Synovus Financial Corp.

Synovus reported GAAP and adjusted EPS of $1.48. Adjusted revenue increased 3% sequentially and 5% year over year, while adjusted noninterest expense rose 1% quarter over quarter and 3% year over year. Net interest margin was 3.37%, up 2 basis points sequentially, and adjusted noninterest revenue was $131 million, up 12% sequentially and 3% year over year. Period-end loans increased $888 million, or 2%, core deposits declined $788 million, or 2%, and average cost of deposits fell 4 basis points to 2.22%. Net charge-offs were $18 million, or 17 basis points, and nonperforming loans were 0.59% of total loans; the allowance for credit losses ended at 1.18% versus 1.24% in March. Preliminary CET1 was 10.91% and preliminary total risk-based capital was 13.74%. For 2025, Synovus raised adjusted revenue growth guidance to 5% to 7%, expects adjusted noninterest revenue of $495 million to $515 million, adjusted noninterest expense growth of 2% to 4%, period-end loan growth of 4% to 6%, and core deposit growth of 1% to 3%. Management said third-quarter noninterest expense should be around $320 million and net charge-offs should be relatively stable in the second half of 2025 compared with 19 bps in the first half.

Kevin Blair characterized the quarter as strong and said the company is executing well on its 2025 strategy, especially through accelerated relationship-manager hiring and broader client engagement. He emphasized that loan growth was broad-based, production was the highest since the third quarter of 2022, and client sentiment remained generally optimistic despite uncertainty around tariffs and geopolitics. His tone was confident and upbeat, but grounded in discipline around credit, talent selection and capital.

Jamie Gregory highlighted positive operating leverage: adjusted revenue rose 3% sequentially versus 1% expense growth, and 5% revenue growth year over year versus 3% expense growth. He pointed to a 2-basis-point NIM expansion to 3.37%, deposit costs of 2.22%, and a 50% deposit beta through the easing cycle versus a 40% to 45% guide. He also noted strong credit metrics, with net charge-offs of $18 million, 17 bps, NPLs at 0.59%, ACL at 1.18%, and capital at a record preliminary CET1 of 10.91%, while the company completed about $21 million of share repurchases at a weighted average price of $44.64 for 500,000 shares.

Analysts pressed on the strength and sustainability of loan growth, deposit mix, competition, fee income, capital deployment and the reserve build. Management said loan momentum reflected hiring, better pipelines and more activity across multiple segments, with third-quarter pipelines about 14% above the prior quarter and second-half growth expected to continue. On deposits, they said second-quarter declines were largely strategic, especially in public funds, CDs and broker deposits, and that seasonality plus core client growth should support the back half. They also said the reserve increase was mainly driven by Moody’s/macroeconomic unemployment assumptions, and that capital will be directed primarily to loan growth rather than buybacks.