Synovus Financial Corp Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jon Arfstrom - RBC Capital Markets - Analyst : Good morning, everyone. Kevin, maybe for you just to start this off, can you talk a little bit more about the lending environment and maybe some more qualitative commentary? And just also curious what you think takes you to the lower end of the loan growth guidance range and the higher end? And kind of curious what's happened in the last several weeks as well?

Question: Jon Arfstrom - RBC Capital Markets - Analyst : Okay. Helpful. Yeah, it sounds like market share gain is a pretty big piece of this as well. So that's fair.

Question: Jon Arfstrom - RBC Capital Markets - Analyst : Yeah. Okay. Perfect. Thank you. Jamie, you surprised me on the margin. It was a little better than I thought. And when I look at slide 14, there are obviously two big movements in terms of loan repricing and deposit cost coming down. How are you feeling about the margin from here in terms of some of the near term puts and takes?

Question: Jon Arfstrom - RBC Capital Markets - Analyst : Okay. All right. Thank you very much. Appreciate it. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 17, 2025 / 12:30PM, SNV.N - Q1 2025 Synovus Financial Corp Earnings Call

Question: Anthony Elian - JPMorgan - Analyst : Hi everyone. Just a follow-up on Jon's previous question on loan growth. Was the strong loan production you saw during the previous quarter at all due to bars getting ahead of our stockpiling inventories prior to the tariffs?

Question: Anthony Elian - JPMorgan - Analyst : Thank you. And then my follow-up, on the reduction to the expense guidance, I know on the guidance slide you have a bullet indicating no change in strategic growth objectives. And Kevin, I think in your prepared remarks you mentioned you made 20% of the planned hires through mid-April. I just wanted to confirm if there are any changes at all to the amount or the timing of the 20% and 30% more RMs yo plan to hire over the next three years? Thank you.

Question: Anthony Elian - JPMorgan - Analyst : Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 17, 2025 / 12:30PM, SNV.N - Q1 2025 Synovus Financial Corp Earnings Call

Question: Jared Shaw - Barclays - Analyst : Good morning, guys. Maybe looking at credit and sort of the improvements there. First, when you look at the charge-offs, I think you called out an

Question: Jared Shaw - Barclays - Analyst : Okay. And then when you look at the overall sort of increased weighting to an adverse scenario, was that as of March 31? Or does that sort of reflect on where we are today? And should we expect that that maybe continues to have a heavier weighting towards adverse scenario in the second quarter?

Question: Jared Shaw - Barclays - Analyst : Okay. That's great color. Thanks. And then just finally for me, just on capital, how should we be thinking about, I guess, the remaining buyback here given the discussion around CET staying stable and using that to fund growth? Should we think that you're out of the market for the time being?

Question: Jared Shaw - Barclays - Analyst : Thank you.

Question: Gary Tenner - D.A. Davidson & Company - Analyst : Good morning. So I appreciate the commentary regarding your focus on getting your arms around these policy changes that you highlighted on slide 9 in the deck. It kind of sounds like you're working to kind of ring-fence, if you will, some exposure there. Can you provide any more specificity around kind of magnitude or proportion of your customer base that you think of this following into that kind of primary target group? And any other color you could provide there?

Question: Gary Tenner - D.A. Davidson & Company - Analyst : Thanks. I appreciate the thoughts and commentary there. And just a quick kind of bookkeeping question, if you will, in terms of the buyback in the quarter, can you give us the average price that you bought back shares at?

Question: Gary Tenner - D.A. Davidson & Company - Analyst : Thank you.

Question: Bernard von-Gizycki - Deutsche Bank - Analyst : Good morning. I think the previous time you guided to about 20 basis points benefit from fixed asset repricing for '25 to '26. And you mentioned the four rate cuts stable 10-year assumption. Is there any update to what you might be expecting for fixed asset repricing given an update (inaudible)?

Question: Bernard von-Gizycki - Deutsche Bank - Analyst : I can appreciate how difficult it can be in this environment to forecast that. But maybe just my follow-up on capital markets, maybe another question on forecasting, I know the revenues were a bit weaker than expected and you noted that it was due to loan production mix. Can you just expand on this and expectations for this mix and yield trend for the rest of the year? I believe you noted on the call core execution here still expected. And I believe you point us to double-digit growth in capital markets previously. So any update?

Question: Bernard von-Gizycki - Deutsche Bank - Analyst : Okay. Great. Thanks for taking my questions.

Question: Casey Haire - Autonomous Research - Analyst : Good moring, guys. I wanted to follow up on the origin, specifically deposit costs. So as you guys pointed out, your beta is kind of at 46% and is coming at a lot stronger than what you guys laid out. I was wondering some updated thoughts on where that can go from here? And then also the revenue guidance is based on the deposit composition holding stable, but you have a nice positive mix shift with lower CDs. I was wondering if that can continue. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 17, 2025 / 12:30PM, SNV.N - Q1 2025 Synovus Financial Corp Earnings Call

Question: Casey Haire - Autonomous Research - Analyst : Okay. Great. And then on the expense front, you guys have done a good job of balancing operating leverage dynamics with some of your strategic investments. The guide here, there are some healthy encouraging signs, but it does assume some pretty aggressive step-ups in loan growth and fees. If those fall short, is there more room to push the expenses lower or is this Q4 guide, the low end of that is kind of the end?

Question: Casey Haire - Autonomous Research - Analyst : Thank you.

Question: Nicholas Holowko - UBS Financial Services Inc. - Analyst : Good morning. Maybe just one follow-up on your slide 9 and highlighting the proactive response to DC policy changes, do you feel like the technology investments that you've made over the past handful of years and those that you're continuing to invest in today have helped you in any way prepare for a more dynamic times like we're in today? And if so, how does that help inform you about some of the investments you are continuing to make here on the strategic side?

Question: Nicholas Holowko - UBS Financial Services Inc. - Analyst : Got it. Thank you. And then maybe just one more follow-up on the allowance. You highlighted performance on the credit front coming in a little better than expected. Anywhere to call out in particular where credit performance is improving?

Question: Nicholas Holowko - UBS Financial Services Inc. - Analyst : Thank you very much.

Question: Catherine Mealor - Keefe, Bruyette & Woods North America - Analyst : Good morning. We talked a lot about how great loan origination volume has been so far this year. Can you talk about what you're seeing on the paydown side? I guess that's the big risk to the movement to 10-year, depending what happens there if we see it sort of in paydowns. And maybe what you're seeing in your client base particularly towards the back half of the quarter? Thanks.

Question: Catherine Mealor - Keefe, Bruyette & Woods North America - Analyst : Great. That's helpful. And then on what pricing, I heard anecdotally on one of the conversations actually in February, was that growth looks good, but the pricing is getting more competitive. Of course, kind of the word changed a month later on. But just sort of curious about on what you're seeing on the loan pricing side and how you think that plays out over the next few months?

Question: Catherine Mealor - Keefe, Bruyette & Woods North America - Analyst : Great. Very helpful. Thank you.