SNV Q1 Deep Dive: Loan Growth and Deposit Mix Drive Solid Performance Amid Uncertainty

Regional banking company Synovus Financial (NYSE:SNV) reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 93.9% year on year to $593.7 million. Its non-GAAP profit of $1.48 per share was 17.9% above analysts’ consensus estimates.

Is now the time to buy SNV? Find out in our full research report (it’s free).

StockStory’s Take

Synovus Financial’s first quarter results reflected steady execution in a challenging environment, with management attributing performance to expanding net interest margins, disciplined expense control, and improved credit quality. CEO Kevin Blair emphasized that “funded loan production was the highest since fourth quarter 2022,” highlighting loan growth momentum despite broader economic concerns. Executives also pointed to lower provision for credit losses and active management of deposit costs as additional contributors to the quarter’s positive operating leverage. While management noted an uptick in client uncertainty due to tariffs and policy changes, they maintained that Synovus’ diversification and risk management efforts were key to navigating the landscape.

Looking ahead, Synovus’ guidance is shaped by expectations for moderate economic growth, continued hiring in key business lines, and a focus on core deposit and loan expansion. CEO Kevin Blair noted, “our outlook assumes more moderate growth conditions,” with an emphasis on building out middle market and specialty lending teams to support targeted loan growth. CFO Jamie Gregory highlighted that the bank’s balance sheet positioning and ongoing investments in technology and risk management will help mitigate potential headwinds from policy shifts and economic uncertainty. The company expects that its proactive approach to client engagement and balance sheet management will be crucial as it navigates a volatile interest rate and regulatory environment.

Key Insights from Management’s Remarks

Management pointed to strong net interest income, disciplined expense management, targeted hiring, and improved credit metrics as the main drivers behind Synovus’ first quarter results.

• Net interest margin expansion: Executives highlighted that effective deposit repricing and stable funding costs led to a 7 basis point increase in net interest margin compared to the previous quarter, supporting overall revenue growth despite a flat sequential net interest income result.
• Loan growth momentum: The quarter saw the highest funded loan production since late 2022, with particular strength in middle market, specialty, and corporate and investment banking lending. Management emphasized that loan pipelines are robust and that recent hires in relationship management should continue fueling growth.
• Expense discipline: Adjusted non-interest expense was flat compared to the prior quarter and down year-over-year, driven by controlled employment costs, project spend, and lower credit and fraud-related expenses. Management stated this discipline positioned the company well for operating leverage as revenue grows.
• Credit quality improvement: Net charge-offs declined to 20 basis points, with non-performing loans improving and allowance for credit losses decreasing slightly due to positive portfolio trends. Chief Credit Officer Anne Fortner noted upgrades in senior housing and continued stability in the multifamily commercial real estate book.
• Client sentiment and policy risk monitoring: Management acknowledged an uptick in client uncertainty related to tariffs and government policy changes, with 17% of surveyed clients expecting business activity to decline. The company has undertaken targeted outreach and monitoring to assess direct exposure and prepare for potential impacts.

Drivers of Future Performance

Synovus expects continued momentum in loan and deposit growth, but management is closely monitoring policy risks, interest rate movements, and client sentiment as key future performance drivers.

• Targeted business line expansion: The company is investing in new hires and expanding middle market, specialty, and corporate banking teams, expecting these segments to drive the bulk of loan growth. Management believes recent additions will help sustain above-market growth rates in these areas.
• Deposit mix optimization: Executives expect core deposit growth to come from money market and interest-bearing accounts, aided by proactive client outreach and product innovation. Management anticipates that maintaining a favorable deposit mix will help manage funding costs and support net interest margins.
• Uncertain policy and economic landscape: Management cited tariff-related uncertainty and potential government agency layoffs as risks that could weigh on client activity and credit costs. The company is utilizing technology tools and client surveys to track exposures and stands ready to adjust hiring and expense plans if economic conditions deteriorate.

Catalysts in Upcoming Quarters

In the coming quarters, our analyst team will monitor (1) whether Synovus can sustain loan growth momentum in its middle market and specialty segments, (2) how effectively the bank manages deposit mix and funding costs amid rate and policy volatility, and (3) the ongoing impact of tariff and government policy changes on client sentiment and credit quality. Execution on relationship manager expansion and technology-driven risk management will remain important indicators of future performance.

Synovus Financial currently trades at $55.74, up from $52.91 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).

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