My very first call was in April of 2010, 11 years ago to the day as chief operating officer.
We were weeks away from completing the consolidation of 30 bank charters into one, and still very much in the early stages of recovering from the financial crisis.
And third is delivering core organic growth, which remains our top priority for capital deployment with expectations for core customer loan growth this year consistent with our guidance of 2% to 4%, excluding P3 loans.
Adjusted diluted earnings per share were $1.21 compared to $1.08 last quarter and $0.21 a year ago.
Total adjusted revenue of $488 million, adjusted expenses of $267 million, and a $19 million reversal of provision for credit losses led to strong earnings that further increased capital levels.
Core transaction deposits grew $2 billion, helping reduce the total cost of deposits by six basis points to 0.22%.
Commercial loans, excluding those under the Paycheck Protection Program, increased $212 million or 1% from the end of the year.
Through mid-April, we processed 10,000 new Phase 2 applications for $1.1 billion and have funded approximately $950 million for our customers.
Net charge-offs remained low at 21 basis points.
By the end of the quarter, we've achieved a pre-tax run rate benefit of approximately $50 million of the $175 million expected by the end of 2022.
Total loans increased $552 million in the first quarter, highlighted by $894 million in fundings from the second phase of P3 as well as the $476 million in direct auto portfolio purchase in March.
With back-end loaded growth, period-end loan balances were $593 million higher-than-average balances.
Loan growth of approximately $212 million in commercial loans, excluding P3, was led by our specialty verticals while we saw declines in balances associated with our smaller commercial customers.
Total C&I loans, excluding P3 balances, increased to $4 million in the first quarter.
Despite total commitment growth of $93 million, line utilization declined $43 million and the ratio remained stable at 40%.
With the recent $2.9 trillion stimulus plan, we expect C&I line utilization to remain at or near these historically low levels for longer as customers prioritize use of their own excess liquidity before making meaningful draws.
And returning to a more normalized average of 46% would add approximately $650 million in funded balances.
Total CRE loans increased $208 million as the recovery of commercial real estate markets continues.
Total consumer loans, excluding lending partnerships, declined $333 million.
This trend was particularly apparent within our consumer mortgage and HELOC portfolios, which declined $214 million and $105 million, respectively.
We have processed $1.1 billion of P3 loans and funded approximately $950 million to date as part of the second phase of the program.
We also continue to work through the forgiveness process on Phase 1 loans.
In the first quarter, we had $711 million of loans complete the forgiveness process.
Total P3 loans ended the quarter at $2.4 billion.
Total lending partnership loans held for investment increased $503 million, led by the purchase of prime auto loans.
As shown on Slide 5, we had total deposit growth of $677 million.
The main drivers of the change include the deposits associated with Phase 2 of P3, declines in public funds and continued remixing of our deposit base.
Deposit growth was led by an increase in core noninterest-bearing deposits of $1.4 billion, allowing the continued strategic runoff of higher cost deposits.
The more favorable mix supports further declines in the total cost of deposits, which declined another six basis points in the quarter to 0.22%.
At the end of the quarter, total noninterest-bearing deposits accounted for 31% of total deposits, which improves our cost of deposits and NII sensitivity.
In the first quarter, we were able to reduce the cost of time deposits by 24 basis points to 0.89%.
The reduction then included a 19% decline in brokered CDs, which included $309 million at an average rate of approximately 1.85%.
Slide 6 shows net interest income of $374 million or $349 million, excluding P3 fee accretion.
Those figures represent a $12 million decrease from the fourth quarter, largely due to lower day count and a continuation of some low pressure.
In addition to the increase in lending partnerships of about $503 million I referenced earlier, we increased the size of the securities book by $1 billion.
In the first quarter, we realized $25 million in P3 fees.
At quarter end, the net unrealized fees were $25 million for Phase 1 and $36 million for Phase 2.
We expect most of the remaining Phase 1 fee accretion will occur in the second quarter and Phase 2 fee accretion will pick up in the second half of the year.
As such, a reminder, most Phase 1 loans have a two-year term.
It's a five-year term for Phase 2 loans.
Securities accounted for approximately 16% of total assets at the end of the quarter, and we continue to expect further growth within that portfolio for the foreseeable future to deploy excess liquidity.
The net interest margin was 3.04%, down eight basis points from the previous quarter.
Slide 7 shows noninterest revenue of $111 million.
After adjusting for security losses, adjusted noninterest revenue was $113 million, up $1 million from the prior quarter and $14 million from the prior year.
Core banking revenues increased $1 million as a $2 million increase in account analysis fees following the first wave of some of our pricing for this value initiative, offset declines in NSF fees of $1 million.
Increased customer derivative activity and interest rate movement contributed to a capital markets improvement of $3 million.
We saw continued growth in assets under management, which were up 2% quarter-over-quarter and 35% year-over-year.
Net mortgage revenue of $22 million remains strong, although we're seeing some normalization in activity from the extended low rate environment.
Total and adjusted noninterest expenses were $267 million.
Adjusted NIE was down $9 million from the prior quarter and $5 million from the prior year.
The employment expense increase of $8 million from the prior quarter include seasonal first-quarter increases in employment taxes and other related employment expenses that were partially offset by this benefit of Synovus Forward initiatives, including a full quarter benefit of the voluntary early retirement program last quarter.
Professional fees declined $8 million from the prior quarter, primarily from lower expenses associated with Synovus Forward-, P3- and CARES Act-related initiatives.
Net charge-offs declined $2 million to $20 million or 21 basis points.
The $19 million reversal of provision for these credit losses resulted from the improved economic outlook and stable loan portfolio metrics that were partially offset by an increased size of the loan portfolio.
Approximately 60% of the $263 million increase is hospitality-related, including hotels and full-service restaurants.
This more positive outlook is reflected in ending ACL ratio of about 1.69%, excluding P3 loans.
As noted on Slide 10, the CET1 ratio increased eight basis points to 9.74% from strong core earnings despite a risk-weighted asset increase of $1.2 billion.
The RWA increase is now primarily from balance sheet management efforts I referenced earlier as well as a $234 million increase in loans held for sale.
The CET1 ratio grew more than 100 basis points over the past year, and we remain above the top end of our 9% to 9.5% operating range for CET1.
We also believe it's important to return a portion of current earnings through dividends, targeting a long-term payout ratio of 30% to 40%.
Our current interest-bearing funds with the Federal Reserve of $2.7 billion are about three and a half times higher than normalized levels, and we've actively managed our balance sheet the past few quarters to monetize that excess liquidity.
One way we were able to accomplish this was in our lending partnership portfolio, which a year ago had approximately $2 billion and held for investment loans.
With our actions and restructuring the GreenSky relationship and active management of these other lending partnership portfolios, our total lending partnership exposure at quarter end was $1.9 billion with approximately $1.2 billion and held for investment loans and approximately $700 million and that are held for sale loans.
The yield on first-quarter purchases was about 1.4%.
The last graph is just a historical view of the loan-to-deposit ratio, which currently stands at 82%.
We certainly don't have time today to discuss all of these accomplishments and transformation over the last 11 years, spanning the four phases of stabilize, rebuild, invest and accelerate.
As we evaluate our performance over the prior 12 months, these initiatives and efforts have been essential in helping to weather and overcome the challenges of the economic downturn while continuing to strengthen the bank for the future.
The first-quarter results continue to show good momentum in these areas with increases in wealth management revenues, up $2 million or 5% from the fourth quarter, as well as our AUM continuing to grow, as we referenced earlier.
Treasury and payment solutions, overall production and onboarding efforts continue to hit record levels, combined with the repricing efforts, produced a $2 million or 23% increase in service charges versus the fourth quarter despite increases in customer liquidity.
As a reminder, we expect to achieve the pre-tax run rate benefit of around $175 million by the end of 2022.
These initiatives will result in approximately half of the $175 million anticipated pre-tax benefit.
At the end of the first quarter, we have now achieved a pre-tax run rate benefit of approximately $50 million with about $40 million in cost reductions and $10 million in incremental revenues.
We are in the process of realizing the additional Phase 1 efficiency initiatives, and announced in January that we expect to generate an additional $25 million in Phase 2.
We have also initiated our Phase 2 program in over the next two quarters, we will begin to make decisions that will lead to the incremental savings with the goal to have all of the efficiency programs executed by the fourth quarter of 2022.
We remain confident in our ability to generate a pre-tax run rate benefit of over $20 million by the end of the year.
Results, to date, have exceeded our expectations with fees increasing $2 million quarter-over-quarter and we expect to maintain and even increase profitability in these products as we continue to increase our value proposition and treasury and payment solutions, including the new Synovus Gateway platform, priority service and enhanced solutions.

Summary:
Adjusted diluted earnings per share were $1.21 compared to $1.08 last quarter and $0.21 a year ago.