Synovus Financial Corp.

Good morning and welcome to the Synovus Quarter 2022 Earnings Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the 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 telephone keypad. 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 third quarter earnings call. I'd like to start today by acknowledging the impacts of Hurricane Ian on many within our geographic footprint. Many of you have experienced widespread and long-lasting destruction in the wake of this storm. The individuals and communities impacted by the storm have been in our thoughts, but more importantly, we stand ready and are already working to help with the recovery and rebuilding efforts. As a longstanding southeastern bank, we understand the importance of hurricane preparation to ensure the safety and soundness of our clients, our employees, and ultimately of the bank. To that end, a comprehensive client and employee outreach program, in addition to implementing network and operational safeguards, are the keys to appropriately navigating potential impacts of a storm. As the storm approached and passed, we fully implemented our business continuity plan with no disruptions to client account access throughout the storm. And we've conducted a comprehensive client outreach initiative beginning the day after the storm passed. To date, a low volume of deferrals have been requested by our clients, and we have confidence overall that our customer base has not experienced damage that will produce permanent financial stress, collateral impairment, or long-term business interruption due to the storm. We also continue to care for our team members, clients, and communities impacted by the hurricane. Through generous donations of our team members and company contributions to our Here Matters Disaster Relief Fund, we continue to help affected team members recover. We also made a significant contribution to the Florida Disaster Relief Fund to help with the long-term needs communities will face as they rebuild. Many of the leadership team joined me last week visiting our locations and team members in the Southwest Florida region. The words that resonated the most with me were resilience and perseverance. Everyone is helping one another and displays a passion and commitment to rebuild and return to a level of normalcy. Shifting to our third quarter financial performance, we're extremely proud of the accomplishments and results we released earlier today. This was driven by continued solid loan growth and strong margin expansion coupled with excellent credit metrics and a 50% efficiency ratio. In evaluating year-to-date performance, I believe the third quarter is indicative of the year. Strong loan growth, ongoing deposit pricing discipline, and prudent expense management have resulted in very strong net income and PPNR growth for the year. However, we know there continues to be economic uncertainty ahead. Therefore, we will prioritize and remain resilient around the key safety and soundness components, including capital, liquidity, and credit. Nonetheless, with the continued strong performance of our core businesses, as well as our new initiatives, which will begin to generate income, We feel certain we will perform well through this cycle and reach the other side as a stronger, more diversified company consistent with our longer-term top quartile objectives. Let me provide a brief update on some of our new initiatives, as I know Jamie will cover our core business performance story as he shares the quarterly financials. MAST, our banking as a service platform, continues to progress with beta testing of our first integrated software provider client. In fact, we expect to add a second client to beta testing in the fourth quarter and remain focused on an early 2023 official launch. With a pilot solution in place, we're enhancing testing functionality and capabilities throughout the remainder of the year. While we strengthen the product offering and expand the pilot into other B2B segments, we continue to recruit top talent to prepare for the launch and build out phases two and three of the product offering. We remain committed and confident to this opportunity, and our teams are working diligently to ensure we deliver a differentiated product early next year. In addition, we announced last week we continue to build out our corporate and investment banking team with coverage and credit product leaders onboarded for our healthcare services vertical, as well as our leader for debt capital markets. We've also closed our first transactions in the technology, media, and communications as well as the financial institutions verticals. With all of our vertical leads now in place, we expect to accelerate adding new business in the months and quarters ahead. We continue to make investments in our treasury and payment solutions that will serve as new sources of revenue and will roll out new analytical capabilities in the consumer business in the fourth quarter that will provide opportunities to strengthen and deepen existing relationships. We also continue to be pleased with one of our newest industry verticals, our restaurant specialty group. With $71 million in loan growth this quarter, this brings the portfolio to $545 million. I'm also happy to announce that we raised our base wage to $20 per hour in the third quarter, which we feel will offset some of the inflationary pressures felt by our team members and ensure we have a competitive compensation structure to continue to attract and retain talent. Overall, I believe we continue to execute exceptionally well in our strategic plan. The success is directly attributable to our 5000 plus team members who serve our clients and internal partners with a purpose. This continued focus on execution allows us to perform at a high level, regardless of the underlying economic conditions. I'm truly humbled and proud of what you do every day. Let me turn to slide three and our financial highlights for the quarter. Net income year over year was up 9%, led by total revenue for the third quarter of $582 million, an increase of 16% year over year, and 11% quarter on quarter. The revenue increase was driven by NII growth, a result of continued healthy loan growth, and a 27 basis point expansion in net interest margin. PPNR was $288 million for the quarter, an increase of 24% year over year, representing the highest level seen in over 15 years. This performance led to adjusted EPS of $1.34, return on average assets of 1.39%, and return on tangible common equity of 21.4%, as well as an efficiency ratio of 50%, all representing excellent operating metrics, which serves as validation of the team's continued execution. loans increased 1.4 billion dollars or three percent quarter over quarter with diversified growth across all segments commercial loans again served as the primary driver of growth it is reaffirming to see loan growth in all of our business units again this quarter leading to our fifth consecutive quarter of double digit loan growth deposits decline three percent quarter over quarter driven by balance balance diminishment and rate bearing balances As we have shared previously, our clients continue to maintain average balances that are higher than pre-pandemic levels. However, during the third quarter, we saw a decline in average balances as clients utilized their cash in business-related investments and commercial and consumers sought higher return alternatives. Despite the diminishment, net production has continued to increase, and we remain focused on our efforts to grow deposit relationships over time. Our underlying credit performance continues to trend positively as our NPA, NPL, and criticized classified ratios remain stable, and quarterly charge-offs drop to historically low levels. As we have noted before, the performance of our loan book is a function of portfolio diversification and a strict adherence to our disciplined credit framework. We remain cautiously optimistic on the near-term outlook for credit. Lastly, capital ratios remain consistent quarter over quarter, representing both our strong earnings and our focus on deploying capital to client loan growth. Now I'll turn it over to Jamie to continue the overview of our quarterly results in greater detail. Jamie? Thank you, Kevin.