Synovus Financial Q4 Earnings Call Highlights

22 Jan 2026, 19:26 by Mitch Edgeman · The Markets Daily

Pinnacle Financial Partners discussed fourth-quarter 2025 results and its initial outlook for 2026, emphasizing the completion of its merger with Synovus Financial (NYSE:SNV) on Jan. 1 and the company’s plans to scale Pinnacle’s operating and hiring model across the combined franchise. Management said the deal closed 160 days after announcement and that integration milestones over the last two quarters have positioned the bank to begin executing as a combined company, while operating on legacy platforms until a planned system conversion in the first quarter of 2027.

Merger integration and operating priorities

President and CEO Kevin Blair said the combined company’s strategic priorities remain centered on above-peer revenue, earnings per share, and tangible book value growth, supported by client service metrics and talent recruitment. Blair said teams have already begun adopting Pinnacle’s weekly “Monday morning sales and service meeting” rhythm across legacy Synovus markets, led by Chief Banking Officer Rob McCabe.

During the Q&A, Blair said the bank’s ability to originate new business is not “encumbered” while operating on dual systems through conversion. He said the future platform will be based on nCino and is expected to bring “new capabilities, new functionality, new products” and associated revenue synergies. For complex clients onboarded in 2026, Blair said the company expects to place them on the end-state platform to reduce the need for another conversion in 2027.

Standalone Q4 2025 results: Pinnacle and Synovus

Chief Financial Officer Jamie Gregory reviewed each company’s standalone fourth-quarter performance.

Legacy Pinnacle: Adjusted EPS of $2.24, flat sequentially and up 18% year-over-year. Net interest income rose 3% from the third quarter and 12% from the prior year, with a net interest margin of 3.27% (up 1 basis point). Period-end loans increased 3% quarter-over-quarter and 10% year-over-year, while core deposits grew 3% sequentially and 10% year-over-year. Adjusted non-interest revenue declined 6% from the third quarter but increased 25% year-over-year, driven by service charges, wealth management, and income from BHG; Gregory said BHG contributed $31 million of fee revenue. Adjusted non-interest expense was flat sequentially and up 13% year-over-year. Net charge-offs were $27 million, or 28 basis points, including a single non-owner-occupied CRE loan that represented 63% of charge-offs. CET1 ended at 10.88%.
Legacy Synovus: Adjusted diluted EPS of $1.45, flat sequentially and up 16% year-over-year. Net interest income increased 2% from the third quarter and 7% year-over-year, with a net interest margin of 3.45% (up 4 basis points). Period-end loans grew $872 million, or 2% sequentially and 5% year-over-year, driven by broad-based C&I lending. Core deposits rose $895 million, or 2% quarter-over-quarter. Adjusted non-interest revenue grew 6% sequentially and 16% year-over-year to $144 million; Gregory highlighted $16 million of capital markets fees, up 30% year-over-year. Adjusted non-interest expense rose 2% sequentially and 5% year-over-year, reflecting higher incentive payments and charitable donations. Net charge-offs were $24 million, or 22 basis points. CET1 ended at 11.28%, and Gregory said the company retired $200 million of subordinated Tier 2 notes in October and issued $500 million in December.

Gregory also said the combined organizations hired 41 new revenue producers in the fourth quarter, bringing total 2025 hires to 217 across both firms.

Balance sheet marks, capital expectations, and securities repositioning

Gregory said valuation marks on the Synovus book are expected to be finalized later in the first quarter and that the current estimated marks are generally in line with original merger expectations. He said those marks and other considerations are expected to result in a CET1 ratio of approximately 10% at quarter-end Q1, including $225 million to $250 million of first-quarter merger-related expense. He noted this estimate excludes legacy Pinnacle equity acceleration costs, which he described as capital neutral.

Since the close, Gregory said the company has repositioned the legacy Synovus securities portfolio by selling approximately $4.4 billion and purchasing roughly $4.4 billion of new securities with an average yield of 4.7% and estimated duration of 4.25 years. He said the transactions supported the Level 1 HQLA position, reduced risk-weighted assets, and eliminated about 98% of the purchase accounting accretion associated with the securities portfolio.

In response to analyst questions, management said rates have declined versus initial merger modeling, which has contributed to lower purchase accounting accretion (PAA) and loan marks than originally expected, while Gregory said the offset has been better-than-expected growth. Gregory also said approximately two-thirds of PAA is expected to come from residential mortgages, reflecting longer-duration marks.

2026 outlook: growth, margin, expenses, capital returns, and credit

Blair laid out the company’s first full-year outlook as a combined firm, anchored by continued hiring and expected portfolio consolidation from recently hired bankers. Management’s key 2026 targets included:

Revenue producer hiring: Goal to hire 250 total revenue producers in 2026.
Loans: Period-end loans expected at $91 billion to $93 billion, up 9% to 11% versus combined year-end 2025. Blair said 35% of growth is expected from financial advisors hired in the past three years, 35% from specialty verticals, and the balance from legacy market growth. The forecast assumes no change in utilization rates and does not assume changes in recent paydown/payoff levels.
Deposits: Total deposits expected to reach $106.5 billion to $108.5 billion, up 8% to 10%, driven by recruiting, commercial client growth, and specialty deposit verticals.
Revenue and margin: Adjusted revenue of $5.0 billion to $5.2 billion and net interest margin of 3.45% to 3.55%, reflecting purchase accounting benefits and fixed-rate asset repricing, partly offset by higher liquidity and headwinds from two expected 25-basis-point rate cuts.
Fees and BHG: Adjusted non-interest revenue expected at roughly $1.1 billion, including about $125 million to $135 million in BHG investment income, with growth attributed to treasury management, capital markets, and wealth management.
Expenses and synergies: Adjusted non-interest expense expected at $2.7 billion to $2.8 billion. Management expects to realize 40% (about $100 million) of annualized merger-related expense savings in 2026, noting the 40% is a timing shift versus prior expectations, while total savings targets remain unchanged.
Merger-related and LFI costs: Excluding legacy Pinnacle equity acceleration cost, the company expects $450 million to $500 million of the $720 million in non-recurring merger-related and large financial institution (LFI) expense to be incurred in 2026, compared with $64 million recognized in 2025.
Credit: Net charge-offs projected at 20 to 25 basis points for the year, consistent with combined 2025 performance. Management said it expects charge-offs to remain stable and did not cite any systemic deterioration.
Capital: Target CET1 ratio of 10.25% to 10.75% and a quarterly common dividend of $0.50 per share beginning in Q1.
Share repurchases: The board authorized a $400 million common share repurchase program. Gregory said the company is unlikely to repurchase shares in the first quarter and “unlikely” in the second quarter, preferring to accrete capital before reassessing later in the year.
Tax rate: Expected 20% to 21% in 2026.

On funding, management said if loan growth outpaces deposit growth, the bank would use wholesale funding to bridge the gap, and Gregory said this dynamic is embedded in guidance. On deposit pricing, management discussed deposit costs coming down with rate cuts and provided a combined-cycle deposit beta of about 48% to date, with an expected 45% to 50% beta for the remainder of 2026 under its base case.

Chairman Terry Turner said the combined company will continue to emphasize service, employee engagement, and alignment around revenue and EPS growth, describing those principles as central to Pinnacle’s historical performance. Blair closed by reiterating confidence in executing the integration and delivering on 2026 commitments while preparing for the planned Q1 2027 conversion.

About Synovus Financial (NYSE:SNV)

Synovus Financial Corp (NYSE: SNV) is a regional financial services company headquartered in Columbus, Georgia. The company offers a comprehensive range of banking and financial products to individual consumers, small businesses, and large corporations. Synovus operates through various business segments, including commercial and retail banking, mortgage lending, treasury and payment solutions, and wealth management services.