Yep. Alrighty. Give us a sec. Awesome. Well, up next, we have the Pinnacle and Synovus team, you know, joining us for the fifth or sixth time for some of us, while others it's joining us for the first time. I think it's safe to say this group has probably had the busiest year of any company here, announcing their transformational merger of equals in July, where they recently received regulatory approval and are on target to close early next year. Once the deal closes, Kevin Blair will be the CEO of the combined company. Kevin, welcome back. Also joining us for the first time, Terry Turner, who is CEO of Pinnacle and become chairman of the combined company. So, you know, with that, you know, today's presentation's gonna be a fireside chat.
I'm sure most of you saw that company had a handful of slides out yesterday. So, we'll be going over some questions that'll likely reference some of those slides. So welcome, and glad you guys are here.
Thank you. Thanks.
So, Kevin, Terry, you know, you've met with a lot of investors over the past four months or so since the deal was announced. Which of their key concerns do you think you've largely been able to sufficiently address? And which key concerns do you think are still out there that are weighing on the stock at this point?
The story. Well, I think, you know, in terms of reservations from the announcement and so forth, I think the biggest overarching concern is, "Hey, this is just gonna be Truist 2.0. We're gonna destroy a lot of value here in a merger of equals and so forth." That's been the thing that we've spent a lot of time addressing. What's important here is we spent time addressing it before the announcement. So, at least my judgment, we had a leak, so we had to sort of bring it out from 10 yards deep in the end zone here to sort of get the message out. I think the message is really pretty simple.
What distinguishes this transaction is all the work Kevin and I did, at the outset, which was to make decisions like, "What's the go-to-market strategy?" And there are some banks that have been through MOEs that, in my opinion, cannot tell you today what the go-to-market strategy is. They're not sure if they're trying to be BB&T or SunTrust or some combination or Wells or J.P. Morgan or whatever. For us, we agreed early on before we got very far into the negotiation that, you know, we're gonna use the Pinnacle model. That's what we're gonna use. And that's an important decision 'cause it's helped us accelerate our execution here. I think people will be surprised by that. One brand. Some of these folks have thrown both brands out. They gotta win a new brand for everybody, not for us.
We're sticking with the Pinnacle brand 'cause we're running the Pinnacle model. I would say the most important thing that we have tried to help people see, and I think people are beginning to get it, a lot of the value destruction in the other transaction had to do with not declaring a long-term CEO. And so you get somebody running in this direction for a while, somebody running in that direction for a while. It destroyed the loyalty of associates and of clients. And of course, we were beneficiaries of that. We did the hard work to say, "We-we-we gotta have one long-term CEO." I don't mind telling you I didn't show up at Kevin's door saying, "Hey, I'm like I wanna get out of being the CEO. That would suit me just fine to run this company." But I'm convinced that's a sure path to destroy value.
And so we said, "We're gonna have one long-term CEO." And of course, once you cross that bridge, that's not hard. You go with the 54-year-old instead of the 70-year-old in that choice. Same thing with systems. A lot of these deals, they throw out systems. It creates great risk 'cause now you gotta reconvert, retrain every associate, every employee. We chose right from the start, we'll go with FIS, which is the platform that Synovus runs. We know it's the most scalable system to run. And so because we made that choice, all these other choices going down through here have been easier. So I think that's the biggest message that we've had to push back on and try to change people's mind. My sense is we're making headway, but we'll see.
That's super helpful. I guess, Kevin, you know, as you'll be running the day-to-day, what do you see as the biggest execution risk for the transaction? I guess up until this point, obviously, we haven't fully closed, but what has been more challenging than expected, you know, as we move into the next integration period?
Ryan, we've talked a lot about this, and Terry referenced it. When you think about why other MOEs have failed, the number one factor is generally overlapping markets.
Mm-hmm.
You've seen that from some of the recent studies that were published in Bank Director. The good news is, as Terry said upfront, we looked at our markets, and we only had 11 markets that were overlapping, of which 6 were both sides had similar scale, which only represents about 6% of the pro forma deposit. So that shouldn't be an issue. Maybe, you know, for me, the challenge is, and we've used the terminology that culture eats strategy for breakfast. To Terry's point, maybe the questions I've heard is you have this fast-growing Pinnacle Bank that has been highly successful for 25 years, and you're now gonna merge with Synovus, which is slower growth. How are those two gonna function together? Do they have different cultures? Can they coexist?
I think what was important when Terry and I met back in May of this year, the first thing we talked about was not doing a deal. We talked about what our philosophy has been in terms of building our banks. Terry, over 25 years, me sitting in the seat for 4 years, and what was incredibly gratifying for me is that Terry talked about creating a best place to work, which really is shown through their recognition in being a best place to work, but through their team member engagement scores. They have 93% team member engagement. He also talked about creating a loyal client base, and you look at we've been bragging on Terry all day today. The third-quarter numbers came out from Greenwich on the commercial side with an 84 Net Promoter Score. I've never seen that before.
That means, you know, it's an incredible score that the clients are saying that Pinnacle has created a unique experience for them. Well, if you go back and look at our investor day four years ago, we said we wanted to do the same thing. We wanted to create an environment at Synovus that was the best place to work. Our engagement scores are now up to 89%.
Mm-hmm.
So we're moving in that direction. We said that we have to create a loyal client base. And last year, J.D. Power, we moved up 11 points, the highest of any bank in the top 50. And our Net Promoter Score sits 3rd in the Southeast, and it was up 3 points this quarter in Greenwich. So Terry and I said, "Well, gosh, it looks like we're trying to do the same thing." The one difference that we have not been doing is adding producers at the pace that Pinnacle has been adding. And so we've spent the last 6 months since that meeting up through this past week working on what it's gonna take to make Synovus grow at the same pace that Pinnacle's been growing.
And it really comes down to the hiring model, the hiring model that Terry has installed and proven time in and time out, adding 130-150 resources every year. And not just adding them, but also on the other side, retaining them. And so I'm excited. I've told Terry I've been a student in the game. What they've done is phenomenal. We'll be able to execute on that. I think our companies are way more aligned than they are different. And so as we are able to do that, Ryan, I think you're gonna see that our growth rate will triangulate around something that Pinnacle's been able to do for some period of time.
That's why in our deck yesterday morning we provided the balance sheet growth showing 9%-11%, both on the loan and deposit side, because we see that energy on our side, and we see the ability to accelerate the growth trajectory.
Before we get into some of the new targets and guidance that you guys put out, I just wanted to touch on one more question. Obviously, business development's a huge part of your model and now the consolidated model. I think Rob McCabe had committed to being your Chief Banking Officer for another year. Maybe just talk about, given the importance of it, the process of replacing him. You know, do you have a candidate for a successor? What are you looking for? Will it be internal?
Yeah.
Or external? And when do you think we should hear from you guys on this?
Ryan, I think that if Rob were here, he would tell you, you know, that he has signed on for a year as the Chief Banking Officer, but he's also signed on for three additional years as an advisor to me and the company. One thing you guys should know is with both Terry and Rob, these individuals built this bank. They are founders. Whether they have a one-year contract, three-year contract, they are friends for life. I think they'll do whatever it takes to make the bank successful.
What I asked Rob to do in this first year is to install the Pinnacle model, is to go and set over top of our businesses, both geo-geographic businesses as well as the specialty businesses, and instill those qualities that have made Pinnacle so unique, both from a client service standpoint but also from a hiring standpoint. So we've spent the last several months already doing that. So we're not gonna enter January 1st, thinking, "How are we executing in 2026?" Rob has already instilled those qualities. We've built a plan. People will execute that on January 1st. For the full year of 2026, I've told Rob the goal is to go ahead and identify his successors. It may not be one person. It may be multiple individuals. We've already started that process.
He acknowledged that there is ample talent within the company to be able to do that. I have been blown away by some of the individuals I've met on the Pinnacle side. I think Terry's met some of our bankers on the Synovus side. I think we have a very deep bench on the revenue producers, the leaders that lead that group to be able to replace Rob, but as I said, replacing Rob on a functional org chart is one thing. We're not gonna lose his support. We're not gonna lose his guidance, and that will stay on for four years.
Got it. So, Kevin, you referenced the 9%-11% loan and deposit growth for 2026. Obviously, seems like a little bit of an uptick from the individualized run rates. Maybe just break down how much is coming from each of the legacies. What are the main areas driving growth, growth including organic and from recruiting? And lastly, can you sustain these type of growth rates over the medium term?
Yeah. So if you just think about it and you try to take it at a granular level, I would just suggest that Pinnacle's been growing a 5-year CAGR about 12%. So assume that that would continue on the Pinnacle side. And so if you're backing into the math to get to 9%-11%, you would say that Synovus would have to grow roughly 8%. Now, if you look at our 5-year CAGR, it would show something around 3%. But that's largely because we've been optimizing the balance sheet over the last four years, selling a medical office portfolio, downsizing some other asset classes that we wanted to minimize. I think our more organic growth has been somewhere around 4%-5%. So that means that Synovus, to be able to get to this 9%-11% next year, we've gotta step up our game.
That's gonna come from a couple different things. Number one, as you've seen in the slide, we've been successful at adding revenue producers this year. We're already on that treadmill, and those individuals are already coming on. They've come on this year. They're gonna produce growth next year. Number two, Terry and I have given other examples on the revenue synergy slide that both companies have specialties that the other company didn't have coming into this integration. Things like equipment finance or dealer finance, those are areas that Terry and his group have built out. They've grown rapidly within the Pinnacle model. We're gonna turn those groups loose in our footprint and be able to sell those assets or sell those products into our banking units. Just for example, with equipment finance, we had an outsourced partner we would refer that business to.
Anytime you gotta refer a loan outside the bank to a third party, it's just not a good relationship, so I'm excited to have the equipment finance team in footprint working with our teams. They're already syncing up with our bankers to make sure that they're gonna offer those products January 1st, but that's the second leg of the stool. The third, I would say, we've recognized that payoff activity has been a headwind for some of the growth we've had this year and last year. We believe that's moderating, and I'm not when I say moderating, I don't think payoff activity's going down greatly, but it's staying flat. At the same time, our production levels continue to increase. We're up 52% in funded production this year, and we expect that to continue.
So as production ramps up and that moderates, stays the same, you're gonna see greater growth from the production that we've enjoyed. And then maybe the wild card will be, we think that interest rates are obviously largely correlated with line utilization numbers.
Mm-hmm.
As interest rates come down, and we expect that to continue, we think we'll get some tailwind from line utilization, which we haven't had for some time.
So maybe to dig in a little bit more on the revenue synergies, you gave a ton of color on the slides on 100 to 130. Talk about the timing of these. And is this different from? Is this coming from the existing employee base? Do you need to add more hires to achieve this? And maybe talk about what's coming from each side to drive this.
It's both, and that's why, you know, we've got a couple questions today. How much of this would be embedded in the guidance? All this will be embedded in the guidance when we get to.
January.
Fourth-quarter earnings call in January, and we're one company. Jamie and his team will put out full-year guidance for 2026, and so you won't have to wonder whether we're giving balance sheet guidance and is the.
Mm-hmm.
Is the revenue synergies on top of that? Does it include it? So we'll be very specific there. But if you look at those buckets, the first bucket we call the low-hanging fruit because it's the model we're gonna run. We're gonna be adding bankers at a faster pace, and that's gonna drive incremental loan growth and revenue growth. We also believe that there are hold limit increases on individual clients as well as portfolios. We know at Synovus, we've kinda anchored the size of our structured lending division and our senior housing division at existing levels with a bigger balance sheet. Now we can open up the growth in those asset classes. Those we say are low-hanging fruit. They're hard to do, but they're within our model. The rest are a lot of products and capabilities that both sides bring to the table, whether that's capital markets.
We look at each side and we say, you know, at Pinnacle and Synovus, what percent of the variable-rate loans are produced with a swap? Well, when we see differences, we say if we just normalize that in the company, it's gonna result in incremental fee income. When we look at the amount of debt capital markets revenue we get from an existing public company that's in capital markets, we look at that and we try to equalize it. So it's really about looking at our capabilities, using some estimate or benchmark to say if both sides execute in a similar fashion, it's gonna translate into incremental growth. The last piece is where we just introduce brand new products. So like at Synovus, we have an FX product, foreign exchange, that Terry and his team doesn't have today.
Introducing that to the two of the financial advisors, they'll be able to sell those products. That $100-$130 million we believe will flow in over two to three years. It will be included, obviously, in our guidance. We think that there's probably more outside of that. Those are the revenue synergies that we'll find as we start to operate. These were the ones that were obvious to us when we looked at the portfolio of products and solutions and the differences in performance that if we move towards a similar level of performance, it would generate that sort of upside.
So a question for both of you. So you put out revenue producer hiring targets, almost 500 incremental employees over the next two years. Terry, for you, it looks more like business as usual. Kevin, for you, it looks like we're gonna have a bit of an uptick. So maybe for the both of you, just talk about what are some of the key areas or geographies you'll be hiring in, how do you ensure hiring this many people and bringing the culture together, and how do you maintain that industry-leading growth, manage the culture, and bring in all these people?
You want me to go first?
Sure.
Yeah. So it's probably important just to think through what the hiring model is. So how does all this come about? We run a methodology where it's a continuous recruitment cycle. We're always trying to hire the great bankers in the market. If you take a market like, Kevin, I'll tell you, Jacksonville, Florida, we're using the Pinnacle person to run that market. First meeting he has with Kevin, he says, "Look, there are 140 relationship managers in this market. I know which ones I'm interested in." And so I recruit those people on a continuous basis. I'll hire them all when I can, you know, and.
Mm-hmm.
Take time to get them in and so forth. The way he comes up with that list is these are people that either he knows or people in his company know, and they have said that person's good at what they do, and they will fit in both of those things. When you use that methodology, it's markedly different than people that are using a headhunter to hire people.
Mm-hmm.
People using a recruiting department to hire people, people that are hiring folks that come in to fill out applications and so forth. It drives up the certainty that you're gonna get somebody that's gonna move that book of business to you.
Mm-hmm.
So that's, that's a really important element. Secondly, we always have a requirement for at least 10 years experience. On average, the experience is 18 years for the people that we hire. So when you think about that phenomenon, the people been handling a book of business for 2 decades, they can move it quickly.
Mm-hmm.
So you get rapid asset growth, and it produces great asset quality 'cause they know the credits that they're moving. They also know which ones are bad, and they leave those behind. It's the opposite of adverse selection.
Yep.
So that's sort of the methodology for how the growth occurs. What we found over a period of time is that you generally get a similar loan and deposit or asset and liability growth out of those people, and it comes generally over a five-year period of time, roughly on a straight-line basis. So that's sort of how the economics of the hiring goes.
Yeah.
The case is when you run this model of hiring people, every people have been saying to me for 20 years.
Yeah.
At least, "Terry, surely you've hired all the people that you can hire, right, Rick?
Mm-hmm.
The case is, the more people that you do hire, the more people you can hire because of what I talked about on this networking and so forth.
Mm-hmm.
So, again, you know, people talk about, "Well, how are you gonna you know, are there enough bankers in the market for you to hire?" And honestly, it almost seems like an absurd question to me. When you look at the Southeast, well, our combined Southeastern footprint, we'll have about 6% share. Bank of America. I'm talking about businesses, not consumers.
Mm-hmm.
Businesses will have about 6%. Bank of America, maybe 7%, Wells Fargo maybe 8%, Truist 10-ish%, or something like that. Those three banks that are bigger than us are vulnerable. They have high turnover rates, and they've got large attrition rates. So not to be trite, but it's a little like the gift that keeps on giving. I mean, my belief is we'll continue to hire in that pool. It's not the only pool we hire from, but we'll continue to hire in that pool, so.
And look, to Terry's point, I mean, we've installed this model. We used a statistic, Ryan, a couple quarters ago. We said when we looked at the original math, it looked like Pinnacle had 2,570 revenue producers to Synovus' 270. And so just put that in perspective, similar-sized banks, they got 2.1 times the number of revenue producers. So imagine Terry taking his model, applying it to our 270 revenue producers. We have Synovus. They all know folks.
Yep.
The difference in the model in the past is I would've. It's on me. I would've given them a budget that said, "In Atlanta, you get four FTEs. You have to add. And in Orlando, you get three." This new model is, "Look, in Atlanta, our new leader in Atlanta, Charley Clark, we're like, 'Go find every great banker,' just like we're doing in Jacksonville. If there are 140 there, that means Atlanta's probably got 250. Find the best of those 250 who you wanna hire, and let's go hire them." So, our team is in a place to be able to do that. And in the markets that you asked for, it's really no specific market. I joked with Terry last week. I said, "Maybe there's one market we wouldn't wanna add in.
It's Nashville because they control the market." And I think he added a new resource there last week. So, it shows me that, I don't know. But in markets like Atlanta, there's opportunity for density. In markets like Orlando and Tampa and South Florida, huge opportunity. And then I look at some of the markets that Terry's recently expanded into, like Richmond and DC. There's tremendous opportunity there. And imagine in the state of Virginia, if you can go down into Hampton Roads and that area, they're already in Roanoke. So there is enough opportunity for us to be adding for the foreseeable future. And that's just complemented by the fact that in Synovus, we haven't had the density in the past. So you go into our markets and put a similar density, and you're gonna see good growth.
I guess, you know, so for Terry, he's been running this model for a while. Obviously, it's gonna be a change for a lot of the, the legacy Synovus people. And historically, both institutions, I think, had low attrition. But Kevin, how did you assess the risk of higher attrition? You know, someone decides they don't wanna be part of this large organization. They don't wanna be part of this model. Yeah.
I'm sure Terry's gonna tell me reasons why that'd be crazy. But maybe you can just fill us in on how you guys thought about this when the deal came together.
You know, it's a great question because I think, back to your first question on what people were most concerned about. They said, "Gosh, you're gonna take these two banks and put them together. And where you guys have been the hunter, you're now gonna be the hunted," right? And I think what people are missing is both banks ran an anti-big bank model. And when I say anti-big bank model, it's not we're anti-bigger balance sheet. What we're anti is becoming a bigger bank and losing your soul. And what I would suggest to you is that we're trying to build a bank with scale.
Yeah.
But maintain our soul because as the banks get bigger, what you lose sight of, and, and Terry referenced it, those big banks that have all the market share, their Net Promoter Scores are 20-40. I mean, they're way down there. They're, they're forgetting what got them there, which is creating a work environment that attracts the best talent and creating an environment that creates a client experience that's unparalleled. So what we said is, "Look, if both of us are striving to create a unique environment where people wanna work and we both wanna create a client experience that's second to none, what banker doesn't wanna work at that bank? Because we're gonna be bigger, and now we're gonna have the capabilities and functionality that are, enabled or that we, we are enabled to, to be able to go and invest in because we're a little larger.
If we maintain who we are, we maintain that soul, then this is a winning proposition. Now, if we go out there and become a Cat 4 bank and start acting like the rest of the Cat 4 banks.
Yeah.
With, as we've seen from their Net Promoter Score, this is a bad outcome. And that's where Terry and I, from day one, said that cannot be the outcome. We have to be.
Yeah.
Very thoughtful. As we become an LFI institution, it means that all of the rigors that come with that regulatory process cannot be passed down and create a bunch of bureaucracy and red tape for our bankers.
Mm-hmm.
'Cause that's a recipe for disaster. So we went in with eyes wide open, and I think we've figured out. Terry's had between 3%-7% turnover for 25 years. Our turnover this year's down to 11%, the lowest it's been in my time here in 10 years, and most of that comes out of our retail network.
Mm-hmm.
But we're both focused on the same thing. And I think if we create an environment that takes the best, best of both companies, I don't think we have to worry about a big, turnover number.
Right. If I could jump in on that.
Yeah.
You know, you have these obvious assumptions that we've been in the business a long time. Say, "Okay, we got this merger here. All this vulnerability. Somebody's gonna lose people." But, you know, I would submit to you, the things that are in place that cause people to love our company are all here.
Yep.
The things that are causing disgruntlement among those other companies are still in place. So all the elements that cause this rapid hiring opportunity to work are still in place. And here's an example of it. We, since we announced this deal, Synovus has a small operation in Mobile, Alabama. We weren't there at all. We had an opportunity to lift out a team in Mobile that came to us after we came to Pinnacle after we announced this deal and ultimately ends up being the president of the combined market for the two of us down there. And so in the discussions with her, she's like, "Yeah, well, you know, I was ready to come, but help me think through this deal." And basically, the conclusion she came to is just what I said, "Hey, all the things I'm leaving are still there.
All the things I'm going to are still there. I just need to go ahead and make this move.
Mm-hmm.
And so I think it's a pretty illustrative case for why we're not gonna lose all these people.
Gotcha. I know the comments about the big bank. We're not getting it, my big bank.
No, no. Of course not.
So maybe let's just switch gears and talk about capital for a little bit. You know, you're expected to have close to 10% CET1 at closing. You know, you're expecting to grow it by the end, you know, to over 10%. And you I think you put out an initial target of 10.5%. I guess maybe just talk about your expectations to getting to that target over time. And given what sounds like, you know, really robust growth, you know, how, how to think about uses of capital, particularly, you know, share repurchases. And how do you think about toggling the idea that you've got really significant growth opportunities, but I'm assuming neither of you are thrilled with where the share price is today?
No. I'm sorry about that.
Yeah. We can agree on that, Terry.
Yeah.
Terry and I are locked arms there. Look, but we also agree that tangible book value growth is something that shareholders want.
Mm-hmm.
And so, we're depending on where rates end up, Ryan. I know we're down to the final stages here, but we could be at, you know, at the end of the first quarter, we could be at 10.2%-10.3% in CET1 levels. And what Jamie has said in the past is that we've put that 10.5% number out there just because when we're looking at it from a competitive landscape, we don't wanna be an outlier. And as largely most of our AOCI will be out of the numbers. So adjusted for that, it would put us in very good relative range with the other Cat 4 banks. But ultimately, this company is a capital generator. We'll after dividends still create about 35 basis points of CET1 every quarter.
And so as you suggested, Terry and I have talked about, the best use of that capital is to go out and give it to our clients to facilitate growth. Second best use, if we feel like we have excess capital, is we could go back and do some share repurchase just to get us in the right relative range. But for us, you know, I would much rather focus on growing faster. I would love for the Federal Reserve to come up with some new tailoring rules so we don't have to spend $70-$80 million on LFI. We'd go and spend that money on more resources to grow even faster, and we'd have the capital to do it. So we'll monitor capital levels. We think we have adequate capital day one. We'll watch what happens around us with all the regulatory changes.
But just know, even at 10.5%, if we were to run our own internal CCAR stress test, we feel like that's more than adequate, more than adequate, and we'd have flexibility to leverage that capital in other ways. But, you know, we're a growth bank. So what you'll see is the dividend's gonna come in a little lower than the historical Synovus dividend. And you won't see us relying heavily on share repurchase because we think.
Right.
The best way to generate value is to grow our tangible book value.
Ryan, if I could, this is an important idea. You mentioned share price. You're right. I don't like where the share price is. But I didn't do this deal believing that it was gonna run. My expectation was, now, it.
Mm-hmm.
Exceeded my expectation, but my expectation was that the stock would trade down at the announcement.
Yeah.
You can't do a deal like this unless you're convicted it's gonna work 'cause you know.
Mm-hmm.
You're gonna get all this turmoil at the announcement. So all I would say to you is I did a really similar transaction, which was the BNC transaction 2017. Stock traded down. What we did when we put our model on that footprint was compound loan growth at 10%, deposit growth at 14% over seven or eight years, and outperformed the KRX two times from the day we announced that deal and three times from the trough 'cause it did trade down there and then it came back. And so that has been my conviction about this transaction. That's my expectation for this transaction.
Maybe just switching gears a little bit to the near term. Obviously, both put out slide decks yesterday. Terry reiterated no change to the full-year guide. Kevin sort of some puts and takes. Maybe just a quick update on anything that you guys are seeing in the markets that you think is noteworthy to highlight.
Yeah. I mean, look, I'll start, and Terry can add in. I mean, look, I think we, you know, our update was a little positive from a revenue standpoint.
Yeah.
You know, I think the message you should take away from that, Ryan, is that this merger and all the work that's been going on by hundreds of people in our company have not slowed down the momentum that we've both been building on. Our clients are not feeling any impact. We're generating growth, both on loan and deposits, and it's translating into a good quarter for both companies. I think that's, you know, we've talked about it, Terry and I've talked about it. The number one opportunity for us is just continuing to execute and executing in third quarter, which both companies did, executing again in fourth quarter, and then giving you a little bit of insights, obviously, to the targets for next year, saying that that's gonna also launch us into 2026 with some powerful growth trajectory.
So not a lot of key themes there.
Yeah.
Other than just executing on the core principles that it's allowing us to deliver on our expectations.
Maybe one financial necessity. We got Jamie sitting in the audience. I'll make you put your old CFO hat back on, Kevin. You know, you put out a target NIM of 3.5%. You know, you laid out where you expect short-term rates. Maybe just talk about your degree of confidence in sustaining this over what time frame, and what are some of the key assumptions such as depository pricing or, you know, and upside and downside risks to this over time?
You know, it's like Jamie said earlier today, if you just take the Synovus margin, it's like a 380. You take the Pinnacle margin, it's a 340. You put it together, it's probably closer to 360, day one because of the mark to the balance sheet. But over time, some of that PAA will come in, and that's why we came up with kind of the normalized 350. I mean, look, if you ask me what the puts and takes are, it's, you know, we can't project the interest rate environment. We've largely, though, tried to manage the balance sheet where we're fairly neutral to the front end of the curve. We have a little bit of asset sensitivity in the belly of the curve. So there's some rate movements there that could drive the margin.
But we've said this, we don't wanna be an investment for you guys based on a bet on rates. We want to be an investment based on growth. So the margin itself would kinda materialize in that 350 range. And the question that we've gotten today, and I think the rightful question is, if you're having to generate deposit growth of 9%-11%, are you gonna see pressure on the betas as a result of having to lean into pricing? You know, we don't believe so. We think that, you know, what Terry and his team have been able to do over the last 25 years, you've seen a correlated level of loan and deposit growth because when you're hiring talent, you're just not hiring asset generators. You're hiring folks that are bringing over full relationships, which bring deposits with them.
Terry and his team have also built out a very strong deposit vertical, several deposit verticals that we'll be able to leverage in the Synovus franchise. So the biggest question or NIM to me is just that funding of the growth and where you're gonna have to price it in order to generate that. And look, we could grow deposits 10% every year if you wanna do 7% CDs. That's not our plan.
Yeah.
We wanna bring them in at kind of the normal levels.
Thank you for saying that. That's not our plan.
That's not our plan.
One thing that I did wanna ask about when we were talking about capital was BHG. I know there's been talk of, you know, the principals potentially pursuing a liquidity event. I guess if your investment is sold, how much capital would be available, and what would be the uses, and how would you think about replacing the earnings of that over time?
Still, you expect that, yeah.
Yeah.
I think the case is just to level set Pinnacle on a standalone basis, more or less headed toward an exit at a reasonable price, not because it wasn't a good investment, but because we just never could carry the day. We couldn't get the valuation out of it among bank investors and so forth. So the update, I guess, is the two principals own 51% of that company. We own 49% of that company. My belief is those two principals are more interested today in a liquidity event than at any time that I remember. And so I would say that increases the likelihood of a liquidity event. The case is for Pinnacle. We don't have to travel with them. We have tag-along rights if we want so we can liquidate our position, as they liquidate theirs, but we don't have to do that.
And, so I think what Kevin and I have agreed is, you know, BHG was a much larger portion of our income stream than it is of the combined company. And so I think we generally like the company. We like the asset. We like the earnings stream. We're gonna see a few more cards before we decide exactly what we're gonna do. But, Kevin, you ought to.
Yeah. No, Ryan, as you may know, we're a participant in their syndicate, so we know BHG from a Synovus side to Terry's point, if they remain, if we keep our 4.49% interest, we'd be fine with that. We think it's a great company. If they were to monetize, our goal would be to take the capital, generate it by that, and try to replace that earnings stream. For the combined company, it's roughly 6% of revenues. Whether that's through share repurchase, purchase portfolios, the other thing that we would try to do is partner with whoever were to purchase BHG, as we have certain relationships today, like with Sixth Street and GreenSky, where we're able to help facilitate that banking transaction. So at the end of the day, eyes wide open. We know what we're getting into.
We like the business. If something were to happen, we would use that capital to help replace that revenue stream. So I heard the applause from next door. That means we're coming up against time. But I guess in conclusion, obviously, we covered a lot of ground here. You guys put out a ton of information. I guess any sort of concluding remarks in terms of just positioning into next year, things that you think the market is still underappreciating, whether it's about the integration, the growth profile that you guys wanna highlight as we, as we close out the year here?
I mean, we both, as we're running out of time, look, we have been very focused on this integration. We've got a lot of work done. We got an approval in 124 days.
Mm-hmm.
With the Fed, I think it speaks to our relationship with our regulators, and we're in a position on day one to launch this company and to do what I said before, build a bank with scale with a soul, and I think it puts us in a competitive position that ultimately will win clients on a daily basis, and then just go back to the merger math. If you look at what we're gonna deliver in 2027, we're gonna be the fastest-growing regional bank with the highest profit, the most efficiency, and ultimately with the best client scores. If you don't wanna own that bank, then you probably don't wanna own regional banks.
Great. Well, please join me in thanking Terry and Kevin.