Synovus Financial Corp. (NYSE:SNV) Q1 2024 Earnings Call Transcript April 18, 2024 8:30 AM ET Company Participants Jennifer Demba - Head of Investor Relations Kevin Blair - Chairman, President and CEO Jamie Gregory - CFO Robert Derrick - Chief Credit Officer Conference Call Participants Jon Arfstrom - RBC Capital Markets Ebrahim Poonawala - Bank of America Steven Alexopoulos - JP Morgan Catherine Mealor - KBW Gary Tenner - D.A. Davidson Jared Shaw - Wells Fargo Michael Rose - Raymond James Stephen Scouten - ...

Synovus Exhibit 99.2 INCOME STATEMENT DATA (Unaudited) | --- | --- | --- | --- | --- | --- | --- | --- | |-------------------------------------------------------------------------------|-------|--------------------|------------------|----------------------|------------------|------------------|---------------------------------------------| | (Dollars in thousands, except per share data) | First | 2024 \n Quarter | Fourth Quarter | 2023 \nThird Quarter | \nSecond Quarter | First Quarter | First Quarter \n'24 ...

Part I [Index of Defined Terms](index=4&type=section&id=Index%20of%20Defined%20Terms) This section provides a comprehensive index of defined terms and acronyms used throughout the report, clarifying references to 'Synovus,' 'the Company,' 'the Bank,' and various financial and regulatory terms like ACL, ALCO, Basel III, CECL, CET1, FDIC, FHLB, LIBOR, and SOFR - The report defines 'Synovus,' 'we,' 'our,' 'us,' and 'the Company' as the consolidated entity of Synovus Financial Corp. and its subsidiaries, while 'the Bank' or 'Synovus Bank' refers specifically to its bank subsidiary[12](index=12&type=chunk) - Key financial and regulatory terms defined include ACL (Allowance for credit losses), ALCO (Asset Liability Management Committee), Basel III (regulatory capital requirements), CECL (Current expected credit losses), CET1 (Common Equity Tier 1 Capital), FDIC (Federal Deposit Insurance Corporation), FHLB (Federal Home Loan Bank), LIBOR (London Interbank Offered Rate), and SOFR (Secured Overnight Financing Rate)[13](index=13&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk) [Forward-Looking Statements](index=9&type=section&id=Forward%20Looking%20Statements) This section outlines forward-looking statements, emphasizing that actual results may differ materially due to various known and unknown risks, including competition, economic downturns, interest rate fluctuations, regulatory changes, and operational challenges - Forward-looking statements are based on current beliefs and expectations of management and are subject to **significant risks and uncertainties**[22](index=22&type=chunk) - Key risk factors include competition from traditional and non-traditional banking institutions (Fintechs), ability to realize benefits from strategic initiatives, economic downturns (recession, inflation, interest rate fluctuations), changes in funding costs and availability, impact of recent bank failures on client confidence and liquidity, ability to attract and retain employees, and successful implementation of new technologies[23](index=23&type=chunk) - Other significant risks involve changes in governmental policy, laws, and regulations, cybersecurity threats, asset quality deterioration, potential losses from fraud, and the ability to obtain regulatory approvals for actions like dividends or acquisitions[24](index=24&type=chunk) [Item 1. Business](index=11&type=section&id=Item%201.%20Business) Synovus Financial Corp. is a Georgia-headquartered financial services company providing commercial and consumer banking, along with specialized products and services, through its subsidiary Synovus Bank and other non-bank subsidiaries across the Southeastern U.S. In 2023, the company adapted its strategy to manage industry instability, focusing on liquidity, credit vigilance, and capital management, and plans for 2024 include enhancing profitability, deepening relationships, and accelerating growth through digital and analytics investments - Synovus Financial Corp. is a registered bank holding company headquartered in Columbus, Georgia, providing commercial and consumer banking services through Synovus Bank and other offices in Alabama, Florida, Georgia, South Carolina, and Tennessee[25](index=25&type=chunk) Synovus Financial Corp. Key Financial Data (December 31, 2023) | Metric | Amount | | :--------------------- | :------------- | | Total Consolidated Assets | $59.81 billion | | Total Consolidated Deposits | $50.74 billion | - In 2023, Synovus adapted its strategic plan to focus on safety and soundness, liquidity, deposit generation, credit vigilance, and optimized capital management in response to banking industry instability and economic uncertainty. For 2024, the strategy will focus on enhancing profitability, deepening relationships, and accelerating growth through initiatives like banking-as-a-service, deposit generation, and investments in automation, digital, and analytics[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) [Overview](index=11&type=section&id=Overview) [Banking Operations](index=11&type=section&id=Banking%20Operations) [Non-bank Subsidiaries](index=11&type=section&id=Non-bank%20Subsidiaries) [Business Developments](index=11&type=section&id=Business%20Developments) [Competition](index=13&type=section&id=Competition) [Human Capital Resources](index=13&type=section&id=Human%20Capital%20Resources) [Supervision, Regulation, and Other Factors](index=15&type=section&id=Supervision%2C%20Regulation%2C%20and%20Other%20Factors) [Item 1A. Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) This section details the material risks Synovus faces, categorized into strategic, operational, credit and liquidity, compliance and regulatory, and market and general risks, including intense competition, cybersecurity threats, interest rate fluctuations, and economic instability - Strategic risks include **intense competition** from traditional and non-bank institutions (Fintechs), potential failure to realize benefits from strategic initiatives, and challenges in implementing new lines of business or technologies[115](index=115&type=chunk)[117](index=117&type=chunk)[120](index=120&type=chunk) - Operational risks encompass the inability to attract and retain skilled employees, rapid technological changes, unsuccessful IT system enhancements, disruptions from information technology system failures or security breaches, and elevated fraud risks[122](index=122&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk)[134](index=134&type=chunk) - Credit and liquidity risks highlight adverse effects from interest rate changes on net interest income, challenges in funding availability due to deposit market changes, potential inadequacy of the allowance for credit losses, and the inability to service debt or pay dividends[146](index=146&type=chunk)[152](index=152&type=chunk)[156](index=156&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk) - Compliance and regulatory risks include the impact of federal fiscal and monetary policies, extensive banking industry regulation, potential supervisory actions, and the need to conserve capital due to economic conditions or regulatory changes[164](index=164&type=chunk)[165](index=165&type=chunk)[168](index=168&type=chunk)[171](index=171&type=chunk) - Market and other general risks involve inflationary pressures, unstable global economic conditions (including geopolitical conflicts), erosion of client confidence due to recent bank failures, extensive use of models in business, ESG risks, climate change impacts, and concentrated operations in the Southeastern U.S. making the company vulnerable to local events[174](index=174&type=chunk)[175](index=175&type=chunk)[178](index=178&type=chunk)[180](index=180&type=chunk)[182](index=182&type=chunk)[185](index=185&type=chunk)[188](index=188&type=chunk) [Strategic Risk](index=27&type=section&id=Strategic%20Risk) [Operational Risk](index=28&type=section&id=Operational%20Risk) [Credit and Liquidity Risk](index=32&type=section&id=Credit%20and%20Liquidity%20Risk) [Compliance and Regulatory Risk](index=35&type=section&id=Compliance%20and%20Regulatory%20Risk) [Market and Other General Risk](index=37&type=section&id=Market%20and%20Other%20General%20Risk) [Item 1B. Unresolved Staff Comments](index=39&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This section states that there are no unresolved staff comments from the SEC [Item 1C. Cybersecurity](index=39&type=section&id=Item%201C.%20Cybersecurity) Synovus maintains a comprehensive cyber risk management program integrated into its enterprise risk management system, designed to identify, assess, manage, mitigate, and respond to cybersecurity threats, with oversight from the CISO and Board's Risk Committee - Synovus operates a cyber risk management program aligned with industry standards (NIST Cybersecurity Framework, ISO 27005) to address threats like ransomware and denial-of-service attacks[191](index=191&type=chunk)[193](index=193&type=chunk) - The program includes mandatory annual and quarterly employee training, bimonthly security awareness communications, and monthly effectiveness testing[192](index=192&type=chunk) - Cybersecurity governance involves the CISO reporting to executive management and the Board's Risk Committee quarterly on strategy, defense initiatives, event preparedness, and risk assessments, also facilitating Board tabletop exercises and training[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk) - To date, Synovus has not experienced a cybersecurity incident that has materially impacted its business strategy, financial condition, or results of operation, despite ongoing cyber incidents[197](index=197&type=chunk) [Cybersecurity Risk Management and Strategy](index=39&type=section&id=Cybersecurity%20Risk%20Management%20and%20Strategy) [Cybersecurity Governance](index=40&type=section&id=Cybersecurity%20Governance) [Item 2. Properties](index=40&type=section&id=Item%202.%20Properties) Synovus and its subsidiaries own or lease 266 facilities, totaling approximately 2.6 million square feet, primarily consisting of office space for business operations in its headquarters and across its footprint, all deemed suitable for the company's operations - As of December 31, 2023, Synovus and its subsidiaries owned **150 facilities (1,437,366 sq ft)** and leased **116 facilities (1,177,132 sq ft)**, primarily office space in its operating footprint[202](index=202&type=chunk) [Item 3. Legal Proceedings](index=41&type=section&id=Item%203.%20Legal%20Proceedings) This section refers to Note 14, 'Commitments and Contingencies,' in the Financial Statements for details on legal proceedings [Item 4. Mine Safety Disclosures](index=41&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to Synovus Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Repurchases of Equity Securities](index=42&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Repurchases%20of%20Equity%20Securities) Synovus common stock trades on the NYSE under 'SNV', with 146.4 million shares outstanding as of February 20, 2024, and the company expects to continue quarterly cash dividends, while the Board authorized up to $300 million in common stock and $50 million in preferred stock repurchases for 2024 - Synovus common stock is traded on the NYSE under the symbol **'SNV'**[208](index=208&type=chunk) Common Stock and Shareholder Data | Metric | Value | | :--------------------------------- | :---------------- | | Shares Outstanding (Feb 20, 2024) | 146,399,324 shares | | Shareholders of Record (Feb 20, 2024) | 9,369 | | Market Value (June 30, 2023) | ~$4.22 billion | | Closing Sale Price (June 30, 2023) | $30.25 | - Synovus expects to continue paying regular quarterly cash dividends, subject to Board approval and regulatory requirements[209](index=209&type=chunk) - No share repurchases were completed in 2023. For 2024, the Board authorized up to **$300 million** in common stock and **$50 million** in preferred stock repurchases. As of February 20, 2024, **$29.9 million (800,000 shares)** of common stock had been repurchased[212](index=212&type=chunk)[213](index=213&type=chunk) [Item 6. Reserved](index=42&type=section&id=Item%206.%20Reserved) This item is reserved and contains no content [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Synovus' 2023 financial results were impacted by economic uncertainty, bank failures, and monetary policy tightening, leading to a decrease in net income available to common shareholders, while strategic actions included investment portfolio repositioning, loan sales, and a voluntary early retirement program, with 2024 guidance anticipating stable economic conditions and a flat interest rate environment - The economic environment in 2023 was characterized by continued inflation, economic uncertainty, geopolitical pressures, and monetary policy tightening, exacerbated by bank failures in the first half of the year[216](index=216&type=chunk)[217](index=217&type=chunk)[220](index=220&type=chunk) 2023 Financial Highlights (vs. 2022) | Metric | 2023 (in thousands) | 2022 (in thousands) | Change (%) | | :----------------------------------- | :------------------ | :------------------ | :--------- | | Net income available to common shareholders | $507,755 | $724,739 | (30)% | | Diluted EPS | $3.46 | $4.95 | (30)% | | Net interest income | $1,816,655 | $1,796,900 | 1% | | Net interest margin | 3.21% | 3.32% | (11) bps | | Non-interest revenue | $404,010 | $409,336 | (1)% | | Non-interest expense | $1,335,424 | $1,157,506 | 15% | | Provision for credit losses | $189,079 | $84,553 | 124% | | Total loans, net of deferred fees and costs | $43,404,490 | $43,716,353 | (1)% | | Total deposits | $50,739,185 | $48,871,559 | 4% | | CET1 capital ratio | 10.22% | 9.63% | 59 bps | | Non-performing assets ratio | 0.66% | 0.33% | 33 bps | | Net charge-off ratio | 0.35% | 0.13% | 22 bps | - Key impacts on 2023 results included **$77.7 million** in realized net losses from investment securities portfolio repositioning, a **$51.0 million** FDIC special assessment accrual, a **$50.1 million** loss from strategic loan sales, and **$18.4 million** in restructuring charges for a voluntary early retirement program[222](index=222&type=chunk)[224](index=224&type=chunk)[226](index=226&type=chunk) - For 2024, Synovus' guidance assumes stable economic conditions and a flat interest rate environment, projecting end-of-period loan growth of **0% to 3%**, core deposit growth of **2% to 6%**, adjusted revenue decline/growth of **(3%) to 1%**, and adjusted non-interest expense decline/growth of **(5%) to (1%)**, with the CET1 ratio targeted between **10.0% and 10.5%**[232](index=232&type=chunk) [Executive Summary](index=43&type=section&id=Executive%20Summary) [Critical Accounting Policies](index=46&type=section&id=Critical%20Accounting%20Policies) [Discussion of Financial Condition and Results of Operations](index=47&type=section&id=Discussion%20of%20Financial%20Condition%20and%20Results%20of%20Operations) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=72&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Synovus' primary market risk is interest rate risk, managed through simulation modeling and derivative instruments to balance asset and liability repricing characteristics, with net interest income sensitivity analysis indicating a projected increase with rising rates and a decrease with falling rates - Synovus' most significant market risk is **interest rate risk**, managed by the Asset Liability Management Committee (ALCO) through simulation modeling and derivative instruments[366](index=366&type=chunk)[367](index=367&type=chunk) Estimated 12-Month Net Interest Income Sensitivity (December 31, 2023) | Change in Interest Rates (bps) | Estimated Change in Net Interest Income | | :----------------------------- | :-------------------------------------- | | +200 | 3.7% | | +100 | 1.9% | | -100 | (2.0)% | | -200 | (4.1)% | - Synovus uses interest rate swaps as cash flow hedges (**$5.60 billion** notional) to mitigate floating rate loan risk and as fair value hedges (**$2.56 billion** notional) for fixed-rate debt and deposits[378](index=378&type=chunk)[379](index=379&type=chunk) - Other market risks include the impact of securities market fluctuations on financial management services revenue and the sensitivity of mortgage banking income to mortgage interest rates[374](index=374&type=chunk)[376](index=376&type=chunk) [Market Risk and Interest Rate Sensitivity](index=72&type=section&id=Market%20Risk%20and%20Interest%20Rate%20Sensitivity) [Derivative Instruments for Interest Rate Risk Management](index=73&type=section&id=Derivative%20Instruments%20for%20Interest%20Rate%20Risk%20Management) [Item 8. Financial Statements and Supplementary Data](index=74&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for Synovus, including balance sheets, statements of income, comprehensive income, changes in shareholders' equity, and cash flows for the years ended December 31, 2023, 2022, and 2021, along with independent auditor's reports and detailed notes on accounting policies, segment information, and financial instruments - KPMG LLP issued an unqualified opinion on Synovus' consolidated financial statements and the effectiveness of internal control over financial reporting as of December 31, 2023[382](index=382&type=chunk)[383](index=383&type=chunk)[393](index=393&type=chunk)[394](index=394&type=chunk) - A critical audit matter was identified in the assessment of the allowance for loan losses for loans held for investment evaluated on a collective basis, due to the high degree of audit effort, specialized skills, and subjective judgment involved in evaluating the methodology, models, macroeconomic forecasts, and quantitative adjustments[387](index=387&type=chunk)[388](index=388&type=chunk) Consolidated Balance Sheet Highlights (December 31, 2023 vs. 2022) | Metric | 2023 (in thousands) | 2022 (in thousands) | | :------------------------------------------ | :------------------ | :------------------ | | Total Assets | $59,809,534 | $59,731,378 | | Total Deposits | $50,739,185 | $48,871,559 | | Total Liabilities | $54,665,386 | $55,255,577 | | Total Synovus Financial Corp. Shareholders' Equity | $5,119,993 | $4,475,801 | Consolidated Income Statement Highlights (Years Ended December 31) | Metric | 2023 (in thousands) | 2022 (in thousands) | 2021 (in thousands) | | :----------------------------------- | :------------------ | :------------------ | :------------------ | | Net interest income | $1,816,655 | $1,796,900 | $1,532,947 | | Provision for (reversal of) credit losses | $189,079 | $84,553 | $(106,251) | | Non-interest revenue | $404,010 | $409,336 | $450,066 | | Non-interest expense | $1,335,424 | $1,157,506 | $1,099,904 | | Net income available to common shareholders | $507,755 | $724,739 | $727,304 | | Diluted EPS | $3.46 | $4.95 | $4.90 | [Report of Independent Registered Public Accounting Firm](index=74&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) [Report of Independent Registered Public Accounting Firm](index=76&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) [Consolidated Balance Sheets](index=77&type=section&id=Consolidated%20Balance%20Sheets) [Consolidated Statements of Income](index=78&type=section&id=Consolidated%20Statements%20of%20Income) [Consolidated Statements of Comprehensive Income](index=79&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) [Consolidated Statements of Changes in Shareholders' Equity](index=80&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) [Consolidated Statements of Cash Flows](index=81&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) [Note 1 - Summary of Significant Accounting Policies](index=82&type=section&id=Note%201%20-%20Summary%20of%20Significant%20Accounting%20Policies) [Note 2 - Investment Securities Available for Sale](index=95&type=section&id=Note%202%20-%20Investment%20Securities%20Available%20for%20Sale) [Note 3 - Loans and Allowance for Loan Losses](index=98&type=section&id=Note%203%20-%20Loans%20and%20Allowance%20for%20Loan%20Losses) [Note 4 - Premises, Equipment and Software](index=108&type=section&id=Note%204%20-%20Premises%2C%20Equipment%20and%20Software) [Note 5 - Goodwill and Other Intangible Assets](index=108&type=section&id=Note%205%20-%20Goodwill%20and%20Other%20Intangible%20Assets) [Note 6 - Other Assets](index=111&type=section&id=Note%206%20-%20Other%20Assets) [Note 7 - Deposits](index=111&type=section&id=Note%207%20-%20Deposits) [Note 8 - Other Short-term Borrowings and Long-term Debt](index=112&type=section&id=Note%208%20-%20Other%20Short-term%20Borrowings%20and%20Long-term%20Debt) [Note 9 - Shareholders' Equity and Other Comprehensive Income](index=114&type=section&id=Note%209%20-%20Shareholders%27%20Equity%20and%20Other%20Comprehensive%20Income) [Note 10 - Regulatory Capital](index=115&type=section&id=Note%2010%20-%20Regulatory%20Capital) [Note 11 - Net Income Per Common Share](index=116&type=section&id=Note%2011%20-%20Net%20Income%20Per%20Common%20Share) [Note 12 - Fair Value Accounting](index=117&type=section&id=Note%2012%20-%20Fair%20Value%20Accounting) [Note 13 - Derivative Instruments](index=121&type=section&id=Note%2013%20-%20Derivative%20Instruments) [Note 14 - Commitments and Contingencies](index=126&type=section&id=Note%2014%20-%20Commitments%20and%20Contingencies) [Note 15 - Share-based Compensation and Other Employment Benefit Plans](index=128&type=section&id=Note%2015%20-%20Share-based%20Compensation%20and%20Other%20Employment%20Benefit%20Plans) [Note 16 - Income Taxes](index=130&type=section&id=Note%2016%20-%20Income%20Taxes) [Note 17 - Segment Reporting](index=133&type=section&id=Note%2017%20-%20Segment%20Reporting) [Note 18 - Condensed Financial Information of Synovus Financial Corp. (Parent Company only)](index=135&type=section&id=Note%2018%20-%20Condensed%20Financial%20Information%20of%20Synovus%20Financial%20Corp.%20(Parent%20Company%20only)) [Note 19 - Subsequent Event](index=136&type=section&id=Note%2019%20-%20Subsequent%20Event) [Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure](index=137&type=section&id=Item%209.%20Changes%20In%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This section states that there have been no changes in or disagreements with accountants on accounting and financial disclosure [Item 9A. Controls and Procedures](index=137&type=section&id=Item%209A.%20Controls%20and%20Procedures) Synovus' management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2023, with no material changes in internal control over financial reporting during the fiscal quarter - Synovus' management, with CEO and CFO participation, concluded that disclosure controls and procedures were **effective** as of December 31, 2023[685](index=685&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal quarter ended December 31, 2023[686](index=686&type=chunk)[689](index=689&type=chunk) - Management assessed and concluded that internal control over financial reporting was **effective** as of December 31, 2023, based on COSO criteria[687](index=687&type=chunk) [Item 9B. Other Information](index=137&type=section&id=Item%209B.%20Other%20Information) This section states that there is no other information to report [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=137&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This section states that disclosures regarding foreign jurisdictions that prevent inspections are not applicable to Synovus Part III [Item 10. Directors, Executive Officers, and Corporate Governance](index=138&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) This section incorporates by reference information from the Proxy Statement regarding the election of directors, executive officers, Section 16(a) reports, and corporate governance matters, including Synovus' Code of Business Conduct and Ethics - Information on directors, executive officers, and corporate governance is incorporated by reference from the Proxy Statement[693](index=693&type=chunk) - Synovus has a Code of Business Conduct and Ethics applicable to all directors, officers, and employees, available on its website[693](index=693&type=chunk) - The CEO made an annual certification to the NYSE, as of May 2, 2023, confirming no violations of corporate governance listing standards[694](index=694&type=chunk) [Item 11. Executive Compensation](index=138&type=section&id=Item%2011.%20Executive%20Compensation) This section incorporates by reference information from the Proxy Statement concerning director and executive compensation, including the Compensation Discussion and Analysis, Summary Compensation Table, and the Compensation and Human Capital Committee Report - Information on executive compensation, including the Compensation Discussion and Analysis and Summary Compensation Table, is incorporated by reference from the Proxy Statement[695](index=695&type=chunk) - The Compensation and Human Capital Committee Report is also incorporated by reference but is not deemed 'soliciting material' or 'filed' with the SEC[695](index=695&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=138&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section incorporates by reference information from the Proxy Statement regarding security ownership of beneficial owners and management, and also references Note 15 in the Financial Statements for details on equity compensation plans - Information on security ownership of certain beneficial owners and management is incorporated by reference from the Proxy Statement[696](index=696&type=chunk) - Details pertaining to equity compensation plans are found in Note 15 of the Financial Statements[696](index=696&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=138&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This section incorporates by reference information from the Proxy Statement concerning certain relationships and related transactions, as well as director independence - Information on certain relationships and related transactions, and director independence is incorporated by reference from the Proxy Statement[697](index=697&type=chunk) [Item 14. Principal Accountant Fees and Services](index=139&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) This section identifies KPMG LLP as Synovus' independent registered public accounting firm and incorporates by reference information from the Proxy Statement regarding KPMG LLP's fees and services, and the Audit Committee's policy on pre-approval - KPMG LLP, Atlanta, GA (Auditor Firm ID: 185) is Synovus' independent registered public accounting firm[700](index=700&type=chunk) - Information on KPMG LLP's fees and services and the Audit Committee's pre-approval policy is incorporated by reference from the Proxy Statement[700](index=700&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=140&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the consolidated financial statements and related reports incorporated by reference from Item 8 and Item 9A of this report. It also provides a comprehensive list of exhibits filed with the report, including organizational documents, specimen stock certificates, indentures, and various compensation plans - The consolidated financial statements and related audit reports from Item 8, and Management's Report on Internal Control Over Financial Reporting from Item 9A, are incorporated by reference[702](index=702&type=chunk) - A detailed list of exhibits is provided, including Restated Articles of Incorporation and Bylaws, specimen stock certificates for common and preferred stock, various indentures for debt securities, and numerous compensation plans and agreements[704](index=704&type=chunk)[708](index=708&type=chunk)[709](index=709&type=chunk)[710](index=710&type=chunk)[711](index=711&type=chunk)[712](index=712&type=chunk) [Item 16. Form 10-K Summary](index=146&type=section&id=Item%2016.%20Form%2010-K%20Summary) This section states that there is no Form 10-K summary [Signatures](index=147&type=section&id=Signatures) This section contains the required signatures of Synovus Financial Corp.'s Chairman of the Board, Chief Executive Officer, and President, Kevin S. Blair, along with other principal executive, financial, and accounting officers, and directors, certifying the filing of the report - The report is signed by Kevin S. Blair as Chairman of the Board, Chief Executive Officer, and President, and Andrew J. Gregory, Jr. as Executive Vice President and Chief Financial Officer, among other directors and officers[720](index=720&type=chunk)[723](index=723&type=chunk) - A Power of Attorney grants Kevin S. Blair and Andrew J. Gregory, Jr. authority to sign and file amendments to the report[721](index=721&type=chunk)

Synovus Financial Corp. (NYSE:SNV) Q4 2023 Earnings Call Transcript January 18, 2024 8:30 AM ET Company Participants Jennifer Demba - Director of IR Kevin Blair - Chairman, President and CEO Jamie Gregory - CFO Bob Derrick - Chief Credit Officer Conference Call Participants Jon Arfstrom - RBC Capital Markets Michael Rose - Raymond James Steven Alexopoulos - JP Morgan Brady Gailey - KBW Brandon King - Truist Securities Timur Braziler - Wells Fargo Christopher Marinac - Janney Montgomery Scott Russell Gunther ...

Fourth Quarter 2023 Results Forward-Looking Statements Management does not provide a reconciliation for forward-looking non-GAAP financial measures where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the occurrence and the financial impact of various items that have not yet occurred, are out of Synovus' control, or cannot be reasonably pred ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________ FORM 10-Q ______________________________ ☒ Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2023 Commission file number 1-10312 ______________________________ SYNOVUS FINANCIAL CORP. (Exact name of registrant as specified in its charter) ______________________________ Georgia 58-1134883 (State or other jurisdiction of incor ...

Summary of Synovus Financial (SNV) 2023 Conference Call Company Overview - **Company**: Synovus Financial (SNV) - **Market Cap**: $4 billion - **Headquarters**: Southeast United States, with a history dating back to 1888 in the textile industry - **Current Stock Valuation**: Trading at tangible book value and seven times earnings [1][2] Core Points and Arguments Organizational Changes and Resilience - Synovus has transformed significantly since the Global Financial Crisis (GFC), showcasing resilience and agility in uncertain times [2][4] - The bank has unified its brand since 2018, consolidating 29 individual brands into one, enhancing synergy and service delivery [5][6] Employee Engagement and Recognition - 91% of team members are engaged, ranking in the top 5% of all companies surveyed [6] - Recognized by Greenwich and J.D. Power for service and trust, indicating strong client satisfaction [7][11] Market Position and Growth Strategy - Synovus operates in a high-growth Southeast market, with population growth projected to be double the national average over the next five years [12] - The bank has seen a 13-14% increase in loans and deposits in faster-growing markets, shifting focus from slower rural markets [13][14] Financial Performance Metrics - Over the past decade, Synovus has achieved a 17% CAGR in PPNR growth and an 18% CAGR in EPS [14] - Core deposits per share have grown by 7%, and dividends have increased by 18% annually [14][15] Risk Management and Strategic Actions - The bank has proactively managed its risk profile by divesting certain loan portfolios and cutting expenses, resulting in a net positive impact on PPNR [15][16] - Focus on maintaining high capital ratios and reducing reliance on wholesale funding [16][31] Future Outlook and Growth Areas - Anticipated growth in C&I and specialty lending, with a focus on core deposits [18] - Plans to optimize the balance sheet while continuing to grow in prudent areas [19][30] - Expectation of margin expansion in 2024 as deposit costs peak [28] Fee Income and New Business Initiatives - Significant growth in fee income from capital markets and treasury solutions, with a doubling of capital markets fees over five years [22] - Wealth management services have seen a 70% increase in fee income over the last five years [23] - New corporate and investment banking unit expected to generate $20 million in PPNR in 2024 [24] Technology and Innovation - Continuous investment in technology, including AI initiatives to enhance client experience and operational efficiency [59][62] - Development of a banking-as-a-service platform with high demand from software vendors [26][27] Important but Overlooked Content - The bank's competitive advantage lies in its personalized service combined with technological capabilities, allowing it to maintain strong client relationships [36][37] - Synovus is actively monitoring credit quality, particularly in small business lending, but has a low exposure to high-risk segments [67][70] - The bank's strategy emphasizes not just product sales but building comprehensive relationships with clients to enhance profitability [22][44] This summary encapsulates the key points discussed during the Synovus Financial conference call, highlighting the company's strategic direction, financial performance, and market positioning.

Financial Data and Key Metrics Changes - The company reported a diluted EPS of $0.60 and adjusted EPS of $0.84 for Q3 2023, with net interest income of $443 million, down 7% year-over-year and 3% sequentially [53][45] - Total loan balances decreased by $674 million or 2% sequentially, impacted by the sale of a $1.2 billion medical office loan portfolio [24] - The common equity Tier 1 (CET-1) ratio ended the quarter at 10.13%, slightly above the targeted capital levels [23][60] Business Line Data and Key Metrics Changes - Core deposits increased by 1% or $432 million from the previous quarter, driven by a 23% increase in time deposits, while non-interest bearing deposits declined by 4% [55] - Loan growth is expected to be between 0% to 2% for 2023, with fourth quarter loan production anticipated to be similar to the third quarter [3] - Non-interest revenue was reported at $107 million, with adjusted non-interest revenue at $106 million, down $4 million from the previous quarter [46] Market Data and Key Metrics Changes - The average cost of deposits increased by 36 basis points to 2.31% in Q3, with a total deposit beta of 42% through the third quarter [44] - The company expects total deposit betas to reach 46% to 47% by year-end [28] Company Strategy and Development Direction - The company is focusing on optimizing its business mix and balance sheet, including the sale of its asset management firm, GLOBALT, to reallocate capital to higher returning fee income lines [15] - Discussions are ongoing to expand a partnership with GreenSky, which could provide additional revenue opportunities [16] - The company aims to maintain a strong capital position while navigating a volatile economic environment [23][60] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by higher interest rates and emphasized the importance of cost containment and balance sheet optimization [17] - The outlook for net interest margin (NIM) is expected to decline in Q4, stabilize in Q1 2024, and then expand due to fixed-rate asset re-pricing [29][32] - Management remains optimistic about the company's ability to grow core client businesses faster than the market [91] Other Important Information - Adjusted non-interest expense increased by 2% from the prior quarter, with a focus on maintaining expense discipline [21][56] - The company implemented a voluntary early retirement program, resulting in a nearly 4% reduction in headcount [49] Q&A Session Summary Question: Credit quality outlook and potential stress areas - Management discussed the normalization of credit costs and indicated that while there have been increases in non-performing loans, they remain manageable within expected ranges [71][70] Question: Update on initiatives and performance targets - Management provided updates on various initiatives, including the Maast banking platform, which has onboarded nine independent software vendors and is seeing significant interest [82][81] Question: Expectations for NIM expansion and risks - Management highlighted that Fed policy and deposit mix shifts are key risks to NIM expansion, with expectations for a gradual improvement in the coming quarters [126][128]

• Capital build and preservation is near-term priority given the uncertain economic outlook 12.45% 10.59% 10.89% 9.52% 9.63% 9.77% 9.86% 10.13% 3Q22 4Q22 1Q23 2Q23 3Q23 (1) 12.80% 13.12% 11.18% Common Equity Tier 1 Tier 1 Tier 2 | --- | --- | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------| | | NTM PPNR Impact | | Third Party Auto Loan Sale • Benefit to liquid ...

PART I. FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) Synovus Financial Corp.'s unaudited interim consolidated financial statements and detailed accounting notes are presented for the periods ended June 30, 2023, and December 31, 2022 [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased due to loan and deposit growth, with non-interest-bearing deposits declining, while shareholders' equity rose from retained earnings and reduced unrealized losses | Metric (in thousands) | June 30, 2023 | December 31, 2022 | Change | % Change | | :-------------------- | :------------ | :---------------- | :----- | :------- | | Total assets | $60,655,591 | $59,731,378 | $924,213 | 1.55% | | Loans, net | $43,882,299 | $43,272,929 | $609,370 | 1.41% | | Total deposits | $50,080,392 | $48,871,559 | $1,208,833 | 2.47% | | Non-interest-bearing deposits | $13,565,602 | $15,639,899 | $(2,074,297) | -13.26% | | Interest-bearing deposits | $36,514,790 | $33,231,660 | $3,283,130 | 9.88% | | Total liabilities | $55,847,823 | $55,255,577 | $592,246 | 1.07% | | Total equity | $4,807,768 | $4,475,801 | $331,967 | 7.42% | [Consolidated Statements of Income](index=8&type=section&id=Consolidated%20Statements%20of%20Income) Net interest income increased year-over-year, driven by higher interest income despite rising interest expense, with net income showing mixed results due to credit loss provisions and non-interest expenses | Metric (in thousands) | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | YoY Change | % YoY Change | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :----------- | | Total interest income | $759,143 | $453,772 | $305,371 | 67.29% | | Total interest expense | $303,612 | $28,384 | $275,228 | 969.65% | | Net interest income | $455,531 | $425,388 | $30,143 | 7.08% | | Provision for credit losses | $38,881 | $12,688 | $26,193 | 206.43% | | Total non-interest revenue | $112,276 | $97,266 | $15,010 | 15.43% | | Total non-interest expense | $307,181 | $282,051 | $25,130 | 8.91% | | Net income available to common shareholders | $165,819 | $169,761 | $(3,942) | -2.32% | | Net income per common share, diluted | $1.13 | $1.16 | $(0.03) | -2.59% | | Metric (in thousands) | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | YoY Change | % YoY Change | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :----------- | | Total interest income | $1,476,022 | $869,834 | $606,188 | 69.69% | | Total interest expense | $539,739 | $52,199 | $487,540 | 934.08% | | Net interest income | $936,283 | $817,635 | $118,648 | 14.51% | | Provision for credit losses | $71,035 | $24,088 | $46,947 | 195.07% | | Total non-interest revenue | $245,402 | $202,600 | $42,802 | 21.13% | | Total non-interest expense | $629,034 | $554,501 | $74,533 | 13.44% | | Net income available to common shareholders | $359,688 | $332,507 | $27,181 | 8.17% | | Net income per common share, diluted | $2.45 | $2.27 | $0.18 | 7.93% | [Consolidated Statements of Comprehensive Income (Loss)](index=9&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The company reported comprehensive income for both periods, a significant improvement from prior year losses, primarily due to reduced net unrealized losses on investment securities and derivative instruments | Metric (in thousands) | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | YoY Change | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | | Net income | $173,944 | $178,052 | $(4,108) | | Total other comprehensive income (loss) | $(105,848) | $(364,640) | $258,792 | | Comprehensive income (loss) | $68,096 | $(186,588) | $254,684 | | Metric (in thousands) | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | YoY Change | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | | Net income | $376,103 | $349,088 | $27,015 | | Total other comprehensive income (loss) | $46,942 | $(944,384) | $991,326 | | Comprehensive income (loss) | $423,045 | $(595,296) | $1,018,341 | [Consolidated Statements of Changes in Shareholders' Equity](index=10&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Shareholders' equity increased due to net income and positive other comprehensive income, partially offset by dividends and an acquisition of noncontrolling interest | Metric (in thousands) | June 30, 2023 | December 31, 2022 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Total Synovus Financial Corp. shareholders' equity | $4,782,528 | $4,475,801 | $306,727 | | Net income (loss) | $376,269 | $376,269 | $0 | | Other comprehensive income (loss), net of income taxes | $46,942 | $46,942 | $0 | | Cash dividends declared on common stock | $(111,038) | $(111,038) | $0 | | Cash dividends declared on preferred stock | $(16,581) | $(16,581) | $0 | | Acquisition of noncontrolling interest | $25,406 | $25,406 | $0 | [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating activities generated significant net cash inflow, while investing activities resulted in a net cash outflow, and financing activities provided net cash, driven by deposit increases and debt repayments | Metric (in thousands) | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | YoY Change | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | | Net cash provided by (used in) operating activities | $714,099 | $210,994 | $503,105 | | Net cash provided by (used in) investing activities | $(978,017) | $(1,971,710) | $993,693 | | Net cash provided by (used in) financing activities | $340,289 | $415,923 | $(75,634) | | Increase (decrease) in cash and cash equivalents | $76,371 | $(1,344,793) | $1,421,164 | [Notes to Unaudited Interim Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Interim%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures on Synovus' financial statements, covering accounting policies, asset and liability valuations, equity changes, and various commitments and contingencies [Note 1 - Basis of Presentation and Accounting Policies](index=13&type=section&id=Note%201%20-%20Basis%20of%20Presentation%20and%20Accounting%20Policies) Synovus' interim financial statements are prepared under SEC Form 10-Q and GAAP, with key updates including the Qualpay acquisition and early adoption of ASU 2023-02 for tax credit investments - Synovus acquired a **60% equity