talk cut of

Andrew Gregory

It's question. Yes, Tony. a great

rest impact lot headwind cycle. internally. as talking a to of through a spent we will the much talked lead it more go about as externally we've we've a with temporary that investors, and about NII have We the assure lag and time talked be that But now you lot you as can easing about

with XXXX that. success And in exactly successful but as our we clients. the scenarios, in all how we to far wanted being lot the were both it of want team what also do, knowing of to half second as a really for had communicate we And prepared

to were impact back lead we per October, we half million $X July what ease point and in $X million, lag the we when executed was had $X of realized more that million to XX about about second the $X -- million so basis the in you talking And said of year, before. go if like impact half

And effectively to deposits reprice we that and because efficiently were those able lower. was

look million that hard of So to million basis guide the it's industry we reduced $X that it's slide. what forward, us, for be I on as likely think points. that per would But think XX $X we know impact to that exactly put do. the incremental we to will

Anthony Elian

end, the guidance lower of Or growth if initiatives, make follow And have on lever revenue well? and tech will end as lower this so given year? hires the towards do towards then you strategic my expenses follow-up, the range, X% say your pull that to plan a comes to you less investments expenses

Andrew Gregory

reduced are because right variable. because will and plan more strategic that part in you're hiring, strategic they they're goals, our are to the that expenses those solutions. of there of That expenses result But incremental of are some assume product technology incremental fixed

expect happen. variable right we revenue is at And you're guide. But the if some to end and would so lower of the of spend, that the base decline expense were that we

Operator

from next of comes Shaw Jared question Our Barclays.

Jared David Shaw

Any we of as could terms the in either through look trajectory downside up Maybe beginning that coming at drive there or capital at anything color looking the give upside you can markets. there. the specific year,

Kevin Blair

sold over transactions. that capital largely of roll-up the lumpy based fees, the derivatives only small business But level can to up line clients, on much but syndication most sales. income more that debt item that it's into capital about also you and be calls, previous markets, business about where not on we've what's Jared, fee XX% from exists used to FX, diversified about diversity year, talked and be it in as arranger last we're derivatives, exciting lead underneath getting that is just And large markets. look when

are earlier, another into offer growth fees produce we to feel client returns new confident penetration And base. that's very we of double-digit growth solutions should diversification, these the these so largely increased to more with capital production. that when and higher in loan year that levels, normalized as And But a correlated function markets. of I yet with continuing mentioned increasing our

item. that are we grow So line continue to very that confident we'll

our corporate business are these out that the of build investment our generally bank, our large we generate market, structured those of some businesses like share middle as lending And the fees. division, units

that. So yes, across ability Jared, board, that's quite to the to fee continue we're our very in grow confident income. And in frankly,

over to mortgage We a mid-single-digit gave you and I years, growth. fees, the numbers there, basis because core another years. excluding X -- grown mortgage, single-digit last last we've going But exclude over interest year rate only our you on that's those be but environment, of X of when CAGR the XX% look

The that payments business. of like growth. is for sustainable part to income capital focus but our on us things expand we'll that continue fee And creating important means third-party level a markets,

like growth. We'll to continue all good to and wealth things and will things treasury and on solutions payment continue combined focus organic those generate

Jared David Shaw

as on just to more on And follow-up, your your be Okay. very think at all? and Or strong how question with in should appetite view following capital. administration M&A? up, capital of here perceived coming on Michael's industry-friendly. M&A a change guess, an I on that that's Does we

Kevin Blair

has changed we've we can tremendous amount anything and our side. investment our last like in I We've the Synovus on is plan executing make the of year, feel we said best a momentum. had don't think on

it top You we're our believe of returns. where quartile numbers, levels performing with some see in we in

we think strategy continue 'XX, will to and growth 'XX into look that organic our out. we As play

talk to approach we'll us forward our there's today. to you. us burner M&A, continue organic continue if it not front Now of to focus it's all our or And disruption participate relative have to advantage right improve calls, our to previous have position believe X and returns a strategy the options, point. either currency what I've maybe we'll our in at that of going more world the changes, puts X about M&A part but one on on right? We'll that a or is occurs some take said around if day best Thank I that now, growth,

Operator

Bernard Von Deutsche Gizycki from next comes Our of question Bank.

Bernard Von Gizycki

help I whether growth talk could to for you think or some X% previously efficiencies in just Could maybe footprint areas X%, efficiencies to you of X% headcount into that to range get in reduction the you technology to to first question offset expense efficiencies, some X% you're on through X%? expense pressure. of the identified my the lean the of X% that that looking So it's possibly XX or

Andrew Gregory

we've the I The our in past. majority expense mean the what story on of is efficiency personnel. said remains similar in to

And process go so it's as a to can we what look believe try And improvements, get is improvements, we how and when efficient client. to typically, market. at we as these that we you win for the

and It's a team the shareholder. win the for member win for it's a

the we our so focus to in continue office. efforts on And automation optimization, back

And so go And both we that footage, that's area our of to market. branch really is there our estate, focus. that, real we're ensuring #X with and looking square for looking optimized just how beyond and our at then [indiscernible] at

So continuous improvement as our at market to how it's a as story with just we same mindset we the look It's before. clients. -- our to go

Bernard Von Gizycki

you talk to payments, delivery for bank consumer know are how then I just models just benefits the refine Okay. trying you're wealth. Great. the you and you the to Could there? see -- in And along far

Kevin Blair

is one Well, different. little each a

is on payments. our with doing expanding ISO start What Let's sponsorship third-party model. payment we're the front we're

clients XX the essence, have that we side. on So a clients we that today, double that we have could, of little number a sponsorship for less serve in provide sponsorship we let's say, -- that than pipeline

see could continue you good So growth -- see to there.

we million off year about point, reference $XX make business. that a sponsorship to put in Just that a

at growing faster be could pace much there. a it So

on their a this been for We and strategy reimagination business clients some our strategy side, under wealth with focused created winning where the bankers On and private taking started business. under advisers we just we've who positions that wealth work time. our wealth commercial commercial with

and model seamless XXX commercial footprint. our around much a and of over will our had but clients, allow of more us We of with wallet prospects quite deeper some create platforms get also same year wealth just taking to our that. associated consumer to our it incremental model revenue that and apply frankly, We're delivery that past share all across this to relationships new trying

of on And side, is consumer we're our productivity trying to the what branches. maximize the

number of the to that know, you occur as the continue decline. within brands So transactions

our to applications of for create lot digital a We clients. self-service capabilities continue provide that

team asking we're clients. our so branch And the small on focus to business more

And and a more mortar. that's that bricks react needs from -- to would our much the is more branch outreach has having -- the of positively and

analytics not business. that to but the branch starting other locations. that the a more around things we're generate client we're business, using and So to small leaving continue deposit to those digital maximize consumer business We're growth focus little on

And so that's early on.

X other are along. The further

Operator

question next from Stanley. Morgan Our Manan Gosalia from comes

Manan Gosalia

right the little I there it? way guide, room if on like if a it sounds expenses. It wanted about that might high up of to revenue end operating mid- on the other of question positive Is to follow the suggesting is think to at you're revenue for more guide. get leverage the bit you're end at but the difficult you're the low

and whether the that And yield X leverage or and the shape drivers is just of not? the and you takes get loan then curve terms biggest in really? growth puts those Are there can the positive operating of

Andrew Gregory

end the leverage of revenue definitely is operating thinking we're high the about correct. easier. guide, positive the You If at are it

at expect as those right do the our be look can end to As line makes our current you guide, But easier. we in we XXXX, with you're relatively that that outlook. see given higher each in other,

for we leverage in is making, we hires And to in we leverage it, well XXXX positive beyond. on operating our believe for is we us, we're think position and believe strategic us that important less important technology priorities. but these winning than think us improvements, -- it's and the goal about operating they As an that

shoot secondary we're so to our going objective it's to for objectives. well. that's as the XXXX, strategic leverage to winning into on and And lean in positive those operating But

we about so generally think that's And it. how

expect see there. look and there do the quarter-on-quarter you either from to positive at quarter, we prior If operating it gets starting leverage then year, fourth versus

So that's at look at a high level how we it.

Kevin Blair

And Jamie, thing let there. add me one just

talked at think So and in million about at Jamie our just I When $XX add investments. look I has -- can point. investments, I about our look in one roughly of when I terms what the talked structured expanding as That expansion market platform optimization, of division. includes expansion entity, about lending our as about. that an third-party we've our well our It talks deposit strategy payments the wealth legal

that's million So almost $XX there.

of in significant sheet the All drive future. will and balance revenue those initiatives growth

it. of we this to like one on and at stop. for point an we feel other do things that's fixed come. those flexibility we some years from the in We to So to some opportunity many investment and that's items, Jamie's to but want want have of really that To unique there's don't standpoint, a all lean pays expense dividends think the point, things, we

Andrew Gregory

me of didn't I puts at question what let Manan, us of answer range. high end the your the continue.

You the biggest loan the growth there. clearly are thing that right, driver is

could more is as like mid-single the higher to that, far in also digit If revenue important there's push revenue, high market -- than fee an but there. activity growth. in elevated, could us mix is fee the growth. As revenue end what Funding you see component

of So there guidance. or the are end us the a that revenue to end to lot low of come our push could together different high pieces

Manan Gosalia

makes the a across in for loan part banks their borrowers makes lot to out weakness of yield the of more the of been That growth, has that growth been term loan sense. inverted, curve it things. has On some seen sense we've

think curve revolvers. borrowers the is of the -- curves now at yield up you yield borrowing Now team? that more curve, you front the those end to on that, Do the that from are seeing pick more using essentially starts again, banks to the of steepening some

Kevin Blair

you start we line the kind continuous that, to this increase point, down to bottom mean of it's there with sort rock feel decline in the and to at and your of theories seen here. that XX%, I we've see would some number. from hit utilization a like point,

back to were If higher range, to we and when at more had were XX% rates flattish you of we're XX%. prior yield a XX%. Today, the go we curve, low XX%, in

wait normalized on, anticipate. haven't So if a if that it's billion level. I return us and we more that, and see we if something extrapolate to to give just to your we you think were utilization in is that do seen that we'll borrowers And just balances hypothesis actuality $X spot of would in have that. But

Operator

Our Piper of from Stephen next question Sandler. comes Scouten

Stephen Scouten

initiatives even stage in of, the, think in in think capital and like hey, and of in markets. I the scale guess, -- terms you of initiatives, guys management of kind as some the efficiency we bank talk size about inning kind what if strategic developing as here's the out of goal and within maybe aspirational where are an plan markets? if of there's to sector about the And those the about relationship you Can we of progress guess get want think of continued and hiring I you 'XX strategic these I kind capital today. maximum where

Kevin Blair

Steve, it's good a question.

facilities. that to have I that's whether say, we're know a needs the sector. bank And less think that the capture we to think goal whether syndicated the capital sure you capital revenue debt global those markets, about so want markets it's each some about banking -- of become capital traditional make outside to It's able that's when commercial solutions, from markets, we to we clients player. more today

building that that use. know We're clients our capabilities we

we us come. or in may of they to out, it the new and capabilities out those And an they securitizations that what go bring build But serve equity clients, the you more like your business, to that time, we're out so needs. have hope you resources in you may and generate track capabilities need you serve build and you new put not We over mode believe capabilities. you the see the to figure ear

through more destination. really take versus capture the capabilities that so So clients' banks it's not own making share other that over. needs we lion's a having our It's our of sure

terms that middle bankers As XX. innings We to in years. X folks been market bankers in, for adding the we're we've to the adding last to of overall it took up now group roughly just we're almost having that relates from XX

Our built verticals. is CIB with fully out industry X unit

vertical or we'll this under adding be So subvertical FIG a team the second year.

of that's So more just extension. an

which our in some done side. the heavily we time market, verticals bank industry been some and able to different What's in quite of investing this haven't community Community last we're built we Bank, built resources as more is the optimize our years, we've on out these back out XX because we've throughout expansion that middle in

clients back revenues in to we where look with add to that what believe the million market, past. we change what an starting focus opportunity and there's probably between as from around done consider And we again. today, down And would and the we're more that's million, that's we've $X biggest $XX

resources we've don't I but leaned years, So business. back think some because time we're we've more really XXX early in innings first the bringing in that with for that the in and in that time been in it's that business

Stephen Scouten

you the outlook. for encouraging. a industry, the is That's then out kind last Got question the it. defaults a But tension Kevin. helpful, the here, your It's XX-year point loss smooth obviously, is and it like for you continuing are as follow-up. there just around for of model credit mean, credit really given improve I trends future maybe And of could where all go? with feels much to are me

credit? kind the or think trajectory you do if the around X.X%. impact XX-year get how mean, more trepidation of about goes you I And and that X% to do

Robert Derrick

start Yes, Steve, it's clearly, a as we're are. terms we as get where from Kevin me we far do rate -- up on of I we Bob. think, the in where I'll perhaps credit some a we're having well. goes, think trepidation. gives even don't metrics from at that. modeling curve certainly it effect credit to it's in our beginning rates, I of see perspective, think as having can kind But negative and outlook there, headed chime if But to improving normal with

have we X third-party Remember, basis of lending. points

we to report points given our really basis charge-off third XX% versus ratio So party. core the around

somewhat. the number improve think NPLs. look as that's term. intermediate forward, in fair we I actually could a So number And

to flat, continue make a we over see on time. We decline but progress

top adverse curve. think end quite overlay of the has with it So material curve, that, gets our scenario the us. Most of interest don't are perhaps rate on borrowers, that the back shorter of at effect a an on of end frankly, steeper I a

Kevin Blair

is the I'd years, only over these information it question, it, disclosures. thing lot Steve. that those that their basis have renewal shown -- interest add last in The just we've nailed clients to a Bob, based a points of based go speaks we've kind renewals that rate rate would X.X for from higher that of on those that But away are current up XXX-plus on to where is. up or gotten

the the of And very book. small on front of it's remind side. you a I'd of percentage commercial based that floating we're end XX% almost the loans

So impact, interest distress different our and it's and underwrites it's assuming guys. less scenarios debt we those an levels. coverage something rate service watch credit obviously, for But those team of

debt not there's says point an have some inflection to to it. We worried that question be that, So about to have that impact your service. mindful we're just does

Operator

from Our Christopher Marinac Scott. next comes Janney Montgomery from question

Christopher Marinac

to paid that get burs good off Are of and Just million, use fourth see to rest on did an with and portfolio. the criticized stable just the walk about loans renewed? that they And we as expect what very for want you to Bob, just there quarter. some was what and in that us illustration over those? $XXX rolling the with office Could we're continue the Bob, happened of of those through

Robert Derrick

question. the for Chris Thanks, Yes.

drill with and Let happening me portfolio start the maturities. on into kind what's of overall

in quarter, see you in to detrimental we got question XX% of got and your regraded, portfolio the And So specific as if answer cost. had they we that what overall most 'XX, those to of we terms maturing. material renewed, of is maturing credit fourth about effects kind we've the take at look of -- us didn't

think be indication will we good is in a that maturing that's probably similar. 'XX XX% the So that

We some to on got nonaccrual, office that's have size it. X that's relationship

than through we you stability working see rated the that. levels, and When that get as some We're you behind mentioned, are there. less XX%, one,

view positive. as a manage is think through should I a good be we'll in quarter these the XX% And I And maturities So fourth similar. would 'XX. think that indication, I

mean office as hiccups we won't some have Now go forward. doesn't we it

as a longer-term frankly, office point market quite a really think, through manage you cap stabilized, back be and overall, get to valuations have I starting feel But specific actually and beginning think stable more what But we to to at rates, about as know. we we with it's may see we're this improvement better portfolio. as office,

Christopher Marinac

on Great, outs really kind for will, Bob. one sort pipeline, quick in of just, you maybe That's a general. would you lift Kevin, And and be surface below what's the happening of there? your helpful. new personnel mean I then of if what

Kevin Blair

out Yes, then expansion teams, only to have XX we about those Chris, resources, production the have look program hired in but lift we'll to order about at resources it's that in XX -- XXXX, resources be it's and support in market place, you it. behind when XX involves it to

to out we through the and want. the talent says -- gone work Our that there it's has mean they're everyone done the team talent. I best has hiring -- that identify it's

And to to our asked bring individuals the we've and timing those is So teams those identify when right, opportunity have them individuals. hire we'll over.

this said, is So a we're strategy the that only it's as I -- not running. ones

bodes So what our I us well think culture. for is

from bankers those values several and past point they what are same had serve be the centricity, ultimately, that have capabilities want, folks to here coming our tell that client the as larger to in at they that People an institutions. and we which over best institutions come that years, institution is this the products generally able reference last is have that that

just that the hires. of it's appeals a those early now to and model we've quarter, come Ts And first individuals. So those many quarter, crossing eyes and second we'll the built dotting make

Operator

Catherine Our next from question KBW. from comes Mealor

Catherine Mealor

I deposit margin had follow-up one on on the just the side.

can reduction costs to be where to as and to give quarter. costs deposit ended great deposit us the the to maybe first there Is where we'll in a quarter us sense really throughout So starting -- was the you any about the talk trends see. quarter

Andrew Gregory

rates quarter, we significantly. through the fourth in production fairly went the Catherine, and quarter saw as decline we nicely, fairly the

If down came about reduction that through production, XX of look at A production. prior overall lot basis on points markets. money were quarter you we the in from

to see are that. pleased we And so

good was market production in reduction that with the thing the rates. And even money remained elevated

the proceeding are things rates. so we And seeing We're expected. decline as in

the If where you portfolio as we and at of proceeding those the expected. are out look beta portfolios cycle, easing the by kind betas broke in we

quarter. laid are had proceeding out as in And so the things we prior

Catherine Mealor

about Kevin, the you one made, And or comment -- question Great. X pipeline. then That's helpful.

just level You little move if And in quarter. in color both could CRE curious sensitive that. side. which were and that on to XX-year, you thought mentioned the the with a is fourth pipelines give the C&I production new that bit of up think the how was CRE CRE interesting I'm just rates? around I you of do

Kevin Blair

I'll I total for Catherine, draw wanted you give that. XX Yes. will to at deposits average which rate $X.XX. And just in deck, also Slide December to answer the the your attention

average lot of an But So just this deals there but we're that over CRE, organization, X term a will quarter the as year, last lot basis being it I just in -- of as doing weren't issued we, is weren't sheets because part it's points to rate. an as still below think the about transactions. relates there of a

up. CRE two, the is loan are can't picking We demand. more in deals. sides over up, And There's so to well our a out new One to do X activity market are and bankers client positioned picks last That's little equation. bankers pitching that the deals. that be year. going to create the we're our being with aggressive on our able as at a And And side. little base more leaning

to that bankers side of were many of the but credit the it's say cross-selling I focused it, on into book. think our managing also safe CRE

treasury So we had in our adoption saw year growth into in We greater saw tremendous that. CRE so great a deposit sales they base. and client

into leaning into back little growth. transitioning they're a loan Now more

is that. and bankers our more little focused So generating a on up are picking market

So the production since I'm result, as I as seen was the mentioned, quarter, a quarter committed level even highest sorry, XXXX. of in XXXX. fourth fourth our we've

we from starting So pick will it think up, and up here. to back it is pick

Catherine Mealor

XX. I Slide Great. Helpful. see And

for you out. thank So pointing that. Appreciate that

Operator

Nick UBS.. Our from Holowko comes Instructions] next [Operator from question

Nicholas Holowko

with from the that asset in wondering in color there think year. and moves Or some on XX throughout incremental trajectory I margin basis point the side? rate I'm as a could in the a yield talked to couple past from repricing opportunity. months. Is XXXX so rates the the over be repricing about the way progressing past, Appreciate we're the you've all or I of fixed on ballpark XXXX opportunity? the still weeks upside and the fair benefit know

Andrew Gregory

those There could numbers. incremental upside from be

what rate fixed we we year. look at could As around be that, believe and the would But impacted just margin. when context to at benefit et it's loan the And will portion say that drop look repricing basis mix, the balance cetera. exactly is of spreads, we XX that because deposit a be points on XXXX cash asset by that XXXX, in of uncertain that can the a sheet I portion

in somewhere to in. a we're things that, beyond a other XXXX it's and uncertain, XXXX when will margin little that have it's the mid-XXs. But the guiding so look as we you And to play do to going between for more But somewhere uncertain mid-XXs material tailwind how those see margin.

Nicholas Holowko

Perfect. in which in ratio then the some of looks And in scenarios, the a the quarter. but component performance-driven it. a increase credit. was just stable And loans pretty improvement criticized were touching small on it small despite reserve know and nonperforming like I

wondering year? you coverage that of could and thinking you're allowance on how the touch So throughout if as was we're direction about maybe the then the progressing I

Andrew Gregory

Yes.

to that at led to the out that. the prepared impacts. of components there million look are we was that production lot As the was allowance, and one one larger we that the a increase the The in remarks loan in extension of due portfolio the small $X allowance, the called of

economic a of material that right that not the You're there outlook. was change in

bit is losses, would forecast, unemployment that the that But the a driver say the a consensus and change When calculation. calculation. largest of I a of look of one is is rate at in the near-term drivers we of loan in life allowance higher little unemployment that

rate more loan far learn as play driver of look we're where rate be we unemployment as will comfortable life ] is the out to we [ in XXXX. the very expect $X.XX. we but there, see year we it the as but how key And of that will estimate. as is would So unemployment stability uncertain policies, forward, a allowance relative at through the loss will go

Operator

Timur Our Fargo. from next Braziler from question Wells comes

Timur Braziler

for to rebound. the growth, Looking clearly, entire the on loan back industry is loans looking

I'm portends on landscape? the thinking banks. the competitive statement profound year the here? landscape for that lending as the Is even of right Southeast go more I some we through of you rates are you just to the on that competition greater think that for Are starting the progresses what of how I side? is mainly wondering competitive course guess, see now?

Kevin Blair

they have to I grow think you economy to going deploy Tim, you want an it. rate, think People exponential excess share. is at your the and if you want capital excess to nailed it. they And have get liquidity, that

comes competition. that to price So down always

over in. I years used credit is think vehicle the to the XX what done lean a has as not industry last

on Everyone middle the to hit down is trying of still the fairway credit.

year, to So margin see starting we, And price. saw because inflated then I expected there. think production. spreads comes on to over compression last some new it the We're that's

you this quarter, at X.X%. last was production our If just going look on yield

The was $X.XX. prior it quarter,

of see going over that, Having that to million starting far said deposits for internal on transfer we're great, $XXX what's Some quarter lower $XXX our been of has this versus production But funds and previous the of million. index. were are with earlier, a so do just to around the the or relative to Jamie pricing. little spread bit compression mentioned

X.XX% getting a new if net-net, where production, were look spread at So we're just last that, off you X.XX%. quarter

loans we've smart So got appropriately. to price be and to continue

to that decisions. use bankers price the making on sure we're with to our make tools evaluate we've is our appropriately. tools to capital that We have returns continue strategic right they'll other to offset to But and deposits in place those got the

And grow growth opportunity compression only do industry, not gone at gives some margin. and recognizing that will the be to so, to Jamie NII, continue us into we the expand we've that about, it this without built but our margin just there But talked as we not the if plan. to in strategy have

Timur Braziler

then job that throughout I'm How the a working goes balance you at that more down. have 'XX. just other the wholesale down? there side good sheet, looking the funding, just Great. that of bring XX% the to of And are just guys where on wondering course much

Andrew Gregory

Yes.

home the XX that it's you at have for mentioned thing if line as Great. advances we X, you first with but or further. any you've XX notice be core growth Looking at reduce that loan loan so last are we seen that the months can't growth, that, in core is, to But we the what as deposit going expect not bank as reduction to earlier, in really XX%, would material see some Thank the questions. over you'll

Operator

Tenner of comes Davidson. Our D.A. next question from Gary

Gary Tenner

but Most loan of my questions have short-term of answered, question. been kind had I a

levels headwinds we versus it, for the about stabilize in the about another the growth before good think is loan a greater pipelines, other talked first and of we is contraction the probably You you the kind there likelihood expect I to the fourth start of production year to But quarter quarter direction? quarter off pivot as in group avenue loan an or balances and overall. talk slowly, the maybe

Kevin Blair

quarter in see expect will level of to what some based the activity would we Obviously, growth we year. payoff think the our to of quarter. But that we first I expect from in production fourth see quarter. the modest Gary, be pipelines we're on the would expecting next in it a standpoint, based growth not expect on first growth

Operator

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

Kevin Blair

team Synovus all members relationships contributions deepened to continues strengthen value and and my us. which we interest competitive appreciation a Alex, for their want delivered in to exceptional proposition, deepest questions service landscape. in you, of Together, you and Thank I achievements for continued client XXXX. thank your and to our in all crowded our exceptional extend differentiate your and

and to has communities we connect, performance This Internally, increase client an even who shareholders led as Synovus and fans, and greater in commitment optimistic. act delighted both win raving resilient our collaboration This signifies with more stronger year's branded to Go. boldness. who are XXXX and are and

XXXX leaning we in as gains. are through believe core investments as growth execution outperformance in accelerating as beyond create We through to opportunity and well have more marketer and strategic we an sustainable

disruption, presenting interest our footprint ability competitive offering and navigate expand, economic our successfully. environment to through opportunities an continuing marketplace the consolidation and rate future in new confident tailwinds feel we to a and With

his call, Given his last years earnings this heartfelt again to Derrick want of gratitude service is XX to our for offer to Bob dedicated Synovus. I

His lasting he numerous missed. impact leave a will and greatly contributions be will

Bob to to on his to him baton delighted we embarks Ann next wish a have chapter pass well-deserved promotion. the this on and and Bob best of want congratulate Fortner, all and much As life, happiness the her I'm

Thanks and and are we of look always your our ongoing each value upcoming again at we conferences you with today. if our always, attendance. to have industry with As of meeting relationships to that, available want look forward Alex, we that to questions. And many we for you conclude remind you you, call forward for

Operator

you call. for joining Thank all today's

your now disconnect You lines. may

Synovus Financial (SNV) 16 Jan 252024 Q4 Earnings call transcript