John McDonald • Truist Securities

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CEO Fred Burke attributed stronger organic revenue growth to higher patient acuity and success with their plan optimization program, in addition to resident growth. CFO David Morris described the M&A pipeline as the strongest in five years but noted that 'human capital' is the primary governor on the pace of new acquisitions and greenfield startups.

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Chief Strategy Officer Stephen Young stated that while the deposit base has been optimized, costs are forecasted to rise slightly to fund anticipated loan growth. CEO John Corbett clarified that loan paydowns, which were unusually low in Q1, returned to more normal, slightly elevated levels in Q2, and this pace is expected to continue.

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CFO Michael Santomassimo outlined expectations for modest loan growth, with slight declines in mortgage offset by some growth in card and auto, and modest commercial growth primarily from the Corporate & Investment Bank. For total revenue, he noted supportive market trends for advisory fees. CEO Charles Scharf added that the NII outlook assumes only a small increase in the total balance sheet, with a focus on allocating capital to the markets business to maximize total returns, not just NII.

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CFO Michael Santomassimo explained that modest loan growth is expected, with some growth in card and auto, and modest commercial growth primarily from the Corporate and Investment Bank. CEO Charles Scharf added that the updated NII outlook reflects a strategic allocation of more balance sheet to the markets business, which generates fee income rather than NII, and that the company is focused on maximizing overall returns, not just NII.

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CFO Mike Santomassimo attributed the modest commercial loan growth primarily to increased utilization by larger clients in the commercial bank and some new client activity, noting it was mostly business-as-usual borrowing. He stated that venture capital results were impacted by mark-to-market losses and impairments due to market volatility, while trading had a decent quarter. He added that IB activity was led by debt capital markets, with M&A conversations remaining positive but dependent on policy certainty.

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EVP & Chief Credit Officer Anne Fortner attributed strong credit performance to the resolution of larger office relationships and a three-year low in NPL inflows. CEO Kevin Blair stated that while a favorable regulatory environment could increase M&A activity, Synovus's primary focus remains on organic growth to improve its valuation.

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CEO Brian Moynihan highlighted that the company's deposit growth has outpaced the industry since the pre-pandemic period and emphasized the strength of its consumer franchise, with average checking balances at $9,200. CFO Alastair Borthwick added that second-half expenses are expected to be flattish, with any potential increase being tied to revenue-related costs from strong performance in sales and trading or wealth management.

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CFO Alastair Borthwick explained that the reserve was set using the blue-chip consensus, which already reflected lower GDP growth, and that weightings were unchanged, resulting in a reserve positioned for a ~6% unemployment rate. He also confirmed the full-year expense growth outlook remains 2% to 3%, possibly at the higher end.

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CFO Alastair Borthwick confirmed that strong deposit growth allows the bank to reduce higher-cost liabilities like institutional CDs, which benefits the net interest yield. CEO Brian Moynihan stated that buybacks would likely continue at the current pace of ~$3.5 billion per quarter and that the bank is comfortable with its CET1 ratio of 11.9%, maintaining a buffer over its 10.7% requirement while awaiting final capital rule changes.

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Head of IR Tyler Craft highlighted strong momentum in the Asset-Based Lending (ABL) and equipment finance verticals. On CRE, Craft explained that the recent balance decrease was a positive sign, driven by significant upgrades and payoffs of classified assets. He noted that the new business pipeline for CRE is slightly down, which is expected given the current market dynamics.

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CFO Mark Mason confirmed that the improvement in card credit trends, including lower NCL and delinquency rates, is largely consistent with pre-COVID seasonality, giving confidence in the outlook. Regarding expenses, Mason affirmed the 2026 target but emphasized the primary focus is on achieving the 10-11% ROTCE and improving returns beyond that, which may require continued investment to capture sustainable revenue growth.

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CFO Mark Mason explained that the improvement in card credit, particularly delinquency behavior, is consistent with pre-COVID seasonality, which supports the current NCL guidance. He confirmed the sub-$52.6 billion expense target for 2026 is still the goal, but stressed that the firm will continue to invest to capture sustainable top-line growth, balancing expense discipline with strategic investment.

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CFO Mark Mason confirmed the firm is constantly working on capital optimization, citing improved revenue-to-RWA metrics in Markets and a focus on generating more U.S. income to reduce the DTA. CEO Jane Fraser stated that preparations for the Banamex IPO are on track for year-end, but the final timing could shift from 2025 to 2026 depending on market conditions and regulatory approvals, with the ultimate goal of maximizing shareholder value.

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CFO Mark Mason confirmed the 10-11% RoTCE target for 2026 assumes operating at their 13.1% CET1 ratio target. For credit, he expects branded card net credit losses to approach the 4% level over the year, with retail services remaining at the high end of its range. He noted that future provision builds would be driven by expected volume growth in USPB and macroeconomic model inputs.

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CEO Gunjan Kedia stated that the payments strategy is to balance margin and growth, with a new focus on the affluent transactor segment to boost fees. CFO John Stern added that disciplined expense programs generate savings that are being redeployed into growth initiatives and technology, shifting investment from 'defense' to 'offense'.

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President Gunjan Kedia explained that the payments reorganization aims to accelerate execution on the bank's 'interconnectedness' strategy by better aligning the business with consumer and institutional franchises. CEO Andy Cecere added that growth initiatives are underway across all business lines, highlighting momentum in payments, trust, commercial products, and retail. He emphasized that this broad-based revenue growth, coupled with disciplined expense management, is the key driver of the company's positive operating leverage.

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