Brady Gailey: Maybe just to ask the net interest margin question a little bit, on your last quarter, we talked about NII dollars growing basically in sync with the loan growth in 2023. Is that still the right way to think about spread income dollars?
Jamie Gregory: As we look at NII, looking through the full-year of 2023, I would just call it uneven as we progress through the year. Our base case for NII in the first quarter is for it to be similar to what we just experienced in the fourth quarter, outside of the impact of day count. And so, for that, for us that’s about $10 million. But as we progress through the year, there are just a lot of uncertainty with monetary policy, competitive pressures on deposit pricing, and the timing lags. So, as we look at the full-year compared to Q4 annualized, there are scenarios where you could have NII increasing. And that would be driven by loan growth timing lags, betas at the lower end of our guidance. And our guidance hasn’t changed through the cycle of 35% to 40% total deposit beta, but — and the converse is true to that, faster repricing, higher deposit betas would obviously be a headwind.
But again like I just mentioned in the response on Steven’s question, we do think that the pressures from deposit cost are going to really be the highest in the first-half in the year, but then we have those tailwinds that’ll flow through in the second-half of the year.
Kevin Blair: And Brady, I’ll just — I’ll state the obvious, I mean you see it in the ’23 guidance, but revenue growth of 8% to 12% obviously exceeding that of loan growth. So, for the full-year, Jamie is talking about relative to the fourth quarter, but full-year, margin will expand 22 to 23. So, NII would actually be growing at a faster pace than what loans would be growing.
Brady Gailey: All right, that’s helpful. And then my follow-up, as I look at last — you had the Investor Day, you ramped up service forward, you had the new initiatives from the corporate and investment bank, and also Maast, like there was a lot of new things announced. But as you look at 2023, will Synovus continue to be announcing some new initiatives or is this more a, “We have what we have, and it’s time to execute?”
Jamie Gregory: So, look, I think, Brady, you always have to have an eye on the future in looking for new sources of revenue. So, I’m sure that we’ll have some new ideas and things that will begin to develop and initiate on, but we had in the back of the document, this is really a year of focused execution. We believe that we’ve made tremendous progress in core businesses and focusing on productivity gains and ensuring that we’re getting full share of wallet. I was really pleased to see, as I said on the prepared remarks, when you look at our deposit production in the fourth quarter, total deposit production was about $2.5 billion. It’s the first quarter I can remember that deposit production outpaced loan production. We only had $2.2 billion in loan production.
And so, there is opportunities to continue to focus on our core businesses to ensure that we’re getting fulsome relationships and that we’re delivering the highest level of value to our clients and profitability. The second part of that is making sure that some of these initiatives that we kicked off during Investor Day deliver. Obviously, in our expense guide for ’23, we have a considerable amount, about 40% of the growth tied up with current initiatives. And we believe that that’s prudent to continue to invest there given that, as we look at ’23, and ’24, and even ’25, the amount of revenue that’s going to be produced by those initiatives will more than offset the expense and be a major driver in top line growth. So, we want to make sure we deliver on those.
But we have a sandbox, and we need to think about what are the new items that we uncover as opportunities to generate growth or efficiencies, and that’s what we really talk about Synovus Forward. We’re not going to do a Synovus Forward 2.0. But what we try to do is embed in our culture the idea of coming up with better ideas to both drive new sources of revenue and define new efficiencies. And that’s just something that we have to do going forward given the economic volatility and challenges that we’ll face.
Brady Gailey: Okay, got it. Thanks, guys.
Operator: Thank you. Our next question is from the line of Michael Rose of Raymond James. Your line is now open. Please go ahead.
Michael Rose: Hey, good morning, guys. Hope you’re doing well.
Kevin Blair: Doing well.
Michael Rose: Just wanted to touch on the — okay, thanks, yes, just wanted to touch on the dividend increase, I think that was probably a little bit larger than I would have thought. And I saw that you — looks like you’ve approved a $300 million share repurchase program. Just wanted to get some details around that and how active you plan to be as we move through the year, just given that you’re within your CET1 range? Thanks.
Jamie Gregory: Yes. As we think about the dividend policy, we try to pay out 30% to 40% of earnings to the dividend, and we think that’s a good place to be, we think is what is right for our shareholders. But we really want to make sure that we’re retaining as much capital generated through earnings for core client growth. And we believe that that gives us that flexibility, you know, scenarios, in scenarios where rates decline and the world changes, as well as scenarios where we continue to grow and that economy remain strong. So, that’s how we think about. With regards to the share repurchase program, that’s the same approval as we had in 2022. And as you know, in 2022, we repurchased only $13 million in shares, but our expectation is that loan growth will be slower in 2023.
And we’re starting the year at a higher CET1 ratio, closer to the high end of the range. So, as we progress through this year, we are going to monitor our capital ratios. We are comfortable where we are. And as we get to the top end of our range, as we — to 975, we are going to revisit our share repurchase strategy, and that’s a point where you may see us out in the market buying shares.
Michael Rose: Okay. And just to be clear, that’s a program just for this year, right, the $300 million?
Jamie Gregory: That’s right.
