Synovus Financial Corp.

Good morning and welcome to the Sunova second quarter 2022 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the call over to Cal Evans, Senior Director of Investor Relations. Please go ahead.

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. Kevin Blair, President and Chief Executive Officer, will begin the call. He will be followed by Jamie Gregory, Chief Financial Officer, and they will be available to answer your questions at the end of the call. Our comments include forward-looking statements. These statements are subject to risks and uncertainties and the actual results could vary materially. We list these factors that might cause results to differ materially in our press release and in our SEC filings, which are available on our website. We do not assume any obligation to update any forward-looking statements because of new information, early developments, or otherwise, except as may be required by law. During the call, we will reference non-GAAP financial measures related to the company's performance. You may see the reconciliation of these measures in the appendix to our presentation. And now, Kevin Blair will provide an overview of the quarter.

Good morning. Thank you, Cal, and welcome everyone to our second quarter earnings call. We're extremely proud of the accomplishments and the financial results we'll share this morning. They provide further proof points into the continued successful execution of our strategic growth plan while also continuing to demonstrate prudence as we prepare for the impacts of less certain economic conditions in the coming quarters. Our path forward was built with potential challenges in mind and a level of flexibility that allows us to adapt quickly as needed. Knowing that there is greater level of uncertainty ahead, we are balancing our growth objectives with a keen focus on safety and soundness. But as you'll see today, we're entering these unsettled times in a position of strength with a focus on exiting the other side as an even stronger, more agile company. We produced another strong quarter of loan growth while credit metrics are at historically low levels. Net income growth this quarter was driven by the expansion of interest income given the growth in loans and efficiently managing our asset sensitivity with low deposit betas on the rate hikes to date. As a result of another strong quarter performance, we believe we will perform at or above our stated guidance and loan growth and expect revenue to be considerably above our original expectations for the year. We are also making significant progress in the new business initiatives and our strategic growth plan, which we clearly outlined during our first quarter investor day presentation. Though it seems like that day was a long time ago and the environment is changing rapidly, Our commitment to execution is as strong as ever, and we feel very good about the progress we're making. First, MAST, our banking as a service platform, is progressing nicely as we began beta testing with our first integrated software provider client late in the second quarter. With a pilot solution in place, we can expect to continue testing and enhancing our functionality and capabilities throughout the rest of the year. we are targeting four to five additional software providers to pilot the solution by year end with a focus across various B2B segments. A broader rollout of the solution is targeted for first quarter 2023 with the $100 million revenue target still considered to be very achievable based upon the continued feedback and interest we are receiving. Second, the build out of our corporate and investment banking team has continued this quarter. The leaders of our FIG and TMC verticals are in place and a leader of our healthcare vertical recently accepted our offer to join the team. In total, we have hired 12 staff members, including credit, product specialists, and support personnel. In the third quarter, we plan to make a broader public announcement of these hires and also expect this team to begin adding new business to the balance sheet and income statement. In addition to MAST and CIB, we have a number of initiatives underway aimed at deepening relationships and serving as new sources of growth. In this vein, I am pleased that we have completed the final migration of our commercial clients to Gateway, our new commercial digital platform. We also have continued to add new treasury and payment solutions. International and FX capabilities, card services, and integrated receivables functionality are all being significantly enhanced, and we have a roadmap of new functionality that will complement our already robust set of offerings in the quarters to come. We are also enhancing our online account origination capabilities and adding analytics to better support our consumer bankers in proactively addressing the needs of our clients. Within our wholesale banking segment, we continue to be an attractive platform for new middle market bankers. Over the last two quarters, we have added five new middle market bankers in Florida, and this quarter we also added new leadership in the Nashville market. In addition, we continue to see traction in our restaurant specialty group with $200 million in loan growth this quarter and our recently built agent bank capability generated approximately $2 million in new fee income this quarter across multiple sub lines of business. Overall, the momentum in our core businesses is generating growth and strong financial performance. This success helps to fund and support the ongoing investment in new business initiatives, which will deliver incremental financial benefits in the quarters and years to come. Let me now transition to financial highlights for the quarter. Total revenue for the second quarter was $523 million, an increase of 7% year over year. When adjusted for PPP fees, total revenue increased 11% year over year. The increase was driven by NII growth, a result of continued strong loan growth, as well as margin expansion resulting from higher interest rates. Loans increased $1.2 billion, excluding PPP, or 12% on an annualized basis, with diversified growth across the wholesale, community, and consumer business lines, evidencing the strong momentum we have across all of our businesses and client segments. Commercial loans, again, served as the primary driver of growth, as second quarter funded production was up 41% year over year, with a 1% increase in line utilization supplementing overall growth. While today's economic outlook is trending more negatively, our underlying credit performance, as evidenced by our credit metrics, continues to trend positively. Our NPA, NPL, and criticized and classified ratios represent some of the lowest levels that we've experienced in some time. The performance of the loan book is largely a function of better diversification, high underwriting standards, and adherence to our discipline credit framework. It is also worth noting that at this point we remain cautiously optimistic on the short-term credit outlook and see that our clients are carrying unprecedented levels of liquidity into this more challenging economic environment. Speaking of liquidity, continued balance augmentation combined with account growth led to quality non-interest bearing deposit growth of $254 million in the second quarter. Over the last three years, we have grown non-interest-bearing deposits from 25% to 35% of our core deposit base. This ongoing remix will continue to pay dividends in the coming quarters as rates continue to rise. Our net interest margin expanded 22 basis points in the second quarter, with increases in short-term interest rates driving increases in loan yields, while prudent deposit pricing led to lower than expected deposit betas on a cycle-to-date basis. Our strong second quarter financial performance with adjusted earnings per share of $1.17, return on average assets of 1.27%, return on tangible common equity of 19%, and an efficiency ratio of 53.4% serves as validation that the team's continued strong execution and our success in meeting the needs of our clients is leading to profitable growth. Overall, we're very pleased with the current results. our continued momentum and our ability to focus on our longer term plans and objectives. Now I'll turn it over to Jamie to continue the overview of our quarter results in greater detail. Jamie.